World Bank Group Increases Support for Climate Action in Developing Countries
Source: The World BankDate: 22 June 2021
New Climate Change Action Plan will increase high-impact support to deliver climate results, targeted towards reducing the trajectory of emissions and strengthening adaptation and resilience in developing countries.
The World Bank Group today announced its new Climate Change Action Plan that aims to deliver record levels of climate finance to developing countries, reduce emissions, strengthen adaptation, and align financial flows with the goals of the Paris Agreement. The Action Plan for 2021-25 broadens World Bank Group efforts from investing in "green" projects to helping countries fully integrate their climate and development goals. The Plan also comes as countries seek sustainable pathways out of the disruption caused by the COVID-19 pandemic.
"Our new Action Plan will identify and prioritize action on the most impactful mitigation and adaptation opportunities, and we will drive our climate finance accordingly. This means helping the largest emitters flatten the emissions curve and helping countries achieve successful adaptation and resilience to climate change," said World Bank Group President David Malpass. "We will be delivering climate finance at record levels and seeking solutions that achieve the most impact."
Key highlights of the Action Plan include:
- Providing major increases in climate finance. The World Bank is already the largest multilateral provider of climate finance for developing countries. The Plan includes a commitment to increase delivery to an average of 35% of total World Bank Group financing for climate over the duration of the Plan. At least 50% percent of International Development Association (IDA) and International Bank for Reconstruction and Developing (IBRD) climate finance will support adaptation.
- Identifying and prioritizing opportunities for high-impact climate action to inform future World Bank Group climate engagements and investments. A new core diagnostic tool, the Country Climate and Development Report (CCDR), will help countries align climate action and development efforts and absorb new climate-related technologies as they emerge.
- Boosting support to countries for implementing and updating their Nationally Determined Contributions and Long-Term Strategies pursuant to the Paris Agreement; and adjusting incentives by reducing subsidies for and increasing taxation of greenhouse gas emissions.
- Catalyzing and mobilizing private capital for climate action; stepped up efforts to develop carbon credit markets, green bonds and loan markets in countries; and support for global public goods in the poorest countries through IDA funds as well as other sources.
- Prioritizing action in key systems—energy; agriculture, food, water, and land; cities; transport; and manufacturing—that must be transformed to address climate change, achieve a resilient and low-carbon future, and support the protection of natural capital and biodiversity. The Action Plan will place a strong emphasis on supporting a "just transition" out of coal.
- Aligning all World Bank Group financing flows with the objectives of the Paris Agreement to support countries' climate commitments. The World Bank – comprising of the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA) – will align all new operations starting July 1, 2023. For the World Bank Group's private sector development arms, IFC and MIGA, 85 percent of Board approved real sector operations will be aligned starting July 1, 2023, and 100 percent of these operations starting July 1, 2025, two fiscal years later.
The World Bank Group will regularly update its Board on the implementation of the Action Plan.
The new Action Plan builds on the World Bank Group's achievements under its first Climate Change Action Plan, which delivered over $83 billion in climate finance over five years, including a record $21.4 billion in 2020.