Climate Change

Climate change is a fundamental threat to development in our lifetime. If we do not confront climate change, we will not end poverty. The sooner we act, the better chance we have of addressing it at a lower cost.

The World Bank Group is concerned that without bold action now, the warming planet threatens to put prosperity out of reach of millions of people and roll back decades of development progress.

This is the year to lay the groundwork for a new global climate agreement expected at the international climate talks in Paris in December 2015. The good news is that climate action does not require economic sacrifice.  Smart policy choices can deliver economic, health and climate benefits. 

At the UN Climate Summit in September, more than 73 countries and 1,000 companies and investors signaled their support for action through pricing carbon as a necessary part of the solution to drive investments in a cleaner economy and a foundation on which other climate actions can build.

The science is unequivocal that humans are causing global warming, and changes are already being observed. Since the turn of the century, each year (2000–2013) has ranked among the 15 warmest since record keeping began over 130 years ago. 

The intensity of extreme weather-related events has also increased.  No country—rich or poor—is immune from the impacts of climate-related disasters.

The Turn Down the Heat reports, prepared for the Word Bank by the Potsdam Institute for Climate Impact Research, provide snapshots of the latest climate science and say we are on a path to a 4°C (7.2°F) warmer world by the end of this century. The reports provide a picture of the devastating effects on agriculture, water resources, ecosystems, and human health if countries do not take action. While every region will be affected, those least able to adapt—the poor and most vulnerable—would be hit hardest. If the world warms by just 2°C (3.6°F)—warming which may be reached in 20 to 30 years—we could see widespread food shortages, unprecedented heat-waves, and more intense storms.

The World Bank Group believes a 4°C warmer world can and must be avoided. Immediate global action is needed to slow the growth in greenhouse gas emissions this decade and to help countries prepare for a 2°C warmer world and adapt to changes that are already locked in.

At the Bank Group, we are stepping up our mitigation, adaptation, and disaster risk management work, and will increasingly look at all our business through a climate lens.

Last Updated: Sep 30, 2014

Catalyzing Climate Action

The World Bank Group Climate Change Group, established in January 2014, has four core objectives:

• Embed climate risk and opportunity and resilience into country strategies and internal processes.
• Be a key player in international climate finance architecture to leverage and mobilize finance for low-carbon growth and resilient investments. 
• Establish the World Bank Group as a solution provider with the best tools, analytics, and evidence of climate impact on all clients, particularly the most vulnerable.
• Continue to advocate for, drive, and support global action to avoid exceeding a 2°C warmer world and eventually achieve carbon neutrality in the global economy to enable achievement of the World Bank Group’s twin goals of ending extreme poverty and increasing shared prosperity.

In FY2014, the World Bank Group’s total climate investments increased to $11.3 billion, with the World Bank (IBRD/IDA) committing $8.8 billion and the World Bank Group’s private sector arm, the International Finance Corporation (IFC), committing $2.5 billion. The World Bank Group had 221 climate investment projects in over 60 countries during the fiscal year.

The World Bank Group has demonstrated innovative ways to mobilize additional resources to finance climate action by working with partners. That includes the $8 billion Climate Investment Funds, which are designed to provide scaled-up financing through the multilateral development banks to initiate transformational change toward climate-resilient, low-carbon development.

The Bank is trustee of 15 carbon finance funds that have supported more than 145 projects in 70 client countries. Since 2000, these initiatives have reduced the equivalent of 187 million tons of carbon dioxide emissions through the projects they support.

IFC works to support renewable power, energy efficiency, and other climate-smart solutions for developing countries. IFC has committed more than $13 billion in climate-related projects since 2005, including $1 billion in renewable energy generation in FY14. 

The World Bank Treasury and IFC are also among the world's largest issuers of green bonds, which support climate-related projects such as increasing energy efficiency and developing of renewable energy — with over $7 billion issued by the World Bank Treasury in 17 currencies. IFC has issued $3.7 billion in green bonds, including two benchmark $1 billion issues in 2013.  

Through the Global Facility for Disaster Reduction and Recovery (GFDRR), the World Bank helps developing countries reduce their vulnerability to natural hazards and adapt to climate change by mainstreaming disaster risk reduction and climate change adaptation in country development strategies.

The 2013 report Building Resilience: Integrating Climate and Disaster Risk into Development noted that weather-related losses and damage have risen from an annual average of about $50 billion in the 1980s to close to $200 billion over the last decade, and emphasized the need to better integrate climate adaption with disaster-risk management programs.

Earlier this year, a new World Bank Group study found that government policies that improve energy efficiency and public transport could increase global economic output by more than $1.8 trillion per year, and also save lives, reduce crop losses and tackle climate change. The Adding up the Benefits report shows the potential economic, health and other gains from scaling up climate-smart policies as well as projects already in place in developing countries like Brazil, India, and Mexico. The report strengthens the case for urgent action on climate change.

The Green Growth Knowledge Portal, the Climate-Smart Planning Platform, and the Program for Market Readiness, provide countries with cutting-edge information, analysis, and tools on climate change.

As mandated by the International Development Association (IDA), the Bank’s Fund for the poorest, IDA Country  Partnership Frameworks are incorporating climate and disaster risk considerations, and new IDA operations are now screened for short- and long-term climate change and disaster risks, and resilience measures are integrated as appropriate.

Last Updated: Sep 30, 2014

Results

The government of Nepal with the assistance of the World Bank Group, has built more than 1,000 micro hydropower plants since 2007 that deliver clean, renewable power to communities in 52 districts across the country. The new source of electricity is bringing new jobs and economic growth to rural and impoverished parts of Nepal.

Another rural electrification project in Bangladesh has been installing more than 50,000 home-based solar power systems every month since 2003. The fastest-growing solar home systems program in the world, this Bank-funded initiative expects to connect 2.5 million people by 2018.

And in Chile, the IFC invested more than $450 million in privately sponsored hydro, wind, and solar projects. Together they offset 1.7 million tons of CO2 emissions — roughly equivalent to taking 200,000 cars off the road. The projects include the largest solar photovoltaic power plant in Latin America: the SunEdison-owned Amanecer solar project in Chile’s Atacama Desert.

In Kenya, 60,000 smallholder farmers are now getting carbon credits for improved agricultural land management practices such as land rehabilitation, mulching, and less tilling which trap carbon dioxide in soil. They sell the carbon credits to the BioCarbon fund, earning a total of $65,000 so far. The project, the first of its kind, has already increased crop yields by up to 20 percent.

Another carbon credit project focused on reforestation in Rio de Janeiro, Brazil, is helping to revitalize neighborhoods and improve public health, while capturing hundreds of tons of carbon dioxide emissions and generating credits for the city. The Rio Low-Carbon City Program, launched by the Bank and the city at Rio+20 in 2012, will measure the climate impact and the carbon credits generated by the initiative. 

The World Bank Group is also stepping up efforts to integrate disaster risk management work with longer-term efforts to make vulnerable nations more resilient to climate and disaster risks.

In the Caribbean, The Caribbean Catastrophic Risk Insurance Facility has since 2008 made payouts of $32 million across claims from eight countries following natural disasters, with all payouts being made within three weeks of the event.

Similarly, for the Pacific Islands, the Pacific Catastrophe Risk Facility was set up in 2013 to provide disaster risk assessment tools and practical technical and financial applications to reduce and mitigate countries’ vulnerability to natural disasters. In FY13, the Bank executed the first-ever capital markets insurance transaction covering tsunamis to help five Pacific Island countries (Marshall Islands, Samoa, Solomon Islands, Tonga, and Vanuatu) to insure themselves against natural disasters.

Last Updated: Mar 24, 2014