AT A GLANCE: - Addressing climate change is central to the development and poverty reduction agenda.
- The poorest countries stand to suffer the earliest and the most from the effects of climate change.
- An effective response to climate change must combine both mitigation—to avoid the unmanageable—and adaptation—to manage the unavoidable.
- Climate change should not be allowed to halt or slow the progress of developing countries: there is a double challenge of reducing global damaging carbon emissions while meeting the energy needs of the world’s poor.
- The World Bank Group is working to help poor countries access additional concessional funding to enable them to cope with climate change and still achieve economic growth, poverty reduction, and ultimately the MDGs.
The Poor Are Disproportionately Affected Developing countries are more vulnerable to climate change than rich countries, with poor people most at risk from the increased impacts of extreme weather events (i.e., floods, droughts and storms). Human-induced climate change is expected to increase climate variability and to negatively impact agricultural productivity throughout the tropics and sub-tropics, further decrease water quantity and quality in most arid and semi-arid regions, increase the incidence of malaria, dengue and other vector borne diseases in the tropics and sub-tropics, and harm ecological systems and their biodiversity. In addition, sea level rises associated with expected increases in temperature could displace tens of millions of people in low-lying areas, such as the Ganges and the Nile deltas, and could threaten the very existence of small island states. The Strategic Framework on Climate Change and Development At the G8 Gleneagles Summit in Scotland in 2005, the World Bank was mandated to develop a roadmap for accelerating investments in clean energy for the developing world, in cooperation with other international financial institutions. This roadmap, termed the Clean Energy Investment Framework (CEIF), identified the scale of investments needed for countries to (i) increase access to energy, especially in Sub-Saharan Africa; (ii) accelerate the transition to a low carbon economy; and (iii) adapt to climate variability and change. At the 2007 Annual Meetings, the Development Committee welcomed the progress made in implementing the CEIF and called on management to develop a comprehensive strategic framework for Bank Group engagement on climate change. The Strategic Framework on Climate Change and Development (SFCCD) will articulate the Bank Group’s vision on how to integrate climate change and development challenges, without compromising growth and poverty reduction efforts. This will be done through the World Bank Group’s country operations including policy dialogue, lending, and analytical work in client countries, and through its regional and global operations. The SFCCD will broaden the scope of the CEIF by encompassing all relevant sectors, including energy, transport, urban, water, agriculture, forestry, environment, economic policy, and social protection, and by further elevating adaptation as the central attribute of development confronted by changing climate. The SFCCD will benefit from close coordination with the World Development Report 2010 on Climate Change and several other major analytical products. The SFCCD is an action framework based upon six strategic pillars: scaling-up operational approaches to integrate adaptation and mitigation in development strategies;
consolidating efforts to mobilize and deliver finance;
expanding the WBG’s role in developing new markets;
tapping private sector resources for climate friendly development;
clarifying the WBG’s role in accelerating technology development and deployment; and
stepping-up policy research, advocacy, knowledge management and capacity building.
The development of the SFCCD is underway and will include extensive consultations with a full range of stakeholders, including developing country clients, development partners (UN agencies, RDBs, bilateral donors), the private sector, and civil society through August 2008. The full SFCCD will be proposed for endorsement by the World Bank’s Executive Board in September 2008 and subsequently discussed at the 2008 Annual Meetings. The consultations process for the SFCCD will include an assessment of the WBG’s comparative advantage in the context of the roles and responsibilities of multiple international players, and will support the UNFCCC process and developing countries’ knowledge and capacity to participate in the negotiations while being neutral to any negotiating party position. Energy Needs and Climate Change. The World Bank estimates that, to achieve development goals, the power sector in developing countries needs US$165 billion (in 2005 $) in investments each year. Only about half of that financing is readily available. Tens of billions of US$ per year are also required to cover the incremental costs of transitioning to a low carbon economy. In March 2007, the Bank set goals to:
increase access to electricity in Sub-Saharan Africa from about 25 percent to 35 percent by 2015 and 47 percent by 2030;
reduce greenhouse gas emissions from the current business-as-usual path through increased lending for clean energy projects; and
pilot adaptation instruments in order to mainstream climate change adaptation into the development process.
A September 2007 progress report on the implementation of the CEIF demonstrated important achievements with respect to these goals. WBG support for energy in Africa rose to US$1.1 billion in FY07 from approximately US$0.6 billion in each of the preceding two fiscal years. Moreover, the share of low carbon projects in the WBG’s total energy portfolio reached 40 percent from 28 percent in the pre-Gleneagles period of FY03-05. Low carbon country case studies, designed to pave the way for a transition to a low carbon economy, were launched for India, Mexico, Brazil, China, South Africa, and Indonesia. Global Gas Flaring Reduction (GGFR) Through the Global Gas Flaring Reduction (GGFR) partnership, the World Bank Group is helping oil producing countries and companies to increase the utilization of natural gas, which would otherwise be flared or released to the atmosphere and thus harm the environment. The GGFR partnership estimates that about 150 billion cubic meters of gas is flared every year (equivalent to about 30 percent of the European Union’s annual consumption of gas and 25 percent of US consumption), releasing about 400 million tonnes of CO2. The World Bank Group has eight projects under active preparation in five countries to address this problem. Carbon Finance at the World Bank The World Bank was a pioneer in the carbon market. The Bank’s operational engagement in carbon finance started with the establishment of the US$180 million Prototype Carbon Fund (PCF) in 1999. This was rapidly followed by the establishment of other funds and facilities as the Kyoto Protocol was ratified. Today, the World Bank manages just over US$2 billion across 10 carbon funds and facilities. Sixteen governments and 66 private companies from various sectors have made financial contributions to these funds. In December 2007, the World Bank launched two additional facilities, the Forest Carbon Partnership Facility (FCPF) and the Carbon Partnership Facility (CPF). The FCPF aims at reducing deforestation and forest degradation by compensating developing countries for carbon dioxide reductions realized by maintaining their forests. The CPF is designed to: (i) scale up carbon finance through programmatic and sector-based approaches; and (ii) support long-term, low-carbon investments by purchasing emission reductions beyond 2012.
Assessing the World Bank Group’s Portfolio The World Bank Group is working on an assessment of the greenhouse gas (GHG) impacts of its projects and programs. The analysis will provide information about the emissions impacts of World Bank Group lending operations in our client countries, with the goal of identifying opportunities to reduce the GHG footprint of development activities in the context of continued support for economic growth and poverty alleviation. In-House Efforts In 2006, as part of its commitment to environmental and social responsibility, and to contribute to efforts aimed at addressing climate change, the World Bank Group became the first multilateral development bank to become carbon neutral. The World Bank Group’s Washington D.C. facilities, business travel, and conference facilities as well as travel, and hotels for delegates associated with the Spring and Annual Meetings, are carbon neutral through a strategy of energy efficiency and reduction measures, carbon offsetting, and green power purchases. In addition, the Bank Group has committed to an annual carbon emissions reduction target of 7 percent for our US-based building operations.
### For more information on the World Bank and Climate Change, please see the website:
www.worldbank.org/climatechange, www.carbonfinance.org Updated March 2008 Contacts:
Roger Morier: (202) 473-5675, Email:Rmorier@worldbank.org
Jeff Brez: (202) 458-7628, Email: jbrez@worldbank.org | 
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