Ultimately, stabilizing atmospheric concentrations of greenhouse gases within acceptable levels and managing the residual climate impacts is expected to require adequate, predictable and sustainable financial flows to developing countries, as well as policies and actions in all developed and middle-income economies. The fragile recovery from the most recent financial crisis poses a double challenge of supporting robust economic recovery in the mid-term, and ensuring long-term sustainability of economic growth and prosperity along lower emission and climate resilient pathways.
The Bank Group expanded support to climate-resilient and low-carbon investments by blending and leveraging a suite of financing instruments, mobilizing and facilitating access to new additional resources, packaging “core” financial products with specialized climate resources, pioneering and broadening the reach of carbon markets, and complementing finance with technical assistance and policy advice. Other actions included:
- Access to additional climate financing, including for accelerated deployment of new technologies
- Strengthened knowledge and capacity base
- Facilitating global action and interactions among all countries
The financial crisis prompted a massive increase in World Bank Group financial support, particularly IBRD lending ($32.9 billion for 126 new operations in 42 countries in 2009 alone)—and underscored the Bank Group’s potential to mobilize and leverage resources for climate action, increase efficiency, and apply its instruments innovatively towards achieving multiple strategic objectives.
- Over 74 percent of all Fiscal Year 2009 IBRD Country Assistance or Partnership Strategies substantively address climate-related issues
- Low-carbon growth country studies have been undertaken in partnership with seven IBRD countries –Brazil, China, India, Indonesia, Mexico, Poland and South Africa –in close collaboration with the respective governments, agencies and local stakeholders
- The Latin America and Caribbean Region alone has developed an IBRD portfolio of approximately 180 activities with adaptation and mitigation co-benefits totaling over $7 billion.
- FY09 marked an all-time record in IBRD new renewable energy (RE) and energy efficiency (EE) financing of $1.3 billion, more than doubling FY08 investment.
- By the end of FY09, 10 World Bank-managed carbon funds had purchased emission reductions in IBRD clients from 208 projects with an estimated carbon asset value of $2.5 billion. IBRD countries account for 83 percent or $2.09 billion of this portfolio.
- Launched in record time, in FY09 the Climate Investment Funds (CIF) have mobilized over $6 billion for climate investment in developing countries.
- The Clean Technology Fund (CTF) has already endorsed nine investment plans in IBRD countries with an overall envelope of $3.25 billion to leverage over $30.6 billion of investments with mitigation benefits, including $4.3 billion co-financing from IBRD funds.
- The Bank Group is actively engaged, in partnerships with the Global Environmental Facility (GEF), and the private sector, in promoting and facilitating access to and expanding the use of emerging technologies, (for example, concentrated solar power and “smart grids”, photovoltaic, and energy efficiency in China, India, Mexico, Morocco, and Russia, among others).
Toward the Future
The strong client country uptake of climate change issues, as reflected in new IBRD Country Partnership Strategies, has considerably increased the demand for policy, knowledge, and financing support in the areas of both low carbon growth and strengthening climate resilience. There is also be a growing demand from IBRD countries for identifying and facilitating access to technology and knowledge for lower emission growth and adaptation to climate change, assistance with identifying and sharing risks associated with the commercialization of new low emission technologies and with improving their capacity to cope with extreme weather conditions.