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Climate Change

Climate change is a primary concern of the World Bank and its clients. Developing countries are expected to be disproportionately impacted by changes in sea level, warming temperatures, stresses on forest and agricultural systems, and increased climate variability.

The Bank's role is to help our client countries identify and implement "win-win" actions that bring both developmental and climate change benefits. Bank support to clients focuses on three key areas:

  • mitigation of greenhouse gas (GHG) emissions
  • reducing vulnerability and adapting to climate change
  • capacity building

In these three areas, the Bank seeks to mainstream climate change concerns within its development dialogue with its clients. In doing so, the World Bank utilizes three main instruments:

  • IBRD/IDA lending
  • Global Environment Facility (GEF) and donor grant support
  • carbon financing

In the area of GHG mitigation, the Bank promotes policy and regulatory reforms, as these tend to have large and sustainable impacts on improving the efficiency of resource use and consequent reductions in GHG emissions.

Simultaneously, the Bank helps its client countries to adopt renewable-energy and energy-efficient technologies within the broader context of their energy-development strategies. As a result, the Bank's energy-sector lending is blended with GEF grant resources, with the latter covering the incremental costs of adopting these technologies such as those associated with barrier removal, capacity building and institutional strengthening.

For the large-scale replication and market expansion of these low-carbon emission technologies, the Bank sees carbon financing as a major instrument. The Prototype Carbon Fund, established by the Bank, is providing valuable transactional experience through first-of-a-kind projects to facilitate the growth of carbon financing.

In the area of vulnerability and adaptation, the Bank has worked with a few of its most-vulnerable clients to assess adaptation options in the context of their development plans. Current work focuses on incorporation of climate-change impact concerns in sectors such as water, agriculture, forestry, and coastal-zone management.

Over the medium term, the Bank will focus on improving the understanding of the developments risks associated with climate change impacts, assessing risk-mitigation measures, and identifying and implementing adaptation responses to reduce vulnerability to current climate and climate change.

Finally, the Bank assists clients in building the capacity needed to deal with GHG abatement and with vulnerability and adaptation. The National Strategy Studies (NSS), supported by a number of donor countries, help client countries in developing human and institutional capacity to utilize carbon-finance opportunities.

Global Climate Change