Current trends in climate change will bring greater weather extremes - storms, floods, droughts, heat waves, and cold waves – with detrimental effects on human health, agriculture, and ecosystems.

Energy-related activities account for the majority of human-generated green-house gas emissions, the primary cause of climate change. Between now and 2050, the demand for energy is projected to increase significantly, with the greatest increases occurring in developing countries. Unless policies change for the better and appropriate instruments are in place to facilitate investments in clean energy technologies, developing countries will otherwise follow a carbon-intensive development path, similar to that of their developed country counterparts.

The World Bank has worked on climate change since 1991, initially through helping to establish the Global Environment Facility(GEF) and increasingly as an integrated element of policy dialogue and lending. More recently the Bank has contributed to the development of carbon markets through its Carbon Financeoperations. Following the G8 Gleneagles Communiqué on Climate Change, Clean Energy and Sustainable Developmentthe World Bank developed an Investment Framework for Clean Energy and Development.

The World Bank Group is focusing its climate change efforts in both adaptation and mitigation, including forestry and agriculture (See the Climate Change websitefor more information on other areas of work). In the energy sector, climate change mitigation actions are ongoing in three key areas:

• Helping developing countries move to a lower carbon path by exploiting renewable energy resources, supporting energy conservation, and increasing efficiency. The World Bank’s energy commitments for fiscal years 2006-2008 are expected to exceed US$10 billion over the three year period, an increase of about 40 percent as compared to the previous three-year period. The World Bank committed US$668 million in fiscal year 2006 to new renewable energy and energy efficiency projects. This is an increase of 45 percent when compared to 2005 commitments.
• Promoting new technologies, like carbon capture and storage (CCS), address the need to reduce the carbon impact of fossil fuels. They are essential in countries like India and China that still depend heavily on coal. As part of its broader work on bio-energy, the World Bank is looking at the feasibility and economic viability of bio-fuel programs in developing countries.
• Financing for clean energy and mitigation: The World Bank Group created new carbon facilities, including the Carbon Partnership Facilityand the Forest Carbon Partnership Facility. The Global Environment Facilityalso addresses clean energy and climate change. The World Bank Group is also cooperating with donors in the design of new innovative financing. One recent example is a new £800 million (US$1.6 billion) Environmental Transformation Fund (ETF) announced by the United Kingdom (UK). The UK has asked the World Bank to help design and administer this international financing facility to advance its key objectives of co-financing new activities with strong development and environmental benefits and supporting developing countries’ transformation to low-carbon, climate-resilient growth paths.