A Year (Like No Other) in Review: A Snapshot of the World Bank Group’s Climate Work in 2020
2020 dramatically raised the stakes for climate action. Climate impacts did not stop and the impacts on human wellbeing were increasingly visible. Despite a brief dip in emissions because of the COVID-19 pandemic, the impact of this drop will be negligible on limiting dangerous climate change unless countries prioritize green recoveries. A greener, safer, and more inclusive recovery can not only help countries meet short term needs – jobs, economic growth – but also help them with other vital objectives, including decarbonization and resilience. Even with COVID-19 lending, the World Bank Group surpassed its climate finance target for FY20, allocating nearly $21.4 billion to climate-related investments. Here is a snapshot of 10 efforts the Bank Group advanced in climate action in this unprecedented year.
The Bank Group announced an ambitious target for 35% of its financing to have climate co-benefits, on average, over the next five years. It replaces an earlier target of reaching 28% by 2020, which was in place over the last 5 years. The World Bank – IBRD and IDA – will also seek to ensure that 50% of this financing supports adaptation and resilience.
2020 marked the end of the Bank Group’s First 5-year Climate Change Action Plan. In total, over the duration of the Action Plan, the Bank Group has delivered over $83 billion in climate finance. Early lessons were also drawn from the experience of the past 5 years that are fundamental to our ongoing efforts to help clients address climate change while also helping countries recover sustainably from the pandemic. Key among this is that climate change considerations are integrated across the majority of Bank Group transactions, technical assistance and, importantly, investments, including in sectors, such as health and governance, that until recently had not prioritized climate actions.
The choices that governments make to restart their economic engine, including the long-term social, economic, and environmental co-benefits they seek to achieve through their stimulus investments, will be extraordinarily consequential in ensuring that they can build back stronger and better. We also suggested that NDCs, national development strategies, and master plans or national adaptation plans deserve considerable attention in stimulus discussions. They often provide a window into the government’s vision for areas of future economic growth and technology transformation, both of which have clear linkages with job creation.
How can the World Bank help countries plan for and achieve long-term decarbonization through country programs, technical assistance, lending, and knowledge products? Doing so requires the Bank to not only look 3–5 years ahead, roughly equivalent to typical election cycles, but look decades ahead, and then work with our clients to determine the near- and mid-term implications. It means supporting the implementation of economy-wide strategies as well as cross-sectoral initiatives, and not only focusing on single-sector initiatives, such as individual energy or transportation projects. Coinciding with a need for a major, global economic recovery – triggered by the pandemic – this ‘whole of economy' approach to deliver better growth and a better climate could provide the sustainable and resilient foundation for countries as they build – or rebuild – their economies.
Effective action on resilience and climate change adaptation can be a complex task—requiring coordinated efforts from the highest levels of government to individual households and firms. The Adaptation Principles offered a guide to effective climate change adaptation, containing hands-on guidance to the design, implementation and monitoring of national adaptation strategies. It laid out six guiding principles: ensuring resilient foundations through rapid and inclusive development; facilitating the adaptation of firms and people; adapting land use and protecting critical public assets and services; increasing people’s capacity to cope with and recover from shocks; anticipating and managing macroeconomic and fiscal risks; and ensuring effective implementation through prioritization and continuous monitoring.
The World Bank – as trustee of the Forest Carbon Partnership Facility – has now signed landmark Emission Reductions Payment Agreements with governments in eight countries; Chile, Costa Rica, Côte d'Ivoire, Democratic Republic of Congo, Ghana, Indonesia, Mozambique, Vietnam. These will deliver over $450 million to governments, Indigenous Peoples, local communities and other stakeholders for efforts to lower carbon emissions from deforestation and forest degradation through 2025. The total portfolio of programs is expected to result in 160 million tons of emission reductions which is the equivalent of taking 34.5 million cars off the road for a year.
The Bank’s flagship event on climate change action launched I4C Webinars for Climate Innovation and Blog Series to facilitate knowledge exchange on the latest findings, best practices, and opportunities to accelerate climate action. In total, the webinar series hosted 18 sessions with over 3500 participants, covering topics from the role of carbon pricing in a sustainable recovery, and long-term strategies to transformative climate finance and innovation on climate adaptation. In partnership with think tanks and private sector organizations, the blog series published 15 blog posts discuss topics aligned with I4C’s four content pillars - finance, markets, policy, and technology.
Youth will disproportionally face the consequences of climate change and are demanding urgent global action. Their stories, ideas and proposals can help shape a green and inclusive recovery from the Covid-19 pandemic. With this in mind, Connect4Climate ran #Youth4ClimateLive, a series of virtual events to bring together a diverse group of youth at the forefront of creative climate action for intergenerational and interactive conversations with policy makers and climate experts. Hosted monthly, the series focused on a wide variety of topics such as driving a sustainable recovery, nature-based solutions, and protecting the most vulnerable, with the goal of providing the global youth community with a space to exchange their views and solutions and help drive climate ambition in the lead-up to Pre-COP26 and COP26.
The CIFs have an extensive track record in delivering transformative climate finance which it brings to supporting countries as they limit the health, economic, and social damages wrought by the COVID-19 pandemic. Over one million people have lost their lives. Businesses are struggling to survive the global recession that has ensued, and people are losing jobs and livelihoods, leading to increased hunger and poverty. The CIFs extensive implementation experience across a range of sectors offers important lessons for how climate-related investments can support COVID-19 recoveries. Building on this track record and lessons learned the CIFs has positioned itself at the frontier of climate action through the development of new investment programs in the areas of integration of renewable energy into power systems, including energy storage, accelerating the coal transition, climate-smart urbanization, natural capital, and decarbonized industry. These will play a key role in supporting developing countries in ensuring a green and resilient recovery.
In fiscal year 2020, the IFC committed $3.3 billion dollars for its own account for climate related projects - almost a third of its total investments. IFC also mobilized $3.5 billion from other investors. IFC also helped develop and strengthen climate finance standards, for example by leading the Multilateral Development Banks’ Climate Heads group to promote greater consistency in climate reporting. Other notable accomplishments include: Uzbekistan became the first country outside of Africa to join the Scaling Solar program, aiming to build a 100-megawatt utility scale solar plant and generate one of the lowest energy tariffs in the region; IFC worked to accelerate the adoption of sustainable public transport solutions – including electric buses and tramways - in cities such as Cali, Colombia; Lviv, Ukraine; Ho Chi Minh City, Vietnam; and Casablanca, Morocco; by year end, IFC’s internationally-recognized green building certification system, EDGE, had certified over 16 million square meters of floor area around the globe; and IFC anchored green bond issuances in new markets, including investing $200 million in the Standard Bank of South Africa Limited's green bond, the largest of its kind in Africa, with the potential to reduce greenhouse gas emissions by 3.7 million tons over a five-year period. This comes on top of IFC’s own green bond issuance program which marked this year its tenth anniversary, reaching more than $10.4 billion.