Why the World Bank is Taking on Climate Change

If you had a life-threatening illness and there was near unanimous consensus among doctors about the cause, what would you do?

We know that climate change, left unchecked, threatens the health, homes, and livelihoods of millions of people around the globe, with the poorest and most vulnerable hit the hardest. 

This week, the United Nations Intergovernmental Panel on Climate Change (IPCC) will release a major report that is expected to raise the panel’s certainty that human activity, particularly the burning of fossil fuels, is the cause of much of the warming seen in recent years. In New York, World Bank President Jim Kim will also be speaking at the opening of Climate Week on Sept. 23 on the impacts of climate change on poverty and the need for action.

“Decades of progress are now in danger of being rolled back because of climate change,” Kim says. "This is a ‘make-or-break’ decade for action on global warming. The time to address the interlinked challenges of climate change and ending extreme poverty is now.” 

The IPCC report, prepared by hundreds of scientists as an update from the panel’s 2007 report, is expected to reinforce predictions of rising sea levels and of the increasing likelihood of heat waves and other extreme weather. Its findings are expected to strengthen the scientific case for urgent action on climate change, described in the World Bank’s “Turn Down the Heat” reports. The Bank reports warned that the world would warm by 4 degrees Celsius without concerted, immediate action, and that a 2 degree Celsuis warmer world – conditions we could experience in our lifetimes – will keep millions of people trapped in poverty.

No time to waste

The World Bank Group has already made climate change a priority. We know the world cannot afford to wait, and we are stepping up our mitigation, adaptation, and disaster risk management work.

President Kim has called for a global response equal to the scale of the climate challenge and bold ideas that will make the biggest difference:

• Building low-carbon, climate-resilient cities by mobilizing direct finance and expertise and helping fast growing cities avoid locking in carbon intensive infrastructure. In New York this week, Kim plans to announce a new initiative on cities at an event with the Clinton Global Initiative.
• Moving forward on climate-smart agriculture through building an Action Alliance to realize the triple win of increasing yields and income, making farms more resilient to climate change, and helping to sequester carbon in the soil.
• Working with others to accelerate energy efficiency, investment in renewables and universal access to modern energy.

To move forward at the required scale means driving mitigation action in top-emitting countries, getting prices and incentives right, and getting finance flowing for low-carbon green growth. The Bank is also exploring:

• Laying the groundwork for placing a robust value on carbon.
• Supporting the removal of harmful fossil fuel subsidies.

Walking the talk

Below are some highlights of the Bank’s work over the past three months.

• About half of 125 active Bank projects in China are directly related to climate change. President Jim Yong Kim visited China earlier this month to discuss ways to expand collaboration. In Shanghai, he saw how the Bank Group and China are helping the city go green and discussed with clients the role financial institutions play in building energy efficiency.
• The Bank launched a report on short-lived climate pollutants (SLCPs), which identified ways the Bank could reduce SLCPs through its projects. The report found that between financial years 2007 and 2012, 7.7% of World Bank commitments, or approximately $18 billion, were on SLCP-relevant activities in energy, transport, roads, agriculture, forestry, and urban waste and wastewater.
• With the launch of a $550 million green bond, the total amount of World Bank green bonds passed $4 billion. Green bonds have become an important source of funding for countries looking to grow in a clean and sustainable manner.
• Under a deal with the Bank-led Forest Carbon Partnership Facility, Costa Rica became the first nation on track to access large performance-based payments for conserving its forests, regenerating degraded lands, and scaling up agro-forestry systems for sustainable landscapes and livelihoods.
• A study led by a World Bank economist pinpointed cities around the world that will be most at risk to climate-induced flooding. The study estimated that costs of global flood damage could rise to $1 trillion annually unless cities take steps to adapt to rising sea levels.
• The Bank and government of Norway will finance sustainable land management, climate-smart agriculture, and forest protection in Ethiopia, a country vulnerable to extreme weather and food insecurity. The latest round of financing will boost efforts by the government to make the East African nation carbon neutral by 2015.
• As part of a new energy strategy, the Bank approved $340 million for the Regional Rusumo Falls Hydroelectric Project, which will generate 80 megawatts of renewable energy, new jobs and lower electricity costs for people in Burundi, Rwanda, and Tanzania.
• Bangladesh received $375 million in concessional financing and $25 million in a grant from the Bank to increase the resilience of the coastal population to climate change-induced flooding and other natural disasters.

Working with partners is a critical part of our efforts to bend the curve on carbon emissions. President Kim, along with Al Gore, and World Bank Vice President for Sustainable Development Rachel Kyte along with UNFCCC Executive Secretary Christiana Figueres were also participating this week in a Social Good Summit sessions focused on climate change. The three-day summit attracts technology and social change leaders who meet to brainstorm creative and innovative solutions to global challenges.

In a week with a flurry of events focused on climate change, the underlying message is this: If we don't confront climate change, we won't end poverty.