Country Climate and Development Reports – From Climate Crisis to a New Development Agenda

KEY HIGHLIGHTS

• 2.4 billion people (34 percent of world’s population) will potentially benefit from climate and development resilience measures in countries covered by Country Climate and Development Reports (CCDRs).
• $146 billion expected gains from reduced energy imports and air pollution in Türkiye (2022–40).
• Nearly $67 billion benefits expected from increased tree plantations under the net zero deforestation scenario in Ghana by 2050.
• 35 percent of World Bank’s total financing provided for climate action in FY22.
• 34 percent of global GHG emissions covered in recommendations of existing CCDRs.
• 30 percent expected reduction in energy production in textile industry in Bangladesh.

CHALLENGE  

A Global Crisis, Local Impacts

Climate change poses a major threat to long-term development objectives, especially poverty reduction. If unchecked, climate change will push up to 130 million people into poverty by 2030, reversing decades of development gains.

The poorest and most vulnerable people bear the brunt of climate change impacts, yet contribute the least to the crisis. Over the last decade, IDA countries have been hit by nearly eight times as many natural disasters relative to the 1980s. Climate and weather extremes are disproportionately affecting certain regions and countries, particularly Small Island States, and countries in Africa, Asia, Central and South America, and the Arctic. Climate change is a powerful driver of internal migration, because of its impacts on people’s livelihoods and loss of livability in highly exposed locations; it could force 216 million people across six world regions to move within their countries by 2050.

The scale of the current global hunger and malnutrition crisis is enormous, with more than 345 million people facing high levels of food insecurity in 2023 – more than double the number in 2020. Although conflict is still the biggest driver of hunger, with 70 percent of the world’s hungry living in areas afflicted by war and violence, climate shocks destroy crops and livelihoods, and undermine people’s ability to feed themselves. About 80 percent of the global population most at risk from crop failures and hunger from climate change are in Sub-Saharan Africa, South Asia, and Southeast Asia, where farming families are disproportionately poor and vulnerable, and a severe drought caused by an El Nino weather pattern or climate change can push millions more people into poverty. Between 2010 and 2020, human mortality was 15 times higher in highly vulnerable regions, from floods, droughts and storms compared to regions with very low vulnerability. In 2021 in Angola, for instance, 3.8 million people were reported to have insufficient food and 1.2 million people face water scarcity because of droughts. In the Sahel countries, the poverty rate could increase from 27 to 34 percent, with another 13.5 million people falling into poverty.

Accelerated emission reductions are needed, particularly in high-income and other high-emitting countries. This has been acknowledged in multiple climate summits since 2015, including at the last COP27. A recent IPCC report highlights that soft limits (scenarios where there may be options to cope with the impacts of climate change, but are not available due to cost or technological limitations) to some human adaptation have been reached, but can be overcome by addressing a range of constraints, primarily financial, governance, institutional and policy constraints.

APPROACH 

A Template for Sustainable, Climate-conscious Development

The World Bank is committed to promoting sustainable, long-lasting, and socially equitable responses to climate change. In 2022, to demonstrate that emissions can be reduced without compromising development, the World Bank launched the CCDRs, country-specific roadmaps to green, resilient and inclusive development. CCDRs show which strategies will do the most, and work the fastest, to reduce GHG emissions in each country, while achieving other development goals. 

As of October 2023, 26 CCDRs have been produced covering 30 countries.17 More will be rolled out to all World Bank countries over the next five years. These reports are a core element of the World Bank’s Climate Change Action Plan 2021-2025, which outlines how World Bank institutions will support climate action in developing countries. The reports are shifting the discussion from distant impacts into immediate and actionable recommendations for decisionmakers today. They build on countries’ own development priorities to help them and the global community prioritize the most impactful actions to reduce GHG emissions and boost adaptation, while delivering on broader development goals. For the World Bank, CCDRs feed into country engagement tools with clients, such as Systematic Country Diagnostics (SCDs) and Country Partnership Frameworks (CPFs), and ultimately into lending, increasing the climate impact of interventions.

The CCDR development process follows a holistic approach based on a diverse and complementary set of models, selected according to the country context, including local climate risks and economic strengths and opportunities. Key indicators include macroeconomic and distributional outcomes (GDP, consumption, poverty, inflation, exchange rates, fiscal impacts, debt); sectoral indicators (energy prices, industrial, agricultural and service sector outputs); and co-benefits (health and productivity improvements from reduced air pollution, carbon tax efficiency gains). The process varies from country to country, and mainstreams climate expertise across the World Bank and external stakeholders. 

RESULTS  

Mapping the Potential for Meaningful Action

The Climate and Development: An Agenda for Action report compiles and harmonizes results from the CCDRs. One of its main findings on the investment needed to reduce GHG emissions is that CCDR low-carbon development strategies reduce emissions by 70 percent, without significant impact on growth, provided that policies are well designed, and financing is available.18 The analysis shows that investment needs average 1.4 percent of GDP, but in lower-income countries, financing needs can exceed 5 percent, which will require more support from high-income countries, including increased concessional finance and grants.

At COP27, the World Bank shared key findings from the first batch of its CCDRs, covering 24 countries, more than a third of the global population and accounting for a third of GHG emissions. The key takeaway from this first round of reports is that countries can continue to grow and develop while reducing emissions if they embrace major change. Doing so could result in a 70 percent reduction in GHG emissions from current levels, by 2050. However, financing and policy reform remain key challenges to green, inclusive, and resilient development. Financing for climate action in FY22 reached over 35 percent of total Bank financing, exceeding the target set in the World Bank’s Climate Change Action Plan for 2021-2025.

The CCDRs identify high impact areas of action, with a focus on actions that can be implemented over the next 7-10 years. For instance, CCDRs are showcasing low-carbon, resilient investments that would generate benefits that partially or completely offset costs:

• In Türkiye, major benefits from reduced energy imports and lower air pollution are estimated to lead to economic benefits of $146 billion over by 2040 (1 percent of GDP). 

• In Ghana, under the net zero deforestation scenario, additional timber revenues from increased tree plantations could outweigh the costs of investment for planting, maintenance, and enforcement, leading to a $66.8 billion gain over 2022–2050.

• In Bangladesh, energy efficiency solutions can reduce energy consumption by around 30 percent in the ready-made garment and textile sector, and increase productivity by 10 to15 percent.

• In Vietnam, a recently signed $15.5 billion Just Energy Transition Partnership (JETP) represents an ambitious effort to support the country’s low-emission and climate resilient development, as well as to accelerate the just transition and decarbonization of the electricity system.

• In Morocco, it is estimated that over 85 percent of electricity could be generated from renewable energy by 2050, up from 20 percent in 2021. This could lead to a net gain of around 28,000 jobs per year in the renewable energy and efficiency sectors alone.

Several CCDRs were showcased at COP27, bringing together the World Bank teams that worked on them with ministers and officials from China, South Africa, the Sahel G-5 countries, Philippines, Pakistan, Malawi, Rwanda, Argentina, and Nepal. Country representatives welcomed the findings of the CCDRs as they inform their investments to boost development outcomes, including in critical infrastructure or to safeguard communities and livelihoods. “Capacity, robust policies, and finance are critical for Malawi to build infrastructure that can withstand climate shock and stresses, to halt and reverse forest and environmental degradation, as well as to address climate impacts for labor productivity, as well as household livelihoods,” said Stella Gama, Director of Forestry, Ministry of Natural Resources, Energy and Environment, Malawi.

PARTNERSHIPS

Harnessing a Diverse Knowledge Base

CCDRs are being prepared with expertise from across the World Bank Group’s three institutions, as well as coordination with the International Monetary Fund (IMF), which is using CCDRs as an analytical underpinning for their own resilience and sustainability trust lending. These reports also benefit from engagement with government counterparts, the private sector, academia, think tanks, and civil society. 

DATA HIGHLIGHTS

LOOKING AHEAD  

Towards a Transformational Climate Agenda

The CCDR program will be rolled out to all World Bank client countries over the next five years, representing the single most comprehensive resource on the impacts of climate change at a country level. However, what will make these reports transformational is translating their analysis into policy, and action. For countries, this means translating diagnostics into country-owned strategies and implementable investment plans. For the World Bank, CCDRs will be invaluable in enhancing CPFs, operations and engagements in development and climate action in the next decade.