The World Bank Group today unveiled its new Climate Change Action Plan, which aims to provide poor nations with unprecedented levels of climate finance, cut emissions, boost adaptation, and align financial flows with the Paris Agreement’s goals.
The World Bank Group’s efforts in the Action Plan for 2021-25 expand beyond funding in “green” projects to assisting nations in fully integrating their climate and development goals. The Plan also comes as governments look for long-term solutions to the COVID-19 pandemic’s impact.
Providing significant increases in climate finance is one of the Action Plan’s highlights. The World Bank is already the largest multilateral provider of climate finance to developing countries, and the Plan commits to increasing delivery to an average of 35 percent of total World Bank Group climate financing over the Plan’s lifespan. Adaptation will receive at least 50% of climate money from the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD).
To inform future World Bank Group climate engagements and investments, we are identifying and prioritizing possibilities for high-impact climate action. The Country Climate and Development Report (CCDR), a new fundamental diagnostic tool, will assist countries in aligning climate action and development initiatives, as well as absorbing new climate-related technology as they emerge.
Increasing support for nations in implementing and upgrading their Nationally Determined Contributions and Long-Term Strategies in accordance with the Paris Agreement; and changing incentives by eliminating subsidies for greenhouse gas emissions and increasing taxation on them.
Increasing initiatives to build carbon credit markets, green bonds, and loan markets in countries; and assistance for global public goods in the poorest countries using IDA funding and other sources.
Prioritizing action in critical systems that must be altered to address climate change, establish a resilient and low-carbon future, and promote the protection of natural capital and biodiversity, such as energy, agriculture, food, water, and land; cities; transportation; and manufacturing.
Aligning all World Bank Group finance flows with the Paris Agreement’s goals to help nations meet their climate commitments. Beginning July 1, 2023, the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), will align all new operations. Starting July 1, 2023, 85 percent of the World Bank Group’s private sector development arms, IFC and MIGA, will be aligned, and 100 percent of these operations will be integrated starting July 1, 2025, two fiscal years later.
The World Bank Group’s Board of Directors will be updated on the Action Plan’s execution on a regular basis.
The new Action Plan builds on the World Bank Group’s previous Climate Change Action Plan, which saw over $83 billion in climate funding given over five years, including a record $21.4 billion in 2020.