World Bank Group President Jim Yong Kim has announced a major increase in the Bank Group’s financing to help countries combat climate change by building low carbon and resilient development.
The Bank’s president has announced that the institution will increase its climate financing to potentially $29 billion a year by 2020 with the support of its members.
The announcement came at a special meeting of finance ministers from around the globe, hosted by France and Peru, on the sidelines of the annual meetings of the World Bank Group-IMF in Lima, Peru.
And it comes just about two months before this year’s COP21 conference in Paris, the international climate talks. In Paris, countries are expected to agree on negotiated text to work on financing issues, including the 2009 Copenhagen commitment for $100 billion a year for developing countries by 2020.
The Lima meeting, the first and last meeting of finance ministers ahead of Paris, saw real progress towards meeting that goal with all multilateral development banks making commitments on financing.
Ahead of Paris, countries have been lodging their national plans to tackle climate change with the plans officially called the intended nationally determined contributions (INDCs). Those national plans spell out countries’ efforts to bring down greenhouse gas emissions and adapt to a rapidly changing climate.
And they clearly signal developing countries’ need for more resources to help address the challenges of climate change. To date, about 21 percent of the Bank Group’s funding is climate related. Under the plans, that could rise to 28 percent in 2020, representing a one third increase in climate financing. Today, the Bank Group’s average direct financing for climate totals about $10.3 billion. So if current financing capacity is maintained, this would mean an increase to $16 billion in 2020.
The Bank Group also plans to continue current levels of leveraging co-financing for climate related projects. At current levels that could mean up to another $13 billion a year in 2020. So with the leveraging and direct financing together that represents an estimated $29 billion.
The investments will boost support for renewable energy and energy efficiency, climate-smart transport solutions, resilient cities, the restoration of degraded forests and landscapes, enhanced water security, and agricultural practices.
In making his announcement, the Bank president called the financing of climate action a “collective challenge….we all know that country needs for ending extreme poverty and boosting shared prosperity and combating climate change are enormous.”
Together, he said, everyone had to find ways to respond to the expected rising demand. Ahead of the Paris talks, the Bank Group has called on leaders to show real political ambition, saying the meeting represents a critical opportunity to galvanize political will for urgent action.