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Financing of Climate Change Mitigation and Adaptation

The World Bank Perspective

ECOSOC-BWI MeetingUnited NationsApril 14, 2008

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Bank Work on Climate Change is about development in the context of climate change

• Priority of growth, poverty reduction and MDGs• Importance of meeting energy needs of developing

countries• Development imperative of helping to adapt to climate

risks• Resource mobilization in addition to the current ODA

levels

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Framework for Action1. Make effective climate action – both adaptation and

mitigation - part of core development efforts2. Address the resource gap through existing and

innovative instruments for concessional finance3. Facilitate the development of innovative market

mechanisms;4. Create enabling environment for private sector finance; 5. Accelerate the deployment of existing and

development of new climate-friendly technologies;6. Step-up policy research, knowledge management and

capacity building

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World Bank Lending - Portfolio FY07

GHG Emissions by Sector, IBRD-IDA Countries

Electricity & Heat20%

Industry13%

Other11%

Agriculture15%

Land-Use Change & Forestry

32%

Transportation6%

Waste3%

Total IBRD-IDA Lending by Sector, FY07

Financial & PSD8%

Energy & Mining5%

Transport19%

Urban Development

6%Water10%Agriculture &

Rural Development

12%

Other40%

Much of WB lending is in sectors with largest potential for adaptation and /or mitigation, creating numerous opportunities to make a difference

Clean Investment Funds

• It is proposed that the portfolio of funds/programs initially include:– The Clean Technology Trust Fund to help

countries undertake transformative projects to reduce carbon emissions

– The Strategic Climate Fund (including the Pilot Program for Climate Resilience) is an umbrella program to study and pilot activities on the ground to learn best how to build climate resilience into development

Common Features of the CIFs

• Incentives for Scaled-up action and transformational change

• Promote cooperation and support towards a post 2012 agreement

• Provide experience and lessons• Utilize skills and capabilities of IFIs• Support investments based on country-led

strategies• Maximize co-benefits, and • Be flexible and efficient

Thank you