World Bank

Integration of climate mitigation and resilience in key sectoral strategies

This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.

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Paris alignmentReasoning
Some progressOverall there is some integration of climate mitigation and risks in the sectoral strategies. Clear references to the Paris Agreement are missing throughout the sectoral strategies. Resilience in Water and Energy sector are well addressed.
MitigationResilience
EnergySome mitigation incorporated but no commitment to complete phase out of fossil fuel financing, downstream oil and gas not excluded.Energy Sector Directions Paper refers extensively to climate resilience with examples and resilience solutions.
TransportClimate change is mentioned as one of four priority goals, but further strategic refinement is missing.Climate adaptation is included in the priority goals, but further strategic refinement in the sector lending is missing.
WaterWorld Bank Website briefly mentions role of water in mitigation.The Strategic Action Plan details the risks for water associated with climate change and how the World Bank supports increased resilience.
CitiesBrief reference to role of GHG emissions in urban development. No strategic engagement with the issue visible.The focus is on preparing cities for climate risks.

Explanation

Energy

The World Bank Group (WBG)’s energy policy is focused on promoting clean energy and energy access, and the policy also includes some reference to climate resilience. Climate resilience is relatively well integrated into its Energy Sector Directions Paper (2013), elaborating on specific risks, such as for hydropower generation and how the WBG intends to address these. However, the Directions Paper also includes statements to increase the WBG’s engagement in natural gas as a clean and cost-effective transition fuel. The Bank has committed to supporting countries to meet their NDCs, and more broadly from 2019, the Bank will not finance upstream oil and gas projects unless in exceptional circumstances, which is a good first step but does not represent Paris alignment.

The WBG only permits coal financing in rare circumstances. The World Bank Group’s  Energy Sector Directions Paper (2013) states the WBG will provide financial support for greenfield coal projects “only in rare circumstances” and that “meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases”.  It should be noted that in 2018 the World Bank withdrew from its last coal project in Kosovo.

Furthermore, last year the WBG, along with Canada and the UK, announced financial and technical advisory support for middle- and low-income countries that have decided to embark on the transition from coal to clean energy.

There are some examples where WBG is helping overcome barriers to incorporating climate resilience and supporting the development of institutional frameworks to enhance resilience at country level.

However, although the WBG has committed to supporting countries in meeting their NDCs, its energy strategy does not go far enough to support an enduring transition to fossil free energy systems (similar to the case with the transport sector). The recent initiative with the UK and Canada seems to be demand-led.  

Energy is part of the sectoral five-year targets for 2025:

  • 36 GW of renewable energy and 1.5 million GWh-equivalent of energy savings through efficiency improvement.

Transport

On its website, the World Bank states that transport is based around four priority goals: access for all, efficiency, safety and climate change. The climate change priority includes both mitigation and adaptation and refers to the Paris Agreement. Given the importance of mitigation in the transport sector, this is not enough detail provided. Further clarification would be needed on internal strategies that reiterate these goals and have established targets for the sector lending to adhere to these goals. The World Bank has outlined its vision for a low-carbon sector in the flagship report Turning the Right Corner (2013). Clarification would be needed in how far the report has contributed to the strategic re-alignment for transport sector lending. The World Bank has been central to the development of the Sustainable Mobility for All (Sum4All) initiative created in 2016. The initiative is aligned with the Paris Agreement and provides clear evidence on mitigation and resilience aspects. The country diagnostics are a comprehensive tool to understand sustainability issues in respective transport sectors.

Water

As regards water, the WBG launched its new Strategic Action Plan in 2019. The goals are to be delivered through three pillars: (1) sustain water resources, (2) deliver services, and (3) build resilience. The Strategic Action Plan details the climate risks in the waters sector and tools that the World Bank uses to mitigate these risks (Hydromet services, forecasting tools for floods and droughts), but fails to refer to the Paris Agreement. Therefore, WBG water policy seeks to address climate change and promote resilience and access to water supplies at the country, project and river basin level. The World Bank website on water  briefly mentions the need for sustainable water management in mitigating greenhouse gas emissions. Water is seen to be at the centre of climate adaptation.

Cities

Climate change features as one of three goals for the World Bank’s strategy on sustainable cities. As regards cities and urban policy, the World Bank engages strategically through its Global Facility for Disaster Reduction and Recovery to prepare cities for climate risks. This approach is realized under the City Resilience Programme. There appears to be less focus on climate mitigation within the WBG’s urban development strategy, only the fact that cities account for a large proportion of GHG is mentioned.

Cities are part of the sectoral five-year targets for 2025:

  • 100 cities achieve low-carbon and resilient urban planning and transit-oriented development


 

Last Update: November 2020

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