The World Bank has said that Investing an average of more than 1% of GDP annually could reduce emissions in developing countries by as much as 70% by 2050 and boost resilience.
However, it added the GDP percentage will vary and that public sector investment must go hand in hand if the world’s climate aims are to be achieved.
The analysis, “Climate and Development: An Agenda for Action”, compiles and analysed results from the Bank Group’s Country Climate and Development Reports, covering over 20 countries that account for 34% of the world’s greenhouse gas (GHG) emissions. It showed that investment needs are markedly higher in lower-income countries which are more vulnerable to climate risk, often exceeding 5% of GDP. These countries will need increased amounts of concessional finance and grants to manage climate change impacts and develop along a low-carbon path.
The report highlights lessons for countries on integrating climate and development objectives. It found that this approach to climate action can help them manage the negative impacts of climate change, while generating positive impacts on GDP and economic growth, and deliver critical development outcomes such as reducing poverty. The key conditions for success include impactful reforms, improved allocation of public resources, higher mobilisation of private capital, and significant financial support from the international community.
“Achieving climate and development objectives must go hand in hand. Climate action is a key global public good, requiring significant new financing from the global community and mechanisms for inflows,” said World Bank Group president David Malpass. “Well prioritised and sequenced climate actions, strong participation of the private sector, substantial international support and a just transition are critical components for impact.”
The report added that while all countries have to increase their climate action, high income countries with their greater responsibility for emissions need to lead the way with deeper and more rapid decarbonisation, as well as increased financial support to lower income countries. Major current and future emitters in the developing world also have a key role to play for the world to achieve the goals of the Paris Agreement. The report also examines the technologies and innovations needed for lower carbon intensity production of electricity, steel, cement, and manufacturing, and how the world will build green and efficient supply chains for a sustainable future.
“Country Climate and Development Reports combine the best available data, models, and tools and aim to provide policymakers with immediate and actionable recommendations to guide climate and development decisions today,” the World Bank explained. “They are a core element of the World Bank Group’s Climate Change Action Plan, which outlines how the WBG will support climate action in developing countries.
Countries need to prioritise and sequence key investments and policy reforms, according to the report.
“These will deliver multiple benefits. And emission reductions can deliver immediate development outcomes such as reduced vulnerability to fossil fuel price volatility, improved trade balances and enhanced energy security, and better air quality and related positive health impacts. Early action can also avoid locking countries into high emitting infrastructure and systems, which will be costly or even impossible to transform in the future.”