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This event took place on April 21, 2022

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00:03 [Upbeat Music]
00:12 [Spring Meetings 2022]
00:16 [Climate Change]
00:18 [Green Recovery]
00:20 [Energy Transition]
00:23 [Climate Action]
00:25 [Adaptation]
00:28 [TRANSITIONING ECONOMIES & TRANSFORMING CLIMATE: FINANCING CLIMATE ACTION]
00:38 Hello and welcome, everyone.
00:40 [Meriem Gray] I'm Meriem Gray, and I'm joining you live
00:42 at the World Bank Group headquarters here in Washington, DC.
00:46 The focus of the Spring Meetings this year
00:49 is investing in resilience and managing uncertainty.
00:52 [Meriem Gray, Communications Lead, Sustainable Development, World BANK]
00:53 Topics of critical relevance today as the war in Ukraine,
00:56 COVID and climate change are generating unprecedented challenges.
01:01 While all countries will be affected, the effect on developing countries
01:05 will be much worse, whether through higher food and energy prices,
01:09 weakening economic prospects, or increasing climate impacts.
01:14 Leaders from around the world are meeting here
01:16 to discuss these impacts and to shape solutions
01:19 that can build stronger, safer and more prosperous communities.
01:24 Today, we will be looking at what it will take to advance climate action,
01:28 especially at the time of tightening fiscal constraints.
01:31 What are the financing needs for climate smart future?
01:35 How can resources be effectively leveraged?
01:38 What kinds of capital can support specific low carbon resilient investments?
01:44 And most importantly,
01:45 how the climate and development agendas are connected so that working on one front
01:50 also advances outcomes for the other and they really deliver
01:54 for people and human well-being?
01:57 [LIVE.WORLDBANK.ORG] A reminder, we are streaming this event
02:00 in English, Spanish, Arabic at live.worldbank.org.
02:04 Let's take a look at what's coming up over the next hour.
02:10 [COMING UP]
02:16 [FINANCING THE LOW-CARBON TRANSITION]
02:18 [Sri Mulyani Indrawati, Finance Minister, Indonesia]
02:21 [David Malpass, President, World Bank Group]
02:24 [UNLOCKING PRIVATE FINANCE FOR CLIMATE ACTION]
02:26 [Rania Al-Mashat, Minister of International Cooperation, Egypt]
02:29 [Yves Perrier, Chairman of the Board, Amundi]
02:34 [Rhian-Mari Thomas, CEO, Green Finance Institute]
02:37 [Makhtar Diop, Managing Director, IFC]
02:43 [THE WAY FORWARD FOR CLIMATE FINANCE]
02:44 [Lord Stern, IG Patel Professor of Economics and Government, London School of Economics]
02:46 [Mari Pangestu, Managing Director of Development Policy and Partnerships, World Bank]
02:51 [Meriem Gray] We have many interesting discussions coming up and to start,
02:54 the President of the World Bank Group, David Malpass, invited
02:58 Her Excellency Sri Mulyani Indrawati, Minister of Finance of Indonesia,
03:02 to discuss issues around climate action,
03:04 a topic they have frequently discussed together.
03:09 [David Malpass] Thank you very much, Meriem.
03:11 I want to welcome everybody to today's discussion.
03:15 It's a pleasure to be here with her Excellency Sri Mulyani Indrawati.
03:21 She's the finance Minister of Indonesia,
03:23 and she's also so a senior host within the G20 process this year.
03:28 We're going to be discussing climate change and also the big challenge
03:33 of development along with global public goods.
03:37 So with that, thank you very much, Sri Mulyani, for joining us.
03:42 We spoke together last year,
03:44 a year ago on this topic and also at Glasgow at COP26.
03:48 Since then, I'll give you a brief update,
03:51 the World Bank has been implementing the Climate Change Action plan
03:56 which is based on integrating climate and development
04:00 and directly recognizing the value of global public goods.
04:04 We have much higher spending targets for the World Bank Group,
04:08 and we're also looking to have those spending and engagements
04:13 with countries be as effective as possible.
04:16 We're doing that through reports
04:18 for countries around the world, CCDRs that we think will be
04:23 a powerful instrument to help countries
04:26 think about their own engagement with both development
04:30 and integrating it with climate.
04:32 Around the world, we're working to lower greenhouse gas emissions.
04:36 This is a challenging task and also carry out adaptation,
04:41 help countries with their preparations for climate changes.
04:45 We're working in other areas of global public goods,
04:48 such as marine plastic and conservation,
04:51 all of which take money from the world community
04:55 and apply it to specific global public goods
04:59 that are goals of the whole world community.
05:02 We now are faced with the war in Ukraine.
05:05 It's having a compounding effect on the cash flow,
05:10 on human tragedy going on in Ukraine itself,
05:14 higher food and fertilizer, and energy prices around the world,
05:19 which puts strain on budgets such as the Indonesian fiscal budget.
05:26 It's causing stress on top of the pandemic.
05:29 We see that Europe is changing,
05:32 its thinking about some aspects of global public goods,
05:36 including its stand toward natural gas,
05:40 which is an important source of energy, and nuclear power also,
05:44 and a very important source of base load for electricity production.
05:49 So those are some of the challenges that the world faces as a whole.
05:54 As we get specific, I'm going to ask
05:59 Finance Minister Sri Mulyani how she thinks about the connection
06:05 between financing of projects, which is a challenge in itself,
06:10 and something that the World Bank is very well-positioned to help with.
06:14 But it's expensive and for the whole world community
06:17 to be participating in the financing.
06:20 Welcome, Minister Sri Mulyani.
06:23 [WASHINGTON, DC, USA] [JAKARTA, INDONESIA] I'll launch right in.
06:26 I want to ask about the coal transition in Indonesia.
06:31 How can it be financed?
06:32 What are some of the problems you've encountered?
06:35 What are some of the steps that the world needs to go through in order to help
06:40 in the effort toward reducing greenhouse gas emissions in Indonesia?
06:45 Thanks for joining today.
06:48 [Sri Mulyani] Thank you, President Malpass.
06:50 It's really good to see you also and I would like to congratulate you.
06:53 Under your leadership, the World Bank Group has been very good in responding
06:58 to many of the membership challenges,
07:00 especially related to the global public goods issues.
07:04 First, the pandemic which you responded very well and quickly
07:07 to help many of the countries in the world
07:10 and then also now related to the climate change.
07:13 On climate change, Indonesia is one country but it's not a unique case.
07:19 We have already commit what we call
07:23 our National Determined Contribution to reduce our CO2,
07:27 29% of the CO2 reduction with our own effort
07:32 or 41% if we are going to get the support internationally.
07:37 The question now is how we are going to implement this commitment.
07:42 The biggest contributor of course for Indonesia, two very important ones:
07:48 the forestry as well as the energy sector.
07:51 In the energy sector, Indonesia has a rich natural resource,
07:56 we also rely very much on coal.
07:59 So currently, coal is actually the dominant energy mix
08:04 under the Indonesia energy fuel mix.
08:08 It is around more than 60%.
08:10 If we are going to reduce the CO2 which is coming from the energy,
08:15 definitely we require to address this issue at the coal,
08:19 and at the same time when the demand for energy continues to increase,
08:24 then we have to be able to build the replacement for coal
08:28 as well as satisfying the new demand.
08:33 On the coal which is related to how we are going to address the issue of coal,
08:38 we are designing what we call the energy transition mechanism.
08:42 But Indonesia, just like many other countries in the world
08:46 when we hit hard by the coffee [inaudible],
08:49 actually the demand for electricity declined.
08:53 At this very moment, when Indonesia already has around
08:57 270 gigawatts of energy capacity,
09:04 the demand is actually much lower than that,
09:07 around 20 gigawatts excess supply.
09:11 While the decision for us to build additional capacity in the past five years
09:16 has already created additional 13 gigawatts.
09:20 Now if we are going to produce coal, that means we have to decide
09:26 how we are going to retire the coal which is already contracted.
09:31 In Indonesia, we have what we call
09:35 the individual power purchase by the private sector.
09:38 Some of the power generator owned by PLN,
09:42 our electricity company which is state owned.
09:45 There are also power generators which are owned by the private sector
09:49 and they are contracting the energy to the PLN.
09:55 This contract is usually a long-term contract, 20 to 30 years.
10:01 If you want to retire coal that means we have to reduce the length of the contract.
10:08 Currently we've already identified five gigawatts of the core power energy
10:14 that is power generator with the qualification of their own
10:19 and that's why the efficiency is low and they are more polluting.
10:24 So among all those power generators sectors
10:29 which is actually coming from coal, we've already identified.
10:33 Now, to retire the coal
10:36 if it is owned by our own PLN, that is the electricity company
10:41 you don't have to renegotiate the contract.
10:44 This is just about retiring this old power generator
10:48 and then you have to replace it with a renewable one.
10:51 Still in this case, we have to make sure
10:55 that the renewable energy is going to be efficient technology
10:59 as well as in terms of financing, it needs to be secure.
11:03 That's why you need investment for the renewable energy.
11:07 For the retirement of the old coal power plants,
11:12 which belong to the private sector,
11:15 then you have to renegotiate contracts because there is a contract already,
11:21 this is take or pay usually.
11:23 We call it TOP, tax or pay,
11:25 and that's why we have to make sure that they are willing to then retire
11:30 in terms of the length of the contract, the rest of the contract that will be reduced.
11:35 Then compensated in the way
11:38 that it cannot be seen as violating the contract.
11:42 If you violate a contract, Indonesia has a very bad experience
11:45 in which we were in an international tribunal and we lost the case.
11:49 That's not really good, not financially but also reputation wise.
11:54 For us to do the energy transition mechanism
11:58 there are many issues that need to be addressed.
12:01 First, how you are going to renegotiate the contract
12:04 with the independent power producer
12:08 in, what we call it, an amicable way
12:11 that is going to be accepted through the good practice.
12:17 Then the second one, how you are going to compensate this contract
12:21 that will be reduced in terms of the length of their service
12:26 and where the money is coming from to compensate that deduction?
12:33 At what price? Is it going to be like the secure price?
12:37 Don't forget that sometimes coal can be not really efficient in the past.
12:43 The contract cannot really be seen as in the best interest for our PLN.
12:49 Sometimes it's just too costly, 12 cents kilowatt hour or 10 cents.
12:55 Sometimes, the price can be actually much lower than that.
13:01 That kind of situation on a technical level needs to be addressed.
13:08 Then the second one is where the money comes from to retire this coal.
13:13 Here we work with the Multilateral Development Bank.
13:17 I appreciate it.
13:18 With the World Bank, with the ADB we are talking about
13:21 what kind of structure is durable in this case.
13:25 Not to mention, in this case, the social and environmental consequences
13:29 of this power plant that will be retired.
13:32 Are they going to just like to become a sound capital?
13:36 An abandoned capital?
13:37 We also need to be thinking about that.
13:41 Then to replace with renewables,
13:43 we also need another capital spending to build the renewable energy.
13:48 For us the question is about the location
13:51 as well as the transmission and distribution.
13:54 Indonesia is an island country, David,
13:59 so the demand is mostly in Java,
14:03 but you also need to build for the outer Java Island
14:07 which is now growing very fast, like Sumatra and Kalimantan.
14:10 These all have their own source of renewable energy.
14:15 [David Malpass] Thank you for going through that.
14:17 I think it's relevant because so many countries face similar problems,
14:22 whether that's Vietnam, Turkey or South Africa,
14:25 dependence on coal, on either coal imports or coal itself,
14:33 and the high value of it, it's gone up in value even now
14:38 because of the rising energy costs around the world for other commodities.
14:43 You used a...
14:46 In Glasgow, you used a large number for the cost or the inflow of money
14:53 that would be needed for this effort.
14:55 One thing World Bank Group,
14:59 IFC and the World Bank have been looking at is
15:03 how to create a facility that would allow the coming together
15:06 of funding sources from around the world
15:09 and then focus it on a specific greenhouse gas emission reduction project.
15:16 We're at the point where we have to be concrete in
15:18 how to close a coal fired power plant in South Africa or in Indonesia.
15:25 Those proved to be really difficult challenges
15:27 because of the large cost and the long lifespan of the project.
15:32 It takes years and years to wind down the dependence on coal.
15:38 Do you want to share your thinking on the cost you used in Glasgow?
15:46 [Sri Mulyani] In this case, we identified the total cost for the reduction
15:50 based on the updated before the COP26 in Glasgow.
15:56 It's around 286 billion US dollars.
16:00 Mostly, it's actually for the energy.
16:01 We actually can have it much cheaper through the forestry.
16:05 That's why we're also supporting us on the mine groove refracting.
16:09 I think this also has a lot of potential for Indonesia,
16:13 but energy definitely is the highest in this case,
16:15 which is around 60% of the cost for that.
16:19 The question regarding how we are going to structure this.
16:24 First, you're right.
16:26 At this very moment, the coal price has even increased,
16:30 at some point, even reaching more than 400%.
16:34 I think it's extremely high in this case.
16:40 Now it's already going down again.
16:42 This is also for Indonesia.
16:44 Although we are among the biggest producers of coal in the world,
16:50 we have actually committed this coal for many of the exports.
16:54 That's why if we are going to compete with our own use for our own electricity,
16:59 Indonesia impose what we call domestic markup obligations.
17:04 So for the coal producer,
17:06 they have to provide our own coal needs for our electricity
17:12 before you can actually spend or sell it to the foreign or international market.
17:18 When the coal price is very high at some point,
17:21 actually, we were a little bit caught by surprise because suddenly
17:26 because suddenly the stock of coal domestically was shrinking very fast.
17:32 So we then turned around and made sure
17:34 that there will be really monitoring of the export of coal in Indonesia.
17:40 [David Malpass] These are big challenges.
17:42 There's going to be a full discussion today in other panels of some of these issues.
17:48 But the thing that strikes me is the large costs,
17:53 the complexity of the projects themselves, their long duration.
17:58 World Bank can help in structuring or thinking about
18:02 how to have commitments that last for years and years
18:05 between governments and their coal sector, for example.
18:09 But this core problem that you're mentioning right now
18:12 that the coal is either used in Indonesia
18:15 or it's exported and burned somewhere else,
18:18 that poses itself a giant global public goods problem for the world
18:25 of how do you lock in and how do you avoid
18:29 the ultimate use of those carbon holding products.
18:34 This is one that I think has to be tackled directly
18:37 in terms of global public goods and the financing for it.
18:41 [Sri Mulyani] Yeah. Thank you so much, David.
18:43 It is really a very important and challenging task for our country
18:47 because when we talk about a global public good like climate change,
18:51 this is not only about the idea or the intention,
18:54 but most importantly translating it into a very workable,
19:00 both investment decision and commitment.
19:04 In this case, what we call affordable transition
19:07 means that the access of capital needs to be cheap enough
19:11 to compensate this very costly capital commitment
19:16 and then also affordable in terms of availability of this financing.
19:21 The World Bank is in a very good place
19:24 for you to become both catalytic but also financing side
19:28 to be able to use the World Bank Group, IFC, MIGA,
19:32 as well as IBRD or IDA.
19:35 I think this is going to be one of the most important World Bank roles
19:39 in order to help many of the member countries
19:42 to be able to design a good and sound, and credible transition on energy.
19:47 Thank you so much.
19:49 [David Malpass] Thank you very much. Back to you, Meriem.
19:54 [KINGSTON, JAMAICA]
19:55 [Charmaine] I'm Charmaine from Kingston, Jamaica,
19:57 and you're watching the World Bank Group-IMF Spring Meetings.
20:04 [Meriem Gray] Thank you, David and Sri Mulyani for those insights
20:06 and a really interesting update on what has specifically changed
20:11 since they connected last year on these issues.
20:14 Please do share your thoughts on that discussion and those to come.
20:17 [#FINANCE4CLIMATE]
20:18 You can post your comments using the #Finance4Climate
20:22 and follow us on Twitter, Instagram, Facebook, and LinkedIn.
20:26 You can also post comments and questions at live.worldbank.org.
20:31 That's where we have our experts standing by
20:34 to answer your questions in English, Spanish, French and Arabic.
20:37 Let's take a look at some of them.
20:39 They are already busy at work.
20:42 We will be putting some of the most popular questions
20:45 to two World Bank experts at the end of today's event.
20:48 We are also inviting you to take part in our quiz challenge.
20:52 The question we are asking today is,
20:55 how much investment is needed each year to limit global warming, put resilience,
21:01 and support a global transition to net zero emissions?
21:06 Is it A? About $10 billion dollars a year.
21:10 B, about $100 billion dollars a year?
21:14 Is it even more than that?
21:15 C is about $1 trillion dollars a year,
21:19 and the last option is D, more than $2 trillion dollars a year.
21:24 You can cast your vote right now at live.worldbank.org,
21:28 and we'll bring you the results at the end of this event.
21:32 Before we go to our next discussion,
21:34 we ask one of our experts to help explain exactly how climate finance works.
21:40 Let's take a look.
21:41 [PUTTING THE PIECES TOGETHER]
21:44 [HOW TO FINANCE THE CLIMATE TRANSITION]
21:46 [Valerie Hickey] Each country is different.
21:48 All need to address the climate crisis.
21:51 How can we help piece together the right investments
21:54 that can help countries meet both climate and development objectives?
22:00 Climate finance is increasing, but not fast enough.
22:04 Over the next decade, we need to mobilize trillions of dollars
22:07 to give people access to resilient and reliable water,
22:10 food, clean energy, mobility, health and education,
22:14 and protection from disasters.
22:17 [WHAT WILL IT TAKE?]
22:18 First, spend smartly.
22:21 Rethink inefficient subsidies and price carbon.
22:24 Enforce construction standards, green supply chains
22:28 and improve procurement,
22:30 and systematically screen for climate risk so that infrastructure is more resilient
22:34 and cheaper to build and maintain.
22:38 Next, get private capital flowing.
22:41 Better data and national plans can help investors invest with confidence
22:45 and ensure public and private resources complement each other.
22:49 In some sectors, like clean energy or electric vehicles,
22:52 the solutions are already here and largely competitive.
22:55 Private investors can speed up their adoption
22:58 so that scarce resources go to research and development
23:00 in less mature areas, like improving battery storage
23:03 and supporting more vulnerable communities.
23:06 In sectors like adaptation,
23:08 [Valerie Hickey, Climate Change, World Bank] private investment is lagging,
23:10 so we need new instruments and business models
23:13 to mobilize private capital to go where it's needed
23:16 and reduce risks for investors.
23:18 [CATALYZE]
23:19 Multilateral development banks like the World Bank Group
23:22 have a key role to play.
23:24 We act as a bridge between governments and private investors,
23:27 using public finance to catalyze private capital.
23:30 This is vital for developing countries
23:32 where investment needs and climate risks are highest.
23:37 Climate finance can also help carbon markets
23:39 to monetize emissions reductions,
23:41 as well as more dedicated climate finance,
23:44 including the 100 billion pledged
23:46 under the Paris Agreement and concessional finance.
23:50 Piece by piece,
23:52 we can build the green, inclusive and resilient economies of the future.
23:57 [WORLD BANK GROUP] [Climate Change]
24:02 [PHNOM PENH, CAMBODIA] [Phyram] Hello, I'm Phyram in Phnom Penh, Cambodia,
24:05 and you're watching the World Bank Group-IMF Spring Meetings.
24:12 [Meriem Gray] As you just saw,
24:13 financing climate action is about investing trillions of dollars.
24:17 Let's find out a bit more about
24:20 how the private sector is going to play a key role in driving this forward.
24:25 Makhtar Diop is the Managing Director of the International Finance Corporation,
24:29 that is the private sector arm of the World Bank Group.
24:32 He's going to lead our next discussion
24:35 on the role of private capital in supporting client action.
24:39 His first guest is Rania Al-Mashat, Egypt's Minister for International Cooperation.
24:45 Egypt will be hosting COP27 later this year,
24:48 and climate finance will be a critical issue.
24:52 He will then drill down into
24:53 how to mobilize private capital and accelerate financing
24:57 with Rhian-Mari Thomas, Chief Executive of the Green Finance Institute,
25:03 and Yves Perrier, Chairman of the Board of Amundi,
25:07 one of the world's leading asset management companies.
25:12 [Makhtar Diop] Thank you, Meriem.
25:13 It's great to be able today to discuss about climate change.
25:17 We know that there are many solutions to help really in fighting climate change.
25:24 The money is not what is missing.
25:26 Actually, I was recently talking to some people
25:29 and I was explaining how much money
25:31 there was in the capital market for that effort.
25:33 We need to mobilize that money to find solutions, to find projects
25:37 which are very useful for our private sector to invest
25:40 both in adaptation and mitigation.
25:42 We will hear all that from our panelists.
25:45 I'm here to start first with Rania Al-Mashat,
25:49 Minister of International Cooperation of Egypt.
25:53 Madame Minister Rania, it's a pleasure to have you today
25:56 and thank you for joining us.
25:58 We know that COP27 will be held in Africa, right in Egypt.
26:04 You have a very big ambition for this COP27.
26:07 Can you tell us quickly what you have in mind?
26:10 [Rania Al-Mashat] Thank you. A timely conversation on climate.
26:15 Egypt's presidency is focusing on three main messages.
26:20 First, our impartiality, even though we are an African nation,
26:23 but this is a COP for the world, so we're trying to maintain that.
26:27 Second, as you correctly mentioned, adaptability, adaptation, and resilience
26:32 are extremely important for many developing countries.
26:35 The latest crisis we're seeing in Ukraine,
26:38 Russia has brought to the forefront again
26:40 the importance of food security and everything that is related to that.
26:44 And then third, it's going to be what we hope is an implementation COP.
26:49 So how can we move from the pledges to implementation and to action?
26:52 Those are the three key messages out of Egypt
26:56 and hopefully to be materialized next November in Sharm el-Sheikh.
27:02 Madame Minister, as you said, there were a lot of pledges in COP26.
27:06 Now we want to see execution.
27:09 I know that energy transition is very high on our agenda.
27:13 Water security is another important part of your agenda,
27:17 but also everything related to adaptation,
27:19 which is sometimes a bit overlooked in the conversation.
27:23 Tell us a little bit what the private sector can do to support all these priorities.
27:28 [WASHINGTON, DC, USA] [CAIRO, EGYPT]
27:29 [Rania Al-Mashat] Let me first acknowledge
27:31 IFC's important role in mobilizing private sector
27:35 and pushing private sector investments in countries.
27:38 COP aside, the work that is being done
27:42 to actually engage private sector is important.
27:46 In our case, the energy transition started several years ago.
27:51 When we take a look at the integrated sustainable energy strategy
27:57 that had clear KPIs for renewable energy in the country,
28:02 the government did structural reforms which were very important
28:06 to be able to crowd in private sector investments.
28:09 That is when the IFC and many other institutions
28:12 were able to bring in their investments to support the energy transition.
28:18 This has brought together a successful project, the Benban project,
28:22 one of the biggest solar plants in the region.
28:25 These are examples that can be replicated in other countries, as well.
28:30 They show how different stakeholders can come together.
28:34 Governments have a role to play in terms of regulatory and legislative reforms,
28:38 the private sector's willingness, but also the IFIs,
28:42 whether in terms of financing or technical capacity.
28:46 These are examples that can be replicated.
28:50 In our case, Egypt has finished its 2050 climate strategy,
28:56 and as you correctly point out,
28:58 it includes the plans to move to our NDCs by 2050,
29:06 across different sectors, with agriculture, transportation,
29:10 and many others.
29:11 The idea of the 2050 climate strategy
29:17 is that it is not divorced from development.
29:19 That's why also with the World Bank Group,
29:21 we are one of the pilot countries with the CCDR,
29:25 the Country Climate Development Report,
29:28 because we cannot think about climate
29:31 as separate from the development process of the country.
29:35 That's why there's a lot of integration
29:38 between the different sectors and the different targets.
29:41 Maybe let me just conclude by saying that
29:43 given that official development assistance is extremely important for different countries,
29:48 in our case, the portfolio is quite sizable.
29:51 We're talking about $26 billion dollars.
29:54 Given the importance of SDGs in the country's agenda,
29:58 we mapped the official development assistance to the SDGs.
30:02 If we look at the SDG number 13 related to climate action,
30:05 we find that there's 12 billion dollars dedicated to that,
30:08 2.8 to adaptation, 7.8 to mitigation.
30:12 You can see the imbalance, and I think in the period ahead
30:16 what we want to do is to try and push further the adaptation agenda.
30:21 [Mahktar Diop] That is great.
30:24 You talked about regulation.
30:25 You talked about things that need to be done.
30:28 One of the things that we're hearing from the private sector
30:32 is the green taxonomy.
30:33 People want to know when they invest to support a fight against climate change
30:39 that is really targeted to activities which are related to that.
30:43 What is your view about green taxonomy?
30:47 [Rania Al-Mashat] I think it's absolutely correct.
30:50 The climate conversation is a multi-stakeholder conversation.
30:55 It includes governments, private sector citizens,
30:58 as well as the international community.
31:00 That's why it's very important from the government side
31:04 to have a clear vision to communicate it.
31:06 If there are any legislative impediments
31:09 for private sector engagement, try and address those.
31:12 Also very important are the innovative types of financing.
31:17 One of the achievements of Glasgow was that
31:21 the private sector's engagement was very high on the agenda.
31:24 We saw lots of commitments from private sector entities.
31:29 The point is now, how can we take these pledges into implementation?
31:33 That requires all of us working together
31:36 to be able to create derisking opportunities for the private sector
31:40 through innovative tools, blended tools, and so forth.
31:44 There is a wealth of experience at the IFC, at the EBRD,
31:47 other institutions that have actually showcased projects,
31:52 whether mitigation or adaptation,
31:54 in emerging markets and middle-income countries.
31:56 These are examples that we want to be able also to showcase and replicate.
32:02 It also addresses the green taxonomy that you just mentioned
32:06 because it gives comfort or confidence that
32:11 whatever target set by the government and the private sector is able to come in,
32:15 that is also achievable.
32:19 [Makhtar Diop] Now, thank you very much.
32:21 If I can summarize a little bit of the conversation,
32:24 tell me if I get it right.
32:26 You said that you need a clear regulation.
32:28 We need taxonomy.
32:30 We need to have projects which are bankable.
32:33 We need to create an environment where people are investing
32:36 in adaptation as much as they invested in mitigation.
32:39 I hope that the IFC will be your preferred partner
32:44 in making it happen during the COP27.
32:47 Do I get it right?
32:48 [Rania Al-Mashat] Yes, I think, Makhtar, you summarize it very nicely.
32:52 I would just conclude by saying that
32:54 all stakeholders have a role to play, and there is complementarity.
32:58 The government needs to be clear and needs to be committed
33:01 through taking very important reforms in its own right.
33:07 The private sector needs to also show its commitment
33:12 and then the international community or the multilateral development banks,
33:15 and of course, IFC being a key partner
33:18 on private sector engagement also play a role.
33:21 I think it's complementarity among all stakeholders.
33:26 I believe that all of us are very much committed
33:29 and climate is very high on everybody's agenda.
33:32 [Makhtar Diop] Thank you very much, Madam Minister.
33:33 It was a pleasure talking to you.
33:35 A lot of food for thought.
33:37 You raised a lot of points.
33:38 Adaptation, mitigation.
33:40 The need to balance investment in all sectors.
33:43 The need to bring some blended finance to their risk investment.
33:46 Let's now turn to two people who are actively involved
33:50 in mobilizing resources to fight climate change.
33:53 We have Yves Perrier, the Chairman of Amundi,
33:57 a large long-term partner of IFC,
34:00 which is also the largest asset manager in Europe.
34:05 I'm also joined by Rhian-Mari Thomas,
34:08 who is the CEO of the Green Financing Institute,
34:12 which is a think tank working on climate change related issues.
34:16 Both of them will tell us a bit more about their experience
34:20 in mobilizing resources to finance the fight against climate change.
34:25 Yves, bonjour, because we are in Paris.
34:28 Let's start and have that conversation.
34:30 Amundi has a tremendous experience in mobilizing resources.
34:35 We've been working with you at IFC for many years.
34:38 Really, when you are looking at people very experienced in the market,
34:42 we are looking at you.
34:43 What can you share from your experience with people who are listening to us today?
34:50 [Yves Perrier] Thank you, Makhtar.
34:52 Let me start by thanking you for the stronger relationship
34:58 that we built between Amundi and IFC.
35:04 Especially we were very pleased
35:09 and very committed to create together.
35:14 The Amundi Planet EGO Fund,
35:18 which brings together public sectors and private investors.
35:24 This kind of initiative was part of a global policy.
35:31 We had equivalent initiative in Asia
35:36 with the Asian Investment Infrastructure Bank
35:40 in Europe with the EIB, and also in France with Caisse des Dépôts.
35:49 There are two main lessons
35:53 we withdraw from this experience.
35:57 The first is to be able to understand this objective
36:02 of development financial institution as well as the public sectors
36:10 and also the capacity to align them
36:13 with the needs of individual investors in their investment guidelines.
36:21 The second lesson is to share experience.
36:25 With this partnership, we have built a unique experience and basis of knowledge.
36:32 We made this knowledge public and available to everyone.
36:38 [Makhtar Diop] Thank you so much, Yves.
36:39 Rhian, it was a nice sharing a panel with you in Glasgow.
36:44 We talked about a lot about capital mobilization
36:48 and I just came from Colombia where we launched the first green taxonomy.
36:52 I know that you're working on a lot of things which are of that nature
36:56 to give more confidence in the private sector to invest.
36:58 Tell us a little bit more about what you're doing.
37:01 [Rhian-Mari Thomas] Sure. Greetings from London and thanks so much,
37:04 Makhtar, for inviting me onto the panel today.
37:07 One of the things that we discussed in Glasgow
37:10 was this point about the right kind of capital
37:12 into the right kind of climate investment opportunities
37:15 and that should be the tagline for financing
37:18 the whole of the zero-carbon transition.
37:20 I think it really perfectly captures
37:22 the task at hand which is about creating the opportunities for finance providers
37:27 to fund the transition in a way that meets their risk adjusted returns hurdles,
37:32 removing the barriers so that capital can flow.
37:35 Those barriers can take many forms,
37:38 but as we're talking about risk and rewards
37:40 let's focus on possible solutions to removing financial barrier.
37:44 You've kindly invited me to give an example
37:46 of the work that we've been doing.
37:48 I'd love to share an anecdote about the work that we've been doing
37:51 in South Africa with the South African banks and the investors.
37:55 The banks there are facing a specific barrier,
37:57 which is the deep pools of pension capital in South Africa need to invest
38:02 in investment grade securities, such as government bonds,
38:06 and so that often exempts them from investing in much needed energy waste,
38:10 and water infrastructure in response to climate change.
38:13 By providing a derisking facility that would partially guarantee
38:18 the debt needed to fund those transactions,
38:21 the banks would be able to provide finance at competitive rates
38:25 and tenors, confident that they could then syndicate that
38:28 to local domestic pension and institutional funds.
38:32 We've developed a novel Green Finance Guarantee Fund
38:35 with partners in the UK and in South Africa that can provide that derisking.
38:40 Also importantly, we structured that fund so that it would include
38:44 government funding, development bank funding,
38:47 and private capital, all deployed together so that each type of finance provider
38:52 receives the returns they're seeking in line with their mandate.
38:57 A key aspect of this anecdote that might surprise some of our viewers is that
39:01 in the course of developing this fund, we uncovered over a billion pounds worth
39:06 of climate smart infrastructure projects that the banks would consider funding
39:10 if only they had the benefit of this guaranteed solution.
39:14 Just finally, the reason I'm particularly excited about this project
39:17 is whilst South Africa is the perfect jurisdiction
39:20 for a proof of concept such as this,
39:22 it's an entirely replicable solution in other countries.
39:26 If we can identify the situations
39:29 where with some derisking, we can crowd in private capital,
39:33 we're not only leveraging scarce government balance sheets
39:36 in those transactions, but also freeing up government development capital
39:41 for those situations where it's more challenging
39:43 to create a commercial case.
39:45 For example, to fund certain adaptation measures.
39:49 That's a whole other topic for us to discuss.
39:52 [Makhtar Diop] Thank you very much, Rhian.
39:55 It's very interesting when you come back to the emerging economies
39:57 and the role they can play in mobilizing resources
40:01 because most of the resources are so far mobilized from more advanced economies.
40:07 Let me turn now to Perrier before coming back to you
40:10 and ask a question about platforms.
40:13 I know that people want to reduce the transaction costs
40:16 so they don't want to repeat all the work done for a transaction.
40:21 They just want to have a standard term sheet.
40:24 Tell us a little bit what you think about innovative platforms
40:28 and the role they can play in mobilizing more resources.
40:32 [Yves Perrier] What is very positive is that in the recent period,
40:39 in the last three or five years, there has been a commitment
40:44 of the whole financing industry
40:48 towards this question of climate.
40:52 One very important point for this question is to consider that
40:59 it's an industrial revolution at the level of the planet.
41:04 We need to change the energy supply going from 80% fossil fuels,
41:11 which is the situation, to nearly 0%,
41:16 but also to change the product,
41:18 to change the way we manufacture the products, the chain of value.
41:23 To be successful, this revolution will need
41:31 a strong alignment of public policy and private investors, and of corporate.
41:43 It has to be done integrating
41:47 the question of security of supply
41:51 and the present context recalls this importance.
41:56 Also the question of relative competitiveness
42:00 and social impact, which will be very important.
42:06 I think that should emphasize on the coherence on all the criteria,
42:15 of course, the impact on climate, but also social impact.
42:21 That's the reason why we are very happy to have been selected by IFC
42:27 for the management and fundraising of the SEED Program.
42:34 This is consistent with what has been always the policy of Amundi,
42:40 which is to have a holistic view of this question of responsible investment
42:49 since the creation of the company 10 years ago.
42:52 [Makhtar Diop] Thank you very much and you raised a lot of points
42:57 which are actually connected to the point that Rhian-Mari mentioned.
43:03 You said something quite interesting earlier, Rhian.
43:05 You insisted on what needs to be done in emerging economies.
43:10 You gave an example, you talked about South Africa,
43:14 I'm sure that you have some other countries in mind.
43:17 What will it take today if we want to mobilize more resources
43:20 from emerging economies?
43:23 Especially, I think there will be a lot of sensitivity
43:26 to what Yves has just said about social bonds,
43:30 linking environment with social inclusion.
43:34 Tell me, what do you think about that?
43:36 [Rhian-Mari Thomas] I'd be happy to. I think as a broad comment,
43:40 I'd say this is really a challenge of leadership and collaboration,
43:45 and it's across all economies as Yves just said,
43:47 not only emerging markets.
43:49 Whilst I mentioned earlier, a financial mechanism that channels
43:53 governments' capital efficiently alongside development and private capital
43:58 in order to create lending and investment opportunities
44:02 for local banks and investors.
44:04 We can't solve for a one and a half degree aligned world
44:07 purely through financial instruments.
44:10 We clearly need that enabling policy and regulatory frameworks in country,
44:15 as well as the mechanisms to improve credit worthiness,
44:18 so that we can secure both local and international funds.
44:22 As implied in your question that they need to be led in country
44:27 by those who have a really detailed understanding of local conditions.
44:31 That's where organizations like the IFC,
44:33 you've got 16 years of experience financing opportunities
44:36 in emerging markets and developing economies,
44:39 you have such an important role in continuing to familiarize
44:43 both local and international mainstream finance institutions
44:47 with the opportunity for commercial investment
44:50 and helping overcome perceptions of risk.
44:53 For example, very practically pointing at your historic default rates.
44:58 Our research has also identified green banks as highly efficient vehicles
45:04 in country to channel domestic capital,
45:07 both public and private capital, towards climate smart projects.
45:11 I guess finally,
45:13 there are no intellectually coherent high carbon pathways to prosperity.
45:18 The science and the recent IPCC report have been very clear on this.
45:23 Building these collaborative initiatives and these institutions
45:28 that involve policymakers, industry experts and financiers
45:33 is absolutely key.
45:35 [Makhtar Diop] It's very interesting to hear this
45:39 coming from someone scientifically trained as you.
45:42 A lot of people don't know it, but you are scientist by training.
45:46 Saying that it's not an exact science,
45:48 but you need to put together institutions so that people can work and create
45:51 this social contract to mobilize everybody around the targets.
45:56 You have also said something quite interesting.
45:59 We need to derisk.
46:02 We need to have partnership,
46:04 public and private need to work together.
46:06 There is something I haven't heard a lot about
46:08 which seems to be coming more into conversation:
46:11 maybe more investment in efficiency.
46:14 You're talking about fighting climate change
46:16 by reducing emissions.
46:18 Hearing people going to COP27,
46:22 I increasingly hear people talking about reducing the waste in networks,
46:27 in electricity networks, reducing the leakages in water pipes,
46:32 reducing all these inefficiencies that we have.
46:36 What is your take on that, Rhian?
46:38 [Rhian-Mari Thomas] I fully agree with you.
46:39 Here at the Green Finance Institute, one of our flagship projects
46:43 has been looking at the efficient energy efficiency of buildings,
46:47 which here in the UK, our building stock accounts
46:50 for about a quarter of our emissions.
46:52 This is clearly a topic that really resonates with consumers,
46:58 it resonates with the electorate,
47:00 but finding ways of financing that upfront capital expenditure
47:05 that then enables people to have lower energy bills.
47:09 The same analogy in industry where you invest the CAPEX up front
47:14 in order to have the lower operating expenditure ongoing.
47:18 These are real challenges that again, needs financiers to be working closely
47:24 with regulators, policy makers in order to actually accelerate all of this.
47:30 I couldn't agree more with your emphasis on
47:32 this is about both supply and demand,
47:34 it's about efficiency,
47:36 it's about using resources well and efficiently,
47:40 as well as looking at our sources of demand
47:42 and having more reliance on renewable energies
47:46 and climate smart infra.
47:49 [Makhtar Diop] Thank you so much.
47:50 Yves, I know that in France, it is a government priority to reduce,
47:56 to improve efficiency in households, in houses, in heating systems.
48:01 Do you see a platform being built around that
48:05 to be able to mobilize the resources to fight climate change?
48:09 [Yves Perrier] Efficiency is the main challenge,
48:14 and it's a main challenge because we have to be realistic.
48:20 We need a lot of time to transform the economy, to change the energy.
48:28 When I look at the ten years to come,
48:32 I think that the way to reduce emission,
48:37 the most efficient way, is through energy efficiency.
48:42 It needs to align corporates
48:50 and the financial sector to finance this.
48:56 In Amundi, we have built a joint venture,
48:59 for example, with EDF, a public energy utility of France,
49:06 in order to finance this energy efficiency investment.
49:15 We can imagine also to issue bonds
49:21 with index about this where we share
49:26 the value of the reduction
49:31 of the consumption of electricity, of energy
49:36 between the utility, the consumers and the investors.
49:44 [Makhtar Diop] Sounds great.
49:45 I look forward to seeing both of you face to face,
49:48 I hope this time in Paris and London and pursue that conversation
49:52 and I would love to be able to organize something during COP27
49:58 where we can have that conversation and bring investors face to face
50:02 with the capital market to be able to,
50:05 to do more of what you're already doing.
50:08 Thank you so very much for joining us.
50:10 It was a pleasure having you in this panel.
50:12 Thank you so much.
50:14 - [Rhian-Mari Thomas] Thank you. - [Yves Pierrer] A pleasure. Thank you. Goodbye.
50:19 [NEW DELHI, INDIA] [Shilpa] Namaste.
50:20 I'm Shilpa in New Delhi and you're watching
50:23 the World Bank Group-IMF Spring Meetings.
50:30 [Meriem Gray] Thank you to Makhar Diop and his guests
50:33 for this insightful conversation.
50:35 Next, we will be joined by Mari Pangestu, Managing Director of Development Policy
50:40 and Partnerships at the World Bank and her guest,
50:43 Lord Nicholas Stern, IG Patel Professor of Economics and Government
50:48 at London School of Economics.
50:51 This forward-looking conversation will focus on
50:54 how to make climate finance tangible and action oriented.
51:00 [Mari Pangestu] We just heard a discussion about the challenges
51:03 around climate and development
51:05 from how we can integrate climate and development.
51:07 In the case of just energy transition,
51:10 how can we have just an affordable energy transition
51:13 at the same time phase out coal
51:15 and of course, the big challenge of financing the scale
51:18 of transformative investments that's needed for developing countries.
51:22 In this discussion, we want to take a little bit of a forward look.
51:25 I'm joined by my good friend Lord Nick Stern,
51:28 who is also serving with me and the IMF
51:34 on the High-Level Advisory Group
51:39 on Sustainable and Inclusive Recovery and Growth.
51:42 And, of course, he is a well-known climate and development expert.
51:45 So, Nick, if I can just start our discussion today
51:48 by asking you a very big question which is around climate and development.
51:54 We know the IPCC report has once again raised the urgency of the climate crisis,
51:59 but developing countries are facing development challenges
52:03 accentuated by COVID-19 and now with the Ukraine war.
52:06 How can we really integrate climate and development
52:09 and how can we really scale up the financing that's needed?
52:13 [WASHINGTON, DC, USA] [WEST SUSSEX, UK]
52:14 [Lord Nicholas Stern] Thank you, Mari, very much for your leadership.
52:18 The IPCC report is clear and strong.
52:21 Each one that comes through is more worrying than the one that came before
52:25 as the evidence accumulates and accumulates.
52:28 We're headed for something closer to three degrees than two degrees.
52:32 We haven't been at three degrees for three million years.
52:35 The sea levels would be 10 to 20 meters higher,
52:39 threatening our coastal cities and habitations
52:43 in a very deep and difficult way.
52:46 We would risk extreme events which would, together with those long onset stories,
52:53 would push hundreds of millions, perhaps billions to move.
52:57 Let's be very clear about the scale of the risks
52:59 and that we have to act very quickly and strongly
53:02 starting now, in this decade,
53:04 if we are to be able to handle those risks in a way that could be acceptable.
53:10 Poor people, of course, are hit earliest and hardest.
53:13 So what do we have to do?
53:14 Well, we have to invest strongly in doing things differently.
53:18 What things? Particularly the energy sector.
53:21 We have to put in place a big transition, and we have to do it now.
53:25 Of course, exiting coal, moving away from coal,
53:29 absolutely core part of that, it's the lowest hanging fruit.
53:33 That will involve a great deal of investment
53:35 but we're going to have to adapt also as we do this,
53:38 and we're going to have to invest in our natural capital as well.
53:42 Fortunately, if we put all those things together,
53:45 the investment in emissions reductions and the new energy story,
53:49 if we adapt, if we invest in our natural capital,
53:53 we have a new model of development much more attractive
53:57 than the dirty, destructive one that went before.
54:00 We have cities where we can move and breathe,
54:03 much more efficient use of all our resources
54:05 ecosystems which are robust and fruitful.
54:07 It's a new model of development and it's in our hands,
54:10 but we have to invest to get there.
54:12 How much?
54:13 Well, in emerging markets and developing economies,
54:16 perhaps 1.5 to 2 trillion dollars a year extra by 2030,
54:21 perfectly possible from the point of view of world macro
54:24 and past historical rates of investment.
54:28 But a major increase in investment,
54:31 that 1.5 to 2 trillion dollars a year in 2030 or by 2030
54:39 would have to be financed domestically and internationally,
54:44 perhaps internationally,
54:45 something close to a trillion dollars a year extra.
54:49 Big majority private sector,
54:51 but that will be enabled by public sector resources which come,
54:56 or financial resources which come with it and combine together.
55:00 We have to reduce, share, manage risk in a way that allows the private sector
55:05 to come in and brings down the cost of capital.
55:08 Clearly, the MDB's have a crucial role.
55:11 So also the bilaterals with their concessional finance
55:14 and of course, philanthropy, which although would be smaller in scale,
55:18 can reach the parts that others can't reach.
55:20 There the just transition and investing
55:23 in people and places who were intensive in fossil fuels,
55:26 that can play an important part as well as could voluntary carbon markets.
55:32 [Mari Pangestu] Thanks for that very sobering but realistic picture,
55:36 but also identifying the opportunities.
55:38 Another realism that we are facing today is, of course, the Ukraine war,
55:43 its impact on high energy prices
55:46 and increased concerns around energy security.
55:49 You identified energy transition
55:52 as one of the really urgent areas that we have to discuss.
55:56 When you see the drivers that are happening now,
55:59 how do you see us moving forward
56:02 if we want to still continue to accelerate energy transition?
56:08 [Lord Nicholas Stern] Energy security is very important,
56:11 and we've seen it in the past in the crises of the 1970s
56:16 and the right thing to do is to move away faster and harder from fossil fuels
56:21 and to increase strongly energy efficiency.
56:25 Actually, now our options for moving harder and faster away from fossil fuels
56:31 are much bigger than they were in the 1970s,
56:34 because renewables and storage have proceeded so strongly.
56:37 So that's the strategy.
56:39 The implementation of the strategy means, of course, recasting energy supply.
56:46 It means much bigger capacity for electricity
56:51 because so much of this story is going to be around electricity
56:55 in terms of, of course, power itself,
56:57 in terms of transportation, in terms of heating homes and so on.
57:02 We have to invest on the supply side and we have to encourage the demand side,
57:07 so it moves towards electrification
57:10 and, of course, much greater energy efficiency.
57:13 That's the delivery challenge.
57:15 How do we get that to move?
57:17 The right kind of policies have to be put in place,
57:20 including abolition of fossil fuel subsidies,
57:22 the advancement of carbon pricing
57:24 but clarity on time scales for decentralization of the grid,
57:28 and on time scales for stopping the sale
57:31 of the internal combustion engine vehicles and so on.
57:35 Making sure that the sense of direction is clear in those ways,
57:39 but also enabling, in a much more efficient way,
57:43 the solution of problems and difficulties inevitably arise as we move into delivery.
57:49 Of course, reforming domestic financial systems
57:52 and getting the flows of finance right, as I described just now.
57:56 That's the essence of what we call the country platform approach.
58:00 And through its climate change development reviews,
58:03 I do believe that the World Bank is moving in a positive way in that direction.
58:10 [Mari Pangestu] Thanks, Nick.
58:12 I think the reality is we may still see a little bit of a slowdown,
58:16 but at the same time, we hope that accelerating energy transition
58:21 is actually part of energy security, as you emphasize,
58:25 really a complimentary part of energy security.
58:28 Now let's take a more forward look.
58:31 We are heading now into the COP27.
58:35 It just happens the chair this year is Egypt, which is a developing country.
58:40 It's really a really good opportunity
58:42 to look at how can we really deliver on climate and development.
58:47 As we heard from Minister Rania earlier, they are focusing on implementation
58:52 as well as on adaptation and resilience.
58:56 The big question out there, which is the financing.
58:59 I was in Egypt recently and I was very encouraged to see
59:04 the commitment of the Egyptian government on the climate agenda
59:07 and their preparations for the COP27.
59:10 If I can ask you to take a kind of a forward look and see
59:14 what are some of the ideas that we can take forward to help
59:17 think through the delivery on implementation and the actions
59:22 that can really integrate the climate and development agenda
59:27 and then deliver on it, especially the financing side.
59:30 If you could say a little bit more about the role of the private sector
59:35 that would really also be really helpful.
59:38 [Lord Nicholas Stern] Thank you very much, Mari.
59:41 We're looking forward very much to the leadership in COP27 of Egypt.
59:46 They really are, as you know, from your visit, Mari,
59:48 putting in place what's necessary, emphasizing that this is a delivery COP.
59:53 COP26 was very good in setting a roadmap, setting the targets,
59:57 the private sector involvement, the commitment to net zero,
01:00:00 the rising place of adaptation, natural capital and so on.
01:00:07 But COP27 is the delivery COP,
01:00:09 and that is very clear with our Egyptian friends and in their leadership.
01:00:13 And of course, it's an African COP.
01:00:16 In the priorities that we see on that delivery,
01:00:19 surely the energy transition is very clearly there
01:00:23 as one of the key priorities.
01:00:25 Adaptation and resilience,
01:00:27 we've seen how devastating climate change can be already with us,
01:00:31 and it's going to get more difficult.
01:00:33 So adaptation and resilience would be a second important priority,
01:00:38 integrating, adaptation, resilience with emissions reductions as we can,
01:00:43 through decentralized solar, through public transport,
01:00:46 through mangroves and so on.
01:00:49 We can put mitigation adaptation development together and we must
01:00:53 And of course, finance.
01:00:55 I've already indicated the scale of finance that we need.
01:00:58 It's going to be critical to advance of commitment, advance of ambition.
01:01:04 In that finance story, the private finance is going to be at center stage.
01:01:12 But it will require reduction of risk, sharing of risk, management of risk.
01:01:18 And in that story then, the combination with the bilaterals
01:01:24 and the concessional money they can bring, the MDB with the lower cost of capital
01:01:28 and the skills they can bring in the management of risk
01:01:30 are going to be enormously important,
01:01:32 as will the philanthropy and the voluntary carbon markets.
01:01:35 Second part of delivery is getting behind those countries which are already making
01:01:41 strong moves and putting their country platforms in place.
01:01:44 I think particularly of South Africa, which has worked so hard
01:01:48 to get a clear plan for transforming the economy in place.
01:01:52 But other countries too.
01:01:53 Indonesia, India and Vietnam are all moving very strongly.
01:01:58 So countries that are coming forward, those are just examples.
01:02:00 Other countries that are coming forward,
01:02:02 we have to get behind them in the delivery story
01:02:05 to show in those specific cases
01:02:07 that the world is ready to get behind their investments.
01:02:11 That means a combination of public sector and private sector
01:02:16 in the management sharing and a reduction of risk
01:02:19 that will be critical to bringing down the cost of capital.
01:02:25 [Mari Pangestu] Thanks, Nick.
01:02:26 I think my two takeaways from that is getting behind countries
01:02:31 and supporting them to come up with
01:02:33 the enabling environment for funding to come in
01:02:36 and the climate change and development reports that we are preparing.
01:02:40 This is going to be part of the support we're giving.
01:02:43 You heard Minister Rania mentioned that specifically in the case of Egypt.
01:02:47 Then second, how do we have different sources of funding,
01:02:52 public and most importantly private,
01:02:54 because a large amount of funding is going to have to come from private sector.
01:02:57 I think this is our collective homework.
01:03:01 The international community as well as working with countries
01:03:04 because it has to be country led and country owned
01:03:07 to really put together the financing that's needed,
01:03:11 whether it's the energy transition or the adaptation and resilience.
01:03:15 So thanks again, Nick.
01:03:18 The process is going to continue and we look forward
01:03:21 to continued conversations with you and our work with the HLAG.
01:03:26 Let me thank you, everybody.
01:03:28 Also now give it back to Meriem.
01:03:32 [Meriem Gray] People have been sharing their thoughts
01:03:35 on this event online and on social media.
01:03:38 I'm now joined by my friend and colleague Sri Sridhar,
01:03:42 who has been following this conversation throughout.
01:03:45 [Srimathi Sridhar, Communications Officer, World Bank Group]
01:03:46 Sri, tell us what stood out for you.
01:03:47 [Sri Sridhar] Thanks Meriem and great to see you.
01:03:49 We have people joining us from all over the world today again,
01:03:52 including India, Nigeria, Kenya, Venezuela, Spain,
01:03:57 the United Kingdom, France, Saudi Arabia, Indonesia, and also the United States.
01:04:02 They're, of course,
01:04:03 using the hashtag for today's event, which is #Finance4Climate.
01:04:07 They're joining us on Twitter, Facebook, LinkedIn, as well as Instagram.
01:04:11 They're talking about the need for climate action
01:04:14 and how the private sector and green investments are needed
01:04:17 to make communities more resilient to climate change.
01:04:20 Why don't we take a look at some comments
01:04:22 that have been coming in on our social channels.
01:04:24 First, on Twitter, we've got Wambi Peter from Uganda
01:04:27 saying that "a sustainable future requires large scale,
01:04:31 low-carbon investments that can help communities build long-lasting resilience."
01:04:36 We next have a comment coming up
01:04:38 on LinkedIn from Tomi, who says that "getting to net-zero
01:04:42 will not be easy or without cost
01:04:44 and will need to go hand in hand with other objectives,
01:04:47 like economic development and increasing energy access."
01:04:52 Finally, a comment coming in on our Facebook channel
01:04:56 from Tamba in Sierra Leone, who says that "a huge amount of money
01:04:59 can enable change but until we learn
01:05:01 to control our activities to avoid environmental degradation,
01:05:05 this issue can and will always call for more funds."
01:05:09 It's really great to see this engagement coming in on our channels.
01:05:12 [Meriem Gray] Great. Thank you.
01:05:13 I think this is where the drum roll should come in.
01:05:17 I understand you have the results of our quiz.
01:05:21 [Sri Sridhar] Yes. We have a quiz today which asks
01:05:24 how much investment is needed each year to limit global warming, boost resilience,
01:05:29 and support global transition to net zero emissions?
01:05:33 Our four options here are A, is it about 10 billion dollars a year,
01:05:37 B, about 100 billion dollars a year,
01:05:40 C, about a trillion dollars a year, or D, is it more than that?
01:05:44 Is it more than 2 trillion a year?
01:05:46 There is a right or wrong answer.
01:05:48 Before we get to that, Meriem, what do you think the answer is?
01:05:52 [Meriem Gray] I was going to go with C, about 1 trillion dollars a year.
01:05:57 [Sri Sridhar] Okay. Well, shall we see what the results are?
01:06:00 Just to know, we had nearly 2000 people take part in today's quiz.
01:06:04 You'll see here, 11% think that it's about 10 billion dollars a year,
01:06:08 29% think about 100 billion dollars a year,
01:06:12 28% about a trillion dollars a year,
01:06:15 and finally, most people think, with 32%,
01:06:17 that it's D, more than 2 trillion dollars a year.
01:06:20 And guess what, Meriem? They're right.
01:06:22 D is the right answer.
01:06:24 [Meriem Gray] The numbers really do add up.
01:06:27 Thank you so much, Sri. Thank you for joining us.
01:06:32 [ST. GALLEN, SWITZERLAND] [David] Hi. I'm David in Switzerland
01:06:34 and you're watching the World Bank Groups-IMF Spring Meetings.
01:06:42 [Meriem Gray] Auguste Kouame, Country Director for the World Bank in Turkey,
01:06:45 and Hania Dawood, Manager of the Climate Business Department at IFC,
01:06:50 have joined me here in the World Bank atrium.
01:06:53 In a moment, they will be answering some of the questions you've been asking.
01:06:59 But first, let's recap the main points we've heard in the past hour
01:07:03 on how we can finance effective climate action.
01:07:07 We have heard that addressing climate change and development together
01:07:12 is a complex exercise that needs to go
01:07:14 from high level commitment to real, tangible action.
01:07:19 For the low-carbon resilient transition, the world needs large-scale investments.
01:07:25 Financing this transition will require continue to create enabling environments,
01:07:30 leverage different pools of capital,
01:07:31 and ensure that affected communities have a voice.
01:07:35 Now let's hear from Auguste and Hania,
01:07:39 welcome, and thank you for joining us live.
01:07:41 My first question will be to both of you.
01:07:45 This is probably one of the most voted questions from the audience.
01:07:49 How can we institutionalize climate action?
01:07:54 Let's go to Auguste first.
01:07:55 [Auguste Kouame] Thank you, Meriem. Let me start by saying
01:07:58 that climate action and development are intertwined.
01:08:03 In fact, there is symbiosis and synergy between the two.
01:08:06 It makes full sense to institutionalize climate change
01:08:09 [Auguste Kouame, Turkey Country Director, World Bank]
01:08:11 when we talk about development.
01:08:13 We know that development without climate change action
01:08:17 can push up to 132 million people into poverty,
01:08:22 in addition to the several hundred millions of people
01:08:26 who are already poor today.
01:08:28 We also know that good climate action
01:08:30 can actually create development growth and poverty reduction.
01:08:35 At the country level, what does it mean to institutionalize?
01:08:38 What we think is that when governments are planning
01:08:42 their development and growth and the poverty reduction strategies,
01:08:45 climate change should be at the heart of it.
01:08:48 When they're planning actions across governments
01:08:51 they can look at it from the climate change angle
01:08:54 so that there is a whole of government approach.
01:08:57 There is an economy wide approach to climate change.
01:09:01 At the Bank level what we're trying to do is,
01:09:04 as you have seen, the new climate change action plan
01:09:09 put climate change at the heart of the Bank's work
01:09:12 at the same level as poverty reduction, inclusion and equity.
01:09:17 We're going beyond the project approach
01:09:20 to looking at climate in the country strategy as a program approach.
01:09:26 The Bank has also introduced the Country Climate Development Report,
01:09:33 the CCDR, which is a core diagnostic
01:09:37 that allows us to help to work with countries without us flying blind.
01:09:42 It gives us an understanding of the countries' climate change
01:09:47 and development issues in an integrated fashion.
01:09:51 We can help countries
01:09:53 not only implement good program, but also upgrade the NDCs.
01:09:59 The Nationally Determined Contributions help them prepare long-term strategies
01:10:04 to achieve net-zero, help countries boost their capacity
01:10:08 to be more resilient to climate change, make their population and their economies
01:10:14 more resilient, therefore support the adaptation agenda.
01:10:18 What it also means at a global level
01:10:21 is we know that no single country can address climate change alone.
01:10:25 It is everybody's business, it is every country's business.
01:10:28 There is also an opportunity here to institutionalize climate change
01:10:33 in international cooperation, in international development.
01:10:37 When countries are helping each other, when we are helping the world address
01:10:43 [LIVE: YOUR QUESTIONS ANSWERED] big issues such as COVID-19
01:10:46 or the impact of the war in Ukraine or high inflation today,
01:10:50 we do that with climate change at the heart of the action
01:10:54 so that we don't solve the problem
01:10:57 whilst creating another one for the future generations.
01:11:01 [Meriem Gray] Thank you, Auguste. Let me take it to Hania.
01:11:03 Hania, what does the private sector have to offer
01:11:07 and how can the private help to institutionalize climate action?
01:11:12 [Hania Dawood] Thank you, Meriem.
01:11:15 Climate change is a collective action problem on steroids
01:11:19 [Hania Dawood, Manager, CBG, Climate Strategy and Business Development, IFC]
01:11:21 and climate action is a global public good.
01:11:23 As Auguste said, governments and nations need to come together.
01:11:27 The private sector needs to act and we have a role as individuals to play.
01:11:32 I agree with everything that Auguste said.
01:11:35 I will add three more things.
01:11:37 One, what gets measured gets done.
01:11:41 Data about emissions is integral about the baseline of emissions
01:11:45 and about the trajectory of emissions.
01:11:48 This is important at the country level and at the company level.
01:11:53 Why is that? If we know which sectors and which sub-sectors
01:11:58 contribute most to climate change,
01:12:00 if we know what part of a company's value chain
01:12:04 is responsible for climate change, we can prioritize action
01:12:08 and we can concretely identify areas and where we need to channel money.
01:12:14 Secondly, commitments matter and what gets committed to, gets done.
01:12:19 We're seeing countries commit to ambitious NDCs,
01:12:23 the private sector at an unprecedented level
01:12:26 is committing to net-zero targets, which is extremely exciting,
01:12:31 and for us here at the World Bank,
01:12:33 we increased our commitment to 35%
01:12:36 of our entire commitment towards climate action,
01:12:41 and to also align with the Paris Agreement.
01:12:44 Now, commitments are great,
01:12:46 but what really matters is to operationalize these commitments
01:12:49 and to come up with concrete plans and move from rhetoric to action.
01:12:54 My third point is our votes matter.
01:12:58 It's really inspiring to see the youth engaged in this debate.
01:13:03 This holds policymakers and the private sector accountable.
01:13:08 Shareholders are also voting with their dollars
01:13:11 and are demanding that companies
01:13:13 and their investments do what's right for action.
01:13:16 What's great is that much of this is already in play and in progress.
01:13:21 What is really needed is to move from ambitious, from ambition to action
01:13:26 and to really start to operationalize and make concrete plans.
01:13:31 [Meriem Gray] Thank you. So our next question is from Eswatini.
01:13:35 Temba Twala has actually sent us a video. Let's take a listen.
01:13:40 [Temba Twala] Good day. My name is Temba Twala.
01:13:43 I'm from the Kingdom of Eswatini.
01:13:46 My question is, how can developing countries like Eswatini,
01:13:51 formerly known as Swaziland,
01:13:52 juggle between tackling immediate problems like abstract poverty and climate change?
01:13:58 How do we ensure that our efforts are actually effective and efficient
01:14:03 balancing between development and reducing climate change?
01:14:14 [Meriem Gray] A great question from Temba Twala. Let me repeat it.
01:14:19 How can countries balance climate action and development challenges?
01:14:23 Let's go to August first.
01:14:25 [Auguste Kouame] Thank you very much, Temba, for this question.
01:14:28 It is very clear that the poorest countries
01:14:31 are the most impacted by climate change,
01:14:34 and unfortunately, they contributed the least
01:14:37 to the causes of climate change today.
01:14:39 They contributed the least to CO2 emissions,
01:14:42 and within countries, the poorest are actually suffering the most.
01:14:47 However, countries, regardless of their level of development today,
01:14:52 do not have the option of addressing development
01:14:58 in a high-carbon intensity way and postponing actions that will increase
01:15:04 the adaptation or resilience to the impact of climate change.
01:15:09 It has to be done jointly.
01:15:12 The good news is that now the tension we used to see
01:15:18 between development and climate change is disappearing.
01:15:21 First, because the cost of adopting technologies
01:15:26 that are greener has gone down
01:15:29 and therefore, it is possible to actually find development solutions
01:15:36 that are affordable whilst being totally consistent with climate change.
01:15:42 Second, we have also learned that when countries take climate action
01:15:47 to increase their adaptation and their resilience,
01:15:49 this also creates growth, it creates poverty reduction.
01:15:53 It is very inclusive since we know
01:15:55 that the impact of lack of adaptation is worse for the poor.
01:15:59 When you invest in adaptation,
01:16:00 you're actually implementing inclusive and progressive policies
01:16:05 that benefit the poorest the most.
01:16:07 We also know that the international community
01:16:09 is now committed more to climate change and developing countries
01:16:13 receiving support financially from developed countries.
01:16:17 This financing, if packaged well together, can actually reorient
01:16:23 a lot of the development financing towards climate action.
01:16:27 Let me give you an example of how a country can take
01:16:31 one portion of development activity and transform it into a climate action,
01:16:36 both for mitigation and adaptation.
01:16:39 Take forestry in Turkey, the country where I work.
01:16:43 Forestry, we know is a carbon sink.
01:16:47 It helps the mitigation agenda, it helps absorb CO2 from the air.
01:16:52 When you invest in forestry, you're actually investing in mitigation.
01:16:55 You are also investing in adaptation
01:16:57 because forestry can help reduce landslides,
01:17:01 it can help retain soil, it can help make the poor less vulnerable.
01:17:05 By doing that, you're also doing development
01:17:08 because you're creating jobs in the forest sector.
01:17:11 You're creating opportunities for the rural sector.
01:17:15 You're also investing in food.
01:17:17 As we saw today, the impact of the war in Ukraine
01:17:21 can put a lot of pressure on prices because of a reduced supply of food.
01:17:27 So when you invest in forestry, you can also increase the potential
01:17:31 of the agriculture sector to help address this kind of food scarcity.
01:17:36 So just one example to show that poverty reduction,
01:17:40 development and growth are not contradictory.
01:17:44 It's not orthogonal to climate change.
01:17:46 In fact, the two go together.
01:17:48 Our advice is countries can think of climate action as development.
01:17:56 Doing climate action is doing development.
01:17:58 If you want to do poverty reduction, do it through climate action.
01:18:01 [Meriem Gray] Great. Thank you. My next question is for Hania.
01:18:06 How can private companies tackle both poverty and climate?
01:18:12 [Hania Dawood] Such an important question. because, as Auguste said,
01:18:19 the world's poorest countries are the most impacted by climate change
01:18:24 by form of hurricanes, flooding, but they contribute least to it.
01:18:30 At the same time, it's integral to integrate climate and development.
01:18:38 We need to continue to invest in economies and their private sectors
01:18:42 to continue to create jobs.
01:18:46 What is the role of the private sector?
01:18:48 It's to create jobs and it's to innovate.
01:18:51 The IEA estimates that 30 million jobs can be created by 2030
01:18:57 just as part of the energy transition.
01:18:59 Innovation.
01:19:00 The private sector needs to drive innovation.
01:19:03 It needs to drive innovation in, for example, climate-smart solutions
01:19:08 focusing on the agribusiness sectors that help farmers improve
01:19:12 their fertilization, their irrigation techniques.
01:19:17 The private sector can drive innovations and technologies that help
01:19:21 with better weather patterning and satellite imaging
01:19:26 so that information is disseminated quickly
01:19:29 to the world's poorest so that they can act faster.
01:19:33 Then lastly, the private sector can invest in natural capital,
01:19:38 which form the basis of ecosystems that also are integral to the poor.
01:19:45 [Meriem Grey] Thank you so much for joining us live today.
01:19:50 If you have any comments from the Spring Meetings,
01:19:53 you can share them using #ResilientFuture.
01:19:57 [#RESILIENTFUTURE]
01:19:58 Finally, as it is now a tradition at these events,
01:20:01 we asked our Connect for Climate colleagues to share with us
01:20:05 what young activists, students and champions
01:20:08 want to see happen on this agenda.
01:20:10 C4C was on the ground at MENA Climate Week
01:20:14 and here is what they heard about
01:20:16 what young people are looking to change on climate action at COP27 in November.
01:20:23 [Rania Al-Mashat, Minister of International Cooperation, Egypt]
01:20:25 We're very happy Egypt is going to be leading the COP27
01:20:28 in Sharm El-Sheikh in November.
01:20:30 [LOOKING AHEAD TO COP27]
01:20:31 [Mari Pangestu, Managing Director of Development Policy and Partnerships, WBG]
01:20:32 COP27 is the opportunity to go from declaration to implementation.
01:20:37 [Federica Fricano, Director for International Climate Action, Ministry for Ecological Transition, Italy]
01:20:38 COP27 is our chance to revisiting the ambition and filling the gap.
01:20:43 [Neeshad Shafi, Co-founder, Arab Youth Climate Movement Qatar]
01:20:44 COP27 is our chance or Middle East countries to enhance their climate action.
01:20:47 [Deena Mariyam, Member, YOUNGO] To uplift the region that has been neglected.
01:20:49 [Elizabeth Gulugulu, Global South Focal Point, UNFCCC Children and Youth Constituency]
01:20:50 To show we are implementers of the Paris Agreement.
01:20:52 [Princess Abze Djigma, Chair, H.R.H. Princess Abze Djigma Foundation]
01:20:54 Now it's about mobilizing finance because we need trillions.
01:20:57 It's not about billions.
01:20:58 [Elizabeth Curmi, Director, Global Thematic Analyst, Citi]
01:20:59 This year it's taking place in Egypt so we have to make sure
01:21:01 that emerging markets are well represented.
01:21:04 [Keith Tuffley, Vice Chairman, Global Co-Head, Sustainability & Corporate Transition, Citi]
01:21:05 We cannot possibly solve global climate change
01:21:07 without creating the right environments
01:21:08 for capital to move towards the emerging markets.
01:21:11 [Rania Al Mashat] For the trillions to make their way on the ground,
01:21:15 we need to be able to decipher what we mean by derisking and blended instruments.
01:21:21 So we look forward to working with all our partners to see
01:21:24 how we can actually move from commitments to implementation.
01:21:29 [Nigel Topping, UN High-Level Climate Action Champion]
01:21:30 At COP27, we need to get much more granular about solutions
01:21:34 to the needs of the most vulnerable communities.
01:21:36 [Hatim Aznague, Youth4Climate Delegate, Morocco]
01:21:37 We need accountability at COP27.
01:21:39 [Hoor Ahli, Youth4Climate Delegate, UAE]
01:21:40 We need to ensure collective action at COP27
01:21:42 because this determines the life of my generation and future generations.
01:21:46 [Amal Ridene, Tunisian Young Climate Change Negotiator]
01:21:47 It is important that all the parties get to join the conversation.
01:21:50 [Rania Al-Mashat] It includes not just the private sector
01:21:51 and civil society and governments and multilateral development banks,
01:21:56 but youth are extremely important in this equation.
01:22:00 [Rand Alkhushman, Founder, Green for Jordan Initiative]
01:22:01 In COP27, I really hope that young people will be more involved.
01:22:05 [Disha Sasrkar, YOUNGO ACE Contact Point]
01:22:06 Youth have to be at the center of this kind of implementation.
01:22:08 [Mohamed Maray Mohamed Elshikhi, Co-founder, MENA Youth Network]
01:22:09 The youth engagement, we have to take it to the next level.
01:22:12 [Selma Bichbich, Member, YOUNGO]
01:22:13 Trusting us does work and we want to prove that at COP27.
01:22:15 [Reem Al Saffar, 2022 Max Thabiso Edkins Climate Ambassador]
01:22:16 Because young people are our region's greatest resource.
01:22:19 [Ferid Belhaj, Vice President for Middle East and North Africa, World Bank]
01:22:20 On the road to COP27, we need the youth
01:22:22 because whatever we do today for COP27 and COP28 will be for them.
01:22:28 [Xan Northcott, Global North Focal Point, UNFCCC Children and Youth Constituency]
01:22:29 We'll be working tirelessly to make sure
01:22:30 that as many young people will be trained and prepared
01:22:34 to meaningfully participate and collaborate
01:22:36 with the parties and governments at COP.
01:22:38 [Rania Al-Mashat] We look forward to welcoming all of you in Sharm El-Sheikh.
01:22:41 [WORLD BANK GROUP] [CONNECT4CLIMATE]
01:22:45 [Meriem Gray] Young climate activists demand action and inspire hope.
01:22:49 Climate change impacts everyone, but the future belongs to young people
01:22:53 and it is great to meet some of the young activists on the front lines.
01:22:56 [COMING UP] [AVAILABLE FOR REPLAY]
01:22:58 You can re watch this event as well as previous ones
01:23:01 on the potential of the digital revolution
01:23:04 and discussion between the leaders of the World Bank Group and IMF
01:23:07 on responding to global shocks.
01:23:10 Stay with us all week for more high-level discussions
01:23:13 on the most pressing challenges in development today.
01:23:16 Tomorrow we will be bringing you two more events.
01:23:19 The first is about rising fragility
01:23:22 and then we'll be focusing on how to preserve open trade.
01:23:25 We will be wrapping up these meetings on Saturday
01:23:28 by exploring how we can reverse the losses in human capital.
01:23:33 You can watch all of that at live.worldbank.org.
01:23:37 Thank you for being with us today. We hope you enjoyed this program.
01:23:41 We really wanted to bring you different perspectives,
01:23:44 tangible solutions that are helping us to finance climate action
01:23:48 for a green, resilient and inclusive future.
01:23:51 Goodbye for now.

Transitioning Economies, Transforming Climate: Financing Climate Action for a Green and Inclusive Future

- Watch in العربية | Français | Español -

Financing Climate Action lays out the complexities of tackling climate and development objectives together amid a geopolitical landscape characterized by conflict, rising prices, and intensifying climate impacts. Several pressing issues are addressed in a series of conversations, from the cost of phasing out coal and the scale of the climate risk we face, to the need to de-risk investments in low-carbon and energy efficiency projects in developing countries, and the expectations for COP27 in Egypt. The event includes videos laying out the climate finance landscape as well as young people expressing their hopes for climate action at COP27.

Follow the event on Twitter #Finance4Climate

PAGE SECTIONS

- LIST OF SPEAKERS -

- 25-MIN AUDIO SUMMARY -

- RESOURCE LINKS -

- READ THE LIVE Q&A -

- ABOUT THE SPRING MEETINGS -

00:00 Welcome! WBG Spring Meetings 2022 | Financing Climate Action
03:09 Climate action, climate change, global public goods
21:32 How climate finance works?
25:14 Private capital in supporting climate action
51:00 How to make climate finance tangible and action-oriented
1:03:32 Social media conversation and poll results
1:06:42 Live Q&A: How we can finance effective climate action
1:19:59 COP27: What young people are looking to change on climate action
1:22:58 Closure | Thanks for watching the WBG Spring Meetings 2022

"The World Bank has been implementing the Climate Change Action Plan, which is based on integrating climate and development, and directly recognizing the value of global public goods."

— David Malpass, President, World Bank Group

"An affordable transition means that the access to capital needs to be cheap enough to compensate the very costly capital commitment and also affordable in terms of availability of financing."

— Sri Mulyani Indrawati, Minister of Finance, Indonesia

"We need to get behind countries and support them with the enabling environment for funding to come in."

— Mari Pangestu, Managing Director of Development Policy and Partnerships, World Bank

“[The] World Bank can help in structuring or thinking about how to have commitments that last years and years between governments and their coal sector.”

— David Malpass, President, World Bank Group

RESOURCES

STORIES & BLOGS

MULTIMEDIA

REPORTS

WEBSITES

Read the transcript

00:03 [Upbeat Music]
00:12 [Spring Meetings 2022]
00:16 [Climate Change]
00:18 [Green Recovery]
00:20 [Energy Transition]
00:23 [Climate Action]
00:25 [Adaptation]
00:28 [TRANSITIONING ECONOMIES & TRANSFORMING CLIMATE: FINANCING CLIMATE ACTION]
00:38 Hello and welcome, everyone.
00:40 [Meriem Gray] I'm Meriem Gray, and I'm joining you live
00:42 at the World Bank Group headquarters here in Washington, DC.
00:46 The focus of the Spring Meetings this year
00:49 is investing in resilience and managing uncertainty.
00:52 [Meriem Gray, Communications Lead, Sustainable Development, World BANK]
00:53 Topics of critical relevance today as the war in Ukraine,
00:56 COVID and climate change are generating unprecedented challenges.
01:01 While all countries will be affected, the effect on developing countries
01:05 will be much worse, whether through higher food and energy prices,
01:09 weakening economic prospects, or increasing climate impacts.
01:14 Leaders from around the world are meeting here
01:16 to discuss these impacts and to shape solutions
01:19 that can build stronger, safer and more prosperous communities.
01:24 Today, we will be looking at what it will take to advance climate action,
01:28 especially at the time of tightening fiscal constraints.
01:31 What are the financing needs for climate smart future?
01:35 How can resources be effectively leveraged?
01:38 What kinds of capital can support specific low carbon resilient investments?
01:44 And most importantly,
01:45 how the climate and development agendas are connected so that working on one front
01:50 also advances outcomes for the other and they really deliver
01:54 for people and human well-being?
01:57 [LIVE.WORLDBANK.ORG] A reminder, we are streaming this event
02:00 in English, Spanish, Arabic at live.worldbank.org.
02:04 Let's take a look at what's coming up over the next hour.
02:10 [COMING UP]
02:16 [FINANCING THE LOW-CARBON TRANSITION]
02:18 [Sri Mulyani Indrawati, Finance Minister, Indonesia]
02:21 [David Malpass, President, World Bank Group]
02:24 [UNLOCKING PRIVATE FINANCE FOR CLIMATE ACTION]
02:26 [Rania Al-Mashat, Minister of International Cooperation, Egypt]
02:29 [Yves Perrier, Chairman of the Board, Amundi]
02:34 [Rhian-Mari Thomas, CEO, Green Finance Institute]
02:37 [Makhtar Diop, Managing Director, IFC]
02:43 [THE WAY FORWARD FOR CLIMATE FINANCE]
02:44 [Lord Stern, IG Patel Professor of Economics and Government, London School of Economics]
02:46 [Mari Pangestu, Managing Director of Development Policy and Partnerships, World Bank]
02:51 [Meriem Gray] We have many interesting discussions coming up and to start,
02:54 the President of the World Bank Group, David Malpass, invited
02:58 Her Excellency Sri Mulyani Indrawati, Minister of Finance of Indonesia,
03:02 to discuss issues around climate action,
03:04 a topic they have frequently discussed together.
03:09 [David Malpass] Thank you very much, Meriem.
03:11 I want to welcome everybody to today's discussion.
03:15 It's a pleasure to be here with her Excellency Sri Mulyani Indrawati.
03:21 She's the finance Minister of Indonesia,
03:23 and she's also so a senior host within the G20 process this year.
03:28 We're going to be discussing climate change and also the big challenge
03:33 of development along with global public goods.
03:37 So with that, thank you very much, Sri Mulyani, for joining us.
03:42 We spoke together last year,
03:44 a year ago on this topic and also at Glasgow at COP26.
03:48 Since then, I'll give you a brief update,
03:51 the World Bank has been implementing the Climate Change Action plan
03:56 which is based on integrating climate and development
04:00 and directly recognizing the value of global public goods.
04:04 We have much higher spending targets for the World Bank Group,
04:08 and we're also looking to have those spending and engagements
04:13 with countries be as effective as possible.
04:16 We're doing that through reports
04:18 for countries around the world, CCDRs that we think will be
04:23 a powerful instrument to help countries
04:26 think about their own engagement with both development
04:30 and integrating it with climate.
04:32 Around the world, we're working to lower greenhouse gas emissions.
04:36 This is a challenging task and also carry out adaptation,
04:41 help countries with their preparations for climate changes.
04:45 We're working in other areas of global public goods,
04:48 such as marine plastic and conservation,
04:51 all of which take money from the world community
04:55 and apply it to specific global public goods
04:59 that are goals of the whole world community.
05:02 We now are faced with the war in Ukraine.
05:05 It's having a compounding effect on the cash flow,
05:10 on human tragedy going on in Ukraine itself,
05:14 higher food and fertilizer, and energy prices around the world,
05:19 which puts strain on budgets such as the Indonesian fiscal budget.
05:26 It's causing stress on top of the pandemic.
05:29 We see that Europe is changing,
05:32 its thinking about some aspects of global public goods,
05:36 including its stand toward natural gas,
05:40 which is an important source of energy, and nuclear power also,
05:44 and a very important source of base load for electricity production.
05:49 So those are some of the challenges that the world faces as a whole.
05:54 As we get specific, I'm going to ask
05:59 Finance Minister Sri Mulyani how she thinks about the connection
06:05 between financing of projects, which is a challenge in itself,
06:10 and something that the World Bank is very well-positioned to help with.
06:14 But it's expensive and for the whole world community
06:17 to be participating in the financing.
06:20 Welcome, Minister Sri Mulyani.
06:23 [WASHINGTON, DC, USA] [JAKARTA, INDONESIA] I'll launch right in.
06:26 I want to ask about the coal transition in Indonesia.
06:31 How can it be financed?
06:32 What are some of the problems you've encountered?
06:35 What are some of the steps that the world needs to go through in order to help
06:40 in the effort toward reducing greenhouse gas emissions in Indonesia?
06:45 Thanks for joining today.
06:48 [Sri Mulyani] Thank you, President Malpass.
06:50 It's really good to see you also and I would like to congratulate you.
06:53 Under your leadership, the World Bank Group has been very good in responding
06:58 to many of the membership challenges,
07:00 especially related to the global public goods issues.
07:04 First, the pandemic which you responded very well and quickly
07:07 to help many of the countries in the world
07:10 and then also now related to the climate change.
07:13 On climate change, Indonesia is one country but it's not a unique case.
07:19 We have already commit what we call
07:23 our National Determined Contribution to reduce our CO2,
07:27 29% of the CO2 reduction with our own effort
07:32 or 41% if we are going to get the support internationally.
07:37 The question now is how we are going to implement this commitment.
07:42 The biggest contributor of course for Indonesia, two very important ones:
07:48 the forestry as well as the energy sector.
07:51 In the energy sector, Indonesia has a rich natural resource,
07:56 we also rely very much on coal.
07:59 So currently, coal is actually the dominant energy mix
08:04 under the Indonesia energy fuel mix.
08:08 It is around more than 60%.
08:10 If we are going to reduce the CO2 which is coming from the energy,
08:15 definitely we require to address this issue at the coal,
08:19 and at the same time when the demand for energy continues to increase,
08:24 then we have to be able to build the replacement for coal
08:28 as well as satisfying the new demand.
08:33 On the coal which is related to how we are going to address the issue of coal,
08:38 we are designing what we call the energy transition mechanism.
08:42 But Indonesia, just like many other countries in the world
08:46 when we hit hard by the coffee [inaudible],
08:49 actually the demand for electricity declined.
08:53 At this very moment, when Indonesia already has around
08:57 270 gigawatts of energy capacity,
09:04 the demand is actually much lower than that,
09:07 around 20 gigawatts excess supply.
09:11 While the decision for us to build additional capacity in the past five years
09:16 has already created additional 13 gigawatts.
09:20 Now if we are going to produce coal, that means we have to decide
09:26 how we are going to retire the coal which is already contracted.
09:31 In Indonesia, we have what we call
09:35 the individual power purchase by the private sector.
09:38 Some of the power generator owned by PLN,
09:42 our electricity company which is state owned.
09:45 There are also power generators which are owned by the private sector
09:49 and they are contracting the energy to the PLN.
09:55 This contract is usually a long-term contract, 20 to 30 years.
10:01 If you want to retire coal that means we have to reduce the length of the contract.
10:08 Currently we've already identified five gigawatts of the core power energy
10:14 that is power generator with the qualification of their own
10:19 and that's why the efficiency is low and they are more polluting.
10:24 So among all those power generators sectors
10:29 which is actually coming from coal, we've already identified.
10:33 Now, to retire the coal
10:36 if it is owned by our own PLN, that is the electricity company
10:41 you don't have to renegotiate the contract.
10:44 This is just about retiring this old power generator
10:48 and then you have to replace it with a renewable one.
10:51 Still in this case, we have to make sure
10:55 that the renewable energy is going to be efficient technology
10:59 as well as in terms of financing, it needs to be secure.
11:03 That's why you need investment for the renewable energy.
11:07 For the retirement of the old coal power plants,
11:12 which belong to the private sector,
11:15 then you have to renegotiate contracts because there is a contract already,
11:21 this is take or pay usually.
11:23 We call it TOP, tax or pay,
11:25 and that's why we have to make sure that they are willing to then retire
11:30 in terms of the length of the contract, the rest of the contract that will be reduced.
11:35 Then compensated in the way
11:38 that it cannot be seen as violating the contract.
11:42 If you violate a contract, Indonesia has a very bad experience
11:45 in which we were in an international tribunal and we lost the case.
11:49 That's not really good, not financially but also reputation wise.
11:54 For us to do the energy transition mechanism
11:58 there are many issues that need to be addressed.
12:01 First, how you are going to renegotiate the contract
12:04 with the independent power producer
12:08 in, what we call it, an amicable way
12:11 that is going to be accepted through the good practice.
12:17 Then the second one, how you are going to compensate this contract
12:21 that will be reduced in terms of the length of their service
12:26 and where the money is coming from to compensate that deduction?
12:33 At what price? Is it going to be like the secure price?
12:37 Don't forget that sometimes coal can be not really efficient in the past.
12:43 The contract cannot really be seen as in the best interest for our PLN.
12:49 Sometimes it's just too costly, 12 cents kilowatt hour or 10 cents.
12:55 Sometimes, the price can be actually much lower than that.
13:01 That kind of situation on a technical level needs to be addressed.
13:08 Then the second one is where the money comes from to retire this coal.
13:13 Here we work with the Multilateral Development Bank.
13:17 I appreciate it.
13:18 With the World Bank, with the ADB we are talking about
13:21 what kind of structure is durable in this case.
13:25 Not to mention, in this case, the social and environmental consequences
13:29 of this power plant that will be retired.
13:32 Are they going to just like to become a sound capital?
13:36 An abandoned capital?
13:37 We also need to be thinking about that.
13:41 Then to replace with renewables,
13:43 we also need another capital spending to build the renewable energy.
13:48 For us the question is about the location
13:51 as well as the transmission and distribution.
13:54 Indonesia is an island country, David,
13:59 so the demand is mostly in Java,
14:03 but you also need to build for the outer Java Island
14:07 which is now growing very fast, like Sumatra and Kalimantan.
14:10 These all have their own source of renewable energy.
14:15 [David Malpass] Thank you for going through that.
14:17 I think it's relevant because so many countries face similar problems,
14:22 whether that's Vietnam, Turkey or South Africa,
14:25 dependence on coal, on either coal imports or coal itself,
14:33 and the high value of it, it's gone up in value even now
14:38 because of the rising energy costs around the world for other commodities.
14:43 You used a...
14:46 In Glasgow, you used a large number for the cost or the inflow of money
14:53 that would be needed for this effort.
14:55 One thing World Bank Group,
14:59 IFC and the World Bank have been looking at is
15:03 how to create a facility that would allow the coming together
15:06 of funding sources from around the world
15:09 and then focus it on a specific greenhouse gas emission reduction project.
15:16 We're at the point where we have to be concrete in
15:18 how to close a coal fired power plant in South Africa or in Indonesia.
15:25 Those proved to be really difficult challenges
15:27 because of the large cost and the long lifespan of the project.
15:32 It takes years and years to wind down the dependence on coal.
15:38 Do you want to share your thinking on the cost you used in Glasgow?
15:46 [Sri Mulyani] In this case, we identified the total cost for the reduction
15:50 based on the updated before the COP26 in Glasgow.
15:56 It's around 286 billion US dollars.
16:00 Mostly, it's actually for the energy.
16:01 We actually can have it much cheaper through the forestry.
16:05 That's why we're also supporting us on the mine groove refracting.
16:09 I think this also has a lot of potential for Indonesia,
16:13 but energy definitely is the highest in this case,
16:15 which is around 60% of the cost for that.
16:19 The question regarding how we are going to structure this.
16:24 First, you're right.
16:26 At this very moment, the coal price has even increased,
16:30 at some point, even reaching more than 400%.
16:34 I think it's extremely high in this case.
16:40 Now it's already going down again.
16:42 This is also for Indonesia.
16:44 Although we are among the biggest producers of coal in the world,
16:50 we have actually committed this coal for many of the exports.
16:54 That's why if we are going to compete with our own use for our own electricity,
16:59 Indonesia impose what we call domestic markup obligations.
17:04 So for the coal producer,
17:06 they have to provide our own coal needs for our electricity
17:12 before you can actually spend or sell it to the foreign or international market.
17:18 When the coal price is very high at some point,
17:21 actually, we were a little bit caught by surprise because suddenly
17:26 because suddenly the stock of coal domestically was shrinking very fast.
17:32 So we then turned around and made sure
17:34 that there will be really monitoring of the export of coal in Indonesia.
17:40 [David Malpass] These are big challenges.
17:42 There's going to be a full discussion today in other panels of some of these issues.
17:48 But the thing that strikes me is the large costs,
17:53 the complexity of the projects themselves, their long duration.
17:58 World Bank can help in structuring or thinking about
18:02 how to have commitments that last for years and years
18:05 between governments and their coal sector, for example.
18:09 But this core problem that you're mentioning right now
18:12 that the coal is either used in Indonesia
18:15 or it's exported and burned somewhere else,
18:18 that poses itself a giant global public goods problem for the world
18:25 of how do you lock in and how do you avoid
18:29 the ultimate use of those carbon holding products.
18:34 This is one that I think has to be tackled directly
18:37 in terms of global public goods and the financing for it.
18:41 [Sri Mulyani] Yeah. Thank you so much, David.
18:43 It is really a very important and challenging task for our country
18:47 because when we talk about a global public good like climate change,
18:51 this is not only about the idea or the intention,
18:54 but most importantly translating it into a very workable,
19:00 both investment decision and commitment.
19:04 In this case, what we call affordable transition
19:07 means that the access of capital needs to be cheap enough
19:11 to compensate this very costly capital commitment
19:16 and then also affordable in terms of availability of this financing.
19:21 The World Bank is in a very good place
19:24 for you to become both catalytic but also financing side
19:28 to be able to use the World Bank Group, IFC, MIGA,
19:32 as well as IBRD or IDA.
19:35 I think this is going to be one of the most important World Bank roles
19:39 in order to help many of the member countries
19:42 to be able to design a good and sound, and credible transition on energy.
19:47 Thank you so much.
19:49 [David Malpass] Thank you very much. Back to you, Meriem.
19:54 [KINGSTON, JAMAICA]
19:55 [Charmaine] I'm Charmaine from Kingston, Jamaica,
19:57 and you're watching the World Bank Group-IMF Spring Meetings.
20:04 [Meriem Gray] Thank you, David and Sri Mulyani for those insights
20:06 and a really interesting update on what has specifically changed
20:11 since they connected last year on these issues.
20:14 Please do share your thoughts on that discussion and those to come.
20:17 [#FINANCE4CLIMATE]
20:18 You can post your comments using the #Finance4Climate
20:22 and follow us on Twitter, Instagram, Facebook, and LinkedIn.
20:26 You can also post comments and questions at live.worldbank.org.
20:31 That's where we have our experts standing by
20:34 to answer your questions in English, Spanish, French and Arabic.
20:37 Let's take a look at some of them.
20:39 They are already busy at work.
20:42 We will be putting some of the most popular questions
20:45 to two World Bank experts at the end of today's event.
20:48 We are also inviting you to take part in our quiz challenge.
20:52 The question we are asking today is,
20:55 how much investment is needed each year to limit global warming, put resilience,
21:01 and support a global transition to net zero emissions?
21:06 Is it A? About $10 billion dollars a year.
21:10 B, about $100 billion dollars a year?
21:14 Is it even more than that?
21:15 C is about $1 trillion dollars a year,
21:19 and the last option is D, more than $2 trillion dollars a year.
21:24 You can cast your vote right now at live.worldbank.org,
21:28 and we'll bring you the results at the end of this event.
21:32 Before we go to our next discussion,
21:34 we ask one of our experts to help explain exactly how climate finance works.
21:40 Let's take a look.
21:41 [PUTTING THE PIECES TOGETHER]
21:44 [HOW TO FINANCE THE CLIMATE TRANSITION]
21:46 [Valerie Hickey] Each country is different.
21:48 All need to address the climate crisis.
21:51 How can we help piece together the right investments
21:54 that can help countries meet both climate and development objectives?
22:00 Climate finance is increasing, but not fast enough.
22:04 Over the next decade, we need to mobilize trillions of dollars
22:07 to give people access to resilient and reliable water,
22:10 food, clean energy, mobility, health and education,
22:14 and protection from disasters.
22:17 [WHAT WILL IT TAKE?]
22:18 First, spend smartly.
22:21 Rethink inefficient subsidies and price carbon.
22:24 Enforce construction standards, green supply chains
22:28 and improve procurement,
22:30 and systematically screen for climate risk so that infrastructure is more resilient
22:34 and cheaper to build and maintain.
22:38 Next, get private capital flowing.
22:41 Better data and national plans can help investors invest with confidence
22:45 and ensure public and private resources complement each other.
22:49 In some sectors, like clean energy or electric vehicles,
22:52 the solutions are already here and largely competitive.
22:55 Private investors can speed up their adoption
22:58 so that scarce resources go to research and development
23:00 in less mature areas, like improving battery storage
23:03 and supporting more vulnerable communities.
23:06 In sectors like adaptation,
23:08 [Valerie Hickey, Climate Change, World Bank] private investment is lagging,
23:10 so we need new instruments and business models
23:13 to mobilize private capital to go where it's needed
23:16 and reduce risks for investors.
23:18 [CATALYZE]
23:19 Multilateral development banks like the World Bank Group
23:22 have a key role to play.
23:24 We act as a bridge between governments and private investors,
23:27 using public finance to catalyze private capital.
23:30 This is vital for developing countries
23:32 where investment needs and climate risks are highest.
23:37 Climate finance can also help carbon markets
23:39 to monetize emissions reductions,
23:41 as well as more dedicated climate finance,
23:44 including the 100 billion pledged
23:46 under the Paris Agreement and concessional finance.
23:50 Piece by piece,
23:52 we can build the green, inclusive and resilient economies of the future.
23:57 [WORLD BANK GROUP] [Climate Change]
24:02 [PHNOM PENH, CAMBODIA] [Phyram] Hello, I'm Phyram in Phnom Penh, Cambodia,
24:05 and you're watching the World Bank Group-IMF Spring Meetings.
24:12 [Meriem Gray] As you just saw,
24:13 financing climate action is about investing trillions of dollars.
24:17 Let's find out a bit more about
24:20 how the private sector is going to play a key role in driving this forward.
24:25 Makhtar Diop is the Managing Director of the International Finance Corporation,
24:29 that is the private sector arm of the World Bank Group.
24:32 He's going to lead our next discussion
24:35 on the role of private capital in supporting client action.
24:39 His first guest is Rania Al-Mashat, Egypt's Minister for International Cooperation.
24:45 Egypt will be hosting COP27 later this year,
24:48 and climate finance will be a critical issue.
24:52 He will then drill down into
24:53 how to mobilize private capital and accelerate financing
24:57 with Rhian-Mari Thomas, Chief Executive of the Green Finance Institute,
25:03 and Yves Perrier, Chairman of the Board of Amundi,
25:07 one of the world's leading asset management companies.
25:12 [Makhtar Diop] Thank you, Meriem.
25:13 It's great to be able today to discuss about climate change.
25:17 We know that there are many solutions to help really in fighting climate change.
25:24 The money is not what is missing.
25:26 Actually, I was recently talking to some people
25:29 and I was explaining how much money
25:31 there was in the capital market for that effort.
25:33 We need to mobilize that money to find solutions, to find projects
25:37 which are very useful for our private sector to invest
25:40 both in adaptation and mitigation.
25:42 We will hear all that from our panelists.
25:45 I'm here to start first with Rania Al-Mashat,
25:49 Minister of International Cooperation of Egypt.
25:53 Madame Minister Rania, it's a pleasure to have you today
25:56 and thank you for joining us.
25:58 We know that COP27 will be held in Africa, right in Egypt.
26:04 You have a very big ambition for this COP27.
26:07 Can you tell us quickly what you have in mind?
26:10 [Rania Al-Mashat] Thank you. A timely conversation on climate.
26:15 Egypt's presidency is focusing on three main messages.
26:20 First, our impartiality, even though we are an African nation,
26:23 but this is a COP for the world, so we're trying to maintain that.
26:27 Second, as you correctly mentioned, adaptability, adaptation, and resilience
26:32 are extremely important for many developing countries.
26:35 The latest crisis we're seeing in Ukraine,
26:38 Russia has brought to the forefront again
26:40 the importance of food security and everything that is related to that.
26:44 And then third, it's going to be what we hope is an implementation COP.
26:49 So how can we move from the pledges to implementation and to action?
26:52 Those are the three key messages out of Egypt
26:56 and hopefully to be materialized next November in Sharm el-Sheikh.
27:02 Madame Minister, as you said, there were a lot of pledges in COP26.
27:06 Now we want to see execution.
27:09 I know that energy transition is very high on our agenda.
27:13 Water security is another important part of your agenda,
27:17 but also everything related to adaptation,
27:19 which is sometimes a bit overlooked in the conversation.
27:23 Tell us a little bit what the private sector can do to support all these priorities.
27:28 [WASHINGTON, DC, USA] [CAIRO, EGYPT]
27:29 [Rania Al-Mashat] Let me first acknowledge
27:31 IFC's important role in mobilizing private sector
27:35 and pushing private sector investments in countries.
27:38 COP aside, the work that is being done
27:42 to actually engage private sector is important.
27:46 In our case, the energy transition started several years ago.
27:51 When we take a look at the integrated sustainable energy strategy
27:57 that had clear KPIs for renewable energy in the country,
28:02 the government did structural reforms which were very important
28:06 to be able to crowd in private sector investments.
28:09 That is when the IFC and many other institutions
28:12 were able to bring in their investments to support the energy transition.
28:18 This has brought together a successful project, the Benban project,
28:22 one of the biggest solar plants in the region.
28:25 These are examples that can be replicated in other countries, as well.
28:30 They show how different stakeholders can come together.
28:34 Governments have a role to play in terms of regulatory and legislative reforms,
28:38 the private sector's willingness, but also the IFIs,
28:42 whether in terms of financing or technical capacity.
28:46 These are examples that can be replicated.
28:50 In our case, Egypt has finished its 2050 climate strategy,
28:56 and as you correctly point out,
28:58 it includes the plans to move to our NDCs by 2050,
29:06 across different sectors, with agriculture, transportation,
29:10 and many others.
29:11 The idea of the 2050 climate strategy
29:17 is that it is not divorced from development.
29:19 That's why also with the World Bank Group,
29:21 we are one of the pilot countries with the CCDR,
29:25 the Country Climate Development Report,
29:28 because we cannot think about climate
29:31 as separate from the development process of the country.
29:35 That's why there's a lot of integration
29:38 between the different sectors and the different targets.
29:41 Maybe let me just conclude by saying that
29:43 given that official development assistance is extremely important for different countries,
29:48 in our case, the portfolio is quite sizable.
29:51 We're talking about $26 billion dollars.
29:54 Given the importance of SDGs in the country's agenda,
29:58 we mapped the official development assistance to the SDGs.
30:02 If we look at the SDG number 13 related to climate action,
30:05 we find that there's 12 billion dollars dedicated to that,
30:08 2.8 to adaptation, 7.8 to mitigation.
30:12 You can see the imbalance, and I think in the period ahead
30:16 what we want to do is to try and push further the adaptation agenda.
30:21 [Mahktar Diop] That is great.
30:24 You talked about regulation.
30:25 You talked about things that need to be done.
30:28 One of the things that we're hearing from the private sector
30:32 is the green taxonomy.
30:33 People want to know when they invest to support a fight against climate change
30:39 that is really targeted to activities which are related to that.
30:43 What is your view about green taxonomy?
30:47 [Rania Al-Mashat] I think it's absolutely correct.
30:50 The climate conversation is a multi-stakeholder conversation.
30:55 It includes governments, private sector citizens,
30:58 as well as the international community.
31:00 That's why it's very important from the government side
31:04 to have a clear vision to communicate it.
31:06 If there are any legislative impediments
31:09 for private sector engagement, try and address those.
31:12 Also very important are the innovative types of financing.
31:17 One of the achievements of Glasgow was that
31:21 the private sector's engagement was very high on the agenda.
31:24 We saw lots of commitments from private sector entities.
31:29 The point is now, how can we take these pledges into implementation?
31:33 That requires all of us working together
31:36 to be able to create derisking opportunities for the private sector
31:40 through innovative tools, blended tools, and so forth.
31:44 There is a wealth of experience at the IFC, at the EBRD,
31:47 other institutions that have actually showcased projects,
31:52 whether mitigation or adaptation,
31:54 in emerging markets and middle-income countries.
31:56 These are examples that we want to be able also to showcase and replicate.
32:02 It also addresses the green taxonomy that you just mentioned
32:06 because it gives comfort or confidence that
32:11 whatever target set by the government and the private sector is able to come in,
32:15 that is also achievable.
32:19 [Makhtar Diop] Now, thank you very much.
32:21 If I can summarize a little bit of the conversation,
32:24 tell me if I get it right.
32:26 You said that you need a clear regulation.
32:28 We need taxonomy.
32:30 We need to have projects which are bankable.
32:33 We need to create an environment where people are investing
32:36 in adaptation as much as they invested in mitigation.
32:39 I hope that the IFC will be your preferred partner
32:44 in making it happen during the COP27.
32:47 Do I get it right?
32:48 [Rania Al-Mashat] Yes, I think, Makhtar, you summarize it very nicely.
32:52 I would just conclude by saying that
32:54 all stakeholders have a role to play, and there is complementarity.
32:58 The government needs to be clear and needs to be committed
33:01 through taking very important reforms in its own right.
33:07 The private sector needs to also show its commitment
33:12 and then the international community or the multilateral development banks,
33:15 and of course, IFC being a key partner
33:18 on private sector engagement also play a role.
33:21 I think it's complementarity among all stakeholders.
33:26 I believe that all of us are very much committed
33:29 and climate is very high on everybody's agenda.
33:32 [Makhtar Diop] Thank you very much, Madam Minister.
33:33 It was a pleasure talking to you.
33:35 A lot of food for thought.
33:37 You raised a lot of points.
33:38 Adaptation, mitigation.
33:40 The need to balance investment in all sectors.
33:43 The need to bring some blended finance to their risk investment.
33:46 Let's now turn to two people who are actively involved
33:50 in mobilizing resources to fight climate change.
33:53 We have Yves Perrier, the Chairman of Amundi,
33:57 a large long-term partner of IFC,
34:00 which is also the largest asset manager in Europe.
34:05 I'm also joined by Rhian-Mari Thomas,
34:08 who is the CEO of the Green Financing Institute,
34:12 which is a think tank working on climate change related issues.
34:16 Both of them will tell us a bit more about their experience
34:20 in mobilizing resources to finance the fight against climate change.
34:25 Yves, bonjour, because we are in Paris.
34:28 Let's start and have that conversation.
34:30 Amundi has a tremendous experience in mobilizing resources.
34:35 We've been working with you at IFC for many years.
34:38 Really, when you are looking at people very experienced in the market,
34:42 we are looking at you.
34:43 What can you share from your experience with people who are listening to us today?
34:50 [Yves Perrier] Thank you, Makhtar.
34:52 Let me start by thanking you for the stronger relationship
34:58 that we built between Amundi and IFC.
35:04 Especially we were very pleased
35:09 and very committed to create together.
35:14 The Amundi Planet EGO Fund,
35:18 which brings together public sectors and private investors.
35:24 This kind of initiative was part of a global policy.
35:31 We had equivalent initiative in Asia
35:36 with the Asian Investment Infrastructure Bank
35:40 in Europe with the EIB, and also in France with Caisse des Dépôts.
35:49 There are two main lessons
35:53 we withdraw from this experience.
35:57 The first is to be able to understand this objective
36:02 of development financial institution as well as the public sectors
36:10 and also the capacity to align them
36:13 with the needs of individual investors in their investment guidelines.
36:21 The second lesson is to share experience.
36:25 With this partnership, we have built a unique experience and basis of knowledge.
36:32 We made this knowledge public and available to everyone.
36:38 [Makhtar Diop] Thank you so much, Yves.
36:39 Rhian, it was a nice sharing a panel with you in Glasgow.
36:44 We talked about a lot about capital mobilization
36:48 and I just came from Colombia where we launched the first green taxonomy.
36:52 I know that you're working on a lot of things which are of that nature
36:56 to give more confidence in the private sector to invest.
36:58 Tell us a little bit more about what you're doing.
37:01 [Rhian-Mari Thomas] Sure. Greetings from London and thanks so much,
37:04 Makhtar, for inviting me onto the panel today.
37:07 One of the things that we discussed in Glasgow
37:10 was this point about the right kind of capital
37:12 into the right kind of climate investment opportunities
37:15 and that should be the tagline for financing
37:18 the whole of the zero-carbon transition.
37:20 I think it really perfectly captures
37:22 the task at hand which is about creating the opportunities for finance providers
37:27 to fund the transition in a way that meets their risk adjusted returns hurdles,
37:32 removing the barriers so that capital can flow.
37:35 Those barriers can take many forms,
37:38 but as we're talking about risk and rewards
37:40 let's focus on possible solutions to removing financial barrier.
37:44 You've kindly invited me to give an example
37:46 of the work that we've been doing.
37:48 I'd love to share an anecdote about the work that we've been doing
37:51 in South Africa with the South African banks and the investors.
37:55 The banks there are facing a specific barrier,
37:57 which is the deep pools of pension capital in South Africa need to invest
38:02 in investment grade securities, such as government bonds,
38:06 and so that often exempts them from investing in much needed energy waste,
38:10 and water infrastructure in response to climate change.
38:13 By providing a derisking facility that would partially guarantee
38:18 the debt needed to fund those transactions,
38:21 the banks would be able to provide finance at competitive rates
38:25 and tenors, confident that they could then syndicate that
38:28 to local domestic pension and institutional funds.
38:32 We've developed a novel Green Finance Guarantee Fund
38:35 with partners in the UK and in South Africa that can provide that derisking.
38:40 Also importantly, we structured that fund so that it would include
38:44 government funding, development bank funding,
38:47 and private capital, all deployed together so that each type of finance provider
38:52 receives the returns they're seeking in line with their mandate.
38:57 A key aspect of this anecdote that might surprise some of our viewers is that
39:01 in the course of developing this fund, we uncovered over a billion pounds worth
39:06 of climate smart infrastructure projects that the banks would consider funding
39:10 if only they had the benefit of this guaranteed solution.
39:14 Just finally, the reason I'm particularly excited about this project
39:17 is whilst South Africa is the perfect jurisdiction
39:20 for a proof of concept such as this,
39:22 it's an entirely replicable solution in other countries.
39:26 If we can identify the situations
39:29 where with some derisking, we can crowd in private capital,
39:33 we're not only leveraging scarce government balance sheets
39:36 in those transactions, but also freeing up government development capital
39:41 for those situations where it's more challenging
39:43 to create a commercial case.
39:45 For example, to fund certain adaptation measures.
39:49 That's a whole other topic for us to discuss.
39:52 [Makhtar Diop] Thank you very much, Rhian.
39:55 It's very interesting when you come back to the emerging economies
39:57 and the role they can play in mobilizing resources
40:01 because most of the resources are so far mobilized from more advanced economies.
40:07 Let me turn now to Perrier before coming back to you
40:10 and ask a question about platforms.
40:13 I know that people want to reduce the transaction costs
40:16 so they don't want to repeat all the work done for a transaction.
40:21 They just want to have a standard term sheet.
40:24 Tell us a little bit what you think about innovative platforms
40:28 and the role they can play in mobilizing more resources.
40:32 [Yves Perrier] What is very positive is that in the recent period,
40:39 in the last three or five years, there has been a commitment
40:44 of the whole financing industry
40:48 towards this question of climate.
40:52 One very important point for this question is to consider that
40:59 it's an industrial revolution at the level of the planet.
41:04 We need to change the energy supply going from 80% fossil fuels,
41:11 which is the situation, to nearly 0%,
41:16 but also to change the product,
41:18 to change the way we manufacture the products, the chain of value.
41:23 To be successful, this revolution will need
41:31 a strong alignment of public policy and private investors, and of corporate.
41:43 It has to be done integrating
41:47 the question of security of supply
41:51 and the present context recalls this importance.
41:56 Also the question of relative competitiveness
42:00 and social impact, which will be very important.
42:06 I think that should emphasize on the coherence on all the criteria,
42:15 of course, the impact on climate, but also social impact.
42:21 That's the reason why we are very happy to have been selected by IFC
42:27 for the management and fundraising of the SEED Program.
42:34 This is consistent with what has been always the policy of Amundi,
42:40 which is to have a holistic view of this question of responsible investment
42:49 since the creation of the company 10 years ago.
42:52 [Makhtar Diop] Thank you very much and you raised a lot of points
42:57 which are actually connected to the point that Rhian-Mari mentioned.
43:03 You said something quite interesting earlier, Rhian.
43:05 You insisted on what needs to be done in emerging economies.
43:10 You gave an example, you talked about South Africa,
43:14 I'm sure that you have some other countries in mind.
43:17 What will it take today if we want to mobilize more resources
43:20 from emerging economies?
43:23 Especially, I think there will be a lot of sensitivity
43:26 to what Yves has just said about social bonds,
43:30 linking environment with social inclusion.
43:34 Tell me, what do you think about that?
43:36 [Rhian-Mari Thomas] I'd be happy to. I think as a broad comment,
43:40 I'd say this is really a challenge of leadership and collaboration,
43:45 and it's across all economies as Yves just said,
43:47 not only emerging markets.
43:49 Whilst I mentioned earlier, a financial mechanism that channels
43:53 governments' capital efficiently alongside development and private capital
43:58 in order to create lending and investment opportunities
44:02 for local banks and investors.
44:04 We can't solve for a one and a half degree aligned world
44:07 purely through financial instruments.
44:10 We clearly need that enabling policy and regulatory frameworks in country,
44:15 as well as the mechanisms to improve credit worthiness,
44:18 so that we can secure both local and international funds.
44:22 As implied in your question that they need to be led in country
44:27 by those who have a really detailed understanding of local conditions.
44:31 That's where organizations like the IFC,
44:33 you've got 16 years of experience financing opportunities
44:36 in emerging markets and developing economies,
44:39 you have such an important role in continuing to familiarize
44:43 both local and international mainstream finance institutions
44:47 with the opportunity for commercial investment
44:50 and helping overcome perceptions of risk.
44:53 For example, very practically pointing at your historic default rates.
44:58 Our research has also identified green banks as highly efficient vehicles
45:04 in country to channel domestic capital,
45:07 both public and private capital, towards climate smart projects.
45:11 I guess finally,
45:13 there are no intellectually coherent high carbon pathways to prosperity.
45:18 The science and the recent IPCC report have been very clear on this.
45:23 Building these collaborative initiatives and these institutions
45:28 that involve policymakers, industry experts and financiers
45:33 is absolutely key.
45:35 [Makhtar Diop] It's very interesting to hear this
45:39 coming from someone scientifically trained as you.
45:42 A lot of people don't know it, but you are scientist by training.
45:46 Saying that it's not an exact science,
45:48 but you need to put together institutions so that people can work and create
45:51 this social contract to mobilize everybody around the targets.
45:56 You have also said something quite interesting.
45:59 We need to derisk.
46:02 We need to have partnership,
46:04 public and private need to work together.
46:06 There is something I haven't heard a lot about
46:08 which seems to be coming more into conversation:
46:11 maybe more investment in efficiency.
46:14 You're talking about fighting climate change
46:16 by reducing emissions.
46:18 Hearing people going to COP27,
46:22 I increasingly hear people talking about reducing the waste in networks,
46:27 in electricity networks, reducing the leakages in water pipes,
46:32 reducing all these inefficiencies that we have.
46:36 What is your take on that, Rhian?
46:38 [Rhian-Mari Thomas] I fully agree with you.
46:39 Here at the Green Finance Institute, one of our flagship projects
46:43 has been looking at the efficient energy efficiency of buildings,
46:47 which here in the UK, our building stock accounts
46:50 for about a quarter of our emissions.
46:52 This is clearly a topic that really resonates with consumers,
46:58 it resonates with the electorate,
47:00 but finding ways of financing that upfront capital expenditure
47:05 that then enables people to have lower energy bills.
47:09 The same analogy in industry where you invest the CAPEX up front
47:14 in order to have the lower operating expenditure ongoing.
47:18 These are real challenges that again, needs financiers to be working closely
47:24 with regulators, policy makers in order to actually accelerate all of this.
47:30 I couldn't agree more with your emphasis on
47:32 this is about both supply and demand,
47:34 it's about efficiency,
47:36 it's about using resources well and efficiently,
47:40 as well as looking at our sources of demand
47:42 and having more reliance on renewable energies
47:46 and climate smart infra.
47:49 [Makhtar Diop] Thank you so much.
47:50 Yves, I know that in France, it is a government priority to reduce,
47:56 to improve efficiency in households, in houses, in heating systems.
48:01 Do you see a platform being built around that
48:05 to be able to mobilize the resources to fight climate change?
48:09 [Yves Perrier] Efficiency is the main challenge,
48:14 and it's a main challenge because we have to be realistic.
48:20 We need a lot of time to transform the economy, to change the energy.
48:28 When I look at the ten years to come,
48:32 I think that the way to reduce emission,
48:37 the most efficient way, is through energy efficiency.
48:42 It needs to align corporates
48:50 and the financial sector to finance this.
48:56 In Amundi, we have built a joint venture,
48:59 for example, with EDF, a public energy utility of France,
49:06 in order to finance this energy efficiency investment.
49:15 We can imagine also to issue bonds
49:21 with index about this where we share
49:26 the value of the reduction
49:31 of the consumption of electricity, of energy
49:36 between the utility, the consumers and the investors.
49:44 [Makhtar Diop] Sounds great.
49:45 I look forward to seeing both of you face to face,
49:48 I hope this time in Paris and London and pursue that conversation
49:52 and I would love to be able to organize something during COP27
49:58 where we can have that conversation and bring investors face to face
50:02 with the capital market to be able to,
50:05 to do more of what you're already doing.
50:08 Thank you so very much for joining us.
50:10 It was a pleasure having you in this panel.
50:12 Thank you so much.
50:14 - [Rhian-Mari Thomas] Thank you. - [Yves Pierrer] A pleasure. Thank you. Goodbye.
50:19 [NEW DELHI, INDIA] [Shilpa] Namaste.
50:20 I'm Shilpa in New Delhi and you're watching
50:23 the World Bank Group-IMF Spring Meetings.
50:30 [Meriem Gray] Thank you to Makhar Diop and his guests
50:33 for this insightful conversation.
50:35 Next, we will be joined by Mari Pangestu, Managing Director of Development Policy
50:40 and Partnerships at the World Bank and her guest,
50:43 Lord Nicholas Stern, IG Patel Professor of Economics and Government
50:48 at London School of Economics.
50:51 This forward-looking conversation will focus on
50:54 how to make climate finance tangible and action oriented.
51:00 [Mari Pangestu] We just heard a discussion about the challenges
51:03 around climate and development
51:05 from how we can integrate climate and development.
51:07 In the case of just energy transition,
51:10 how can we have just an affordable energy transition
51:13 at the same time phase out coal
51:15 and of course, the big challenge of financing the scale
51:18 of transformative investments that's needed for developing countries.
51:22 In this discussion, we want to take a little bit of a forward look.
51:25 I'm joined by my good friend Lord Nick Stern,
51:28 who is also serving with me and the IMF
51:34 on the High-Level Advisory Group
51:39 on Sustainable and Inclusive Recovery and Growth.
51:42 And, of course, he is a well-known climate and development expert.
51:45 So, Nick, if I can just start our discussion today
51:48 by asking you a very big question which is around climate and development.
51:54 We know the IPCC report has once again raised the urgency of the climate crisis,
51:59 but developing countries are facing development challenges
52:03 accentuated by COVID-19 and now with the Ukraine war.
52:06 How can we really integrate climate and development
52:09 and how can we really scale up the financing that's needed?
52:13 [WASHINGTON, DC, USA] [WEST SUSSEX, UK]
52:14 [Lord Nicholas Stern] Thank you, Mari, very much for your leadership.
52:18 The IPCC report is clear and strong.
52:21 Each one that comes through is more worrying than the one that came before
52:25 as the evidence accumulates and accumulates.
52:28 We're headed for something closer to three degrees than two degrees.
52:32 We haven't been at three degrees for three million years.
52:35 The sea levels would be 10 to 20 meters higher,
52:39 threatening our coastal cities and habitations
52:43 in a very deep and difficult way.
52:46 We would risk extreme events which would, together with those long onset stories,
52:53 would push hundreds of millions, perhaps billions to move.
52:57 Let's be very clear about the scale of the risks
52:59 and that we have to act very quickly and strongly
53:02 starting now, in this decade,
53:04 if we are to be able to handle those risks in a way that could be acceptable.
53:10 Poor people, of course, are hit earliest and hardest.
53:13 So what do we have to do?
53:14 Well, we have to invest strongly in doing things differently.
53:18 What things? Particularly the energy sector.
53:21 We have to put in place a big transition, and we have to do it now.
53:25 Of course, exiting coal, moving away from coal,
53:29 absolutely core part of that, it's the lowest hanging fruit.
53:33 That will involve a great deal of investment
53:35 but we're going to have to adapt also as we do this,
53:38 and we're going to have to invest in our natural capital as well.
53:42 Fortunately, if we put all those things together,
53:45 the investment in emissions reductions and the new energy story,
53:49 if we adapt, if we invest in our natural capital,
53:53 we have a new model of development much more attractive
53:57 than the dirty, destructive one that went before.
54:00 We have cities where we can move and breathe,
54:03 much more efficient use of all our resources
54:05 ecosystems which are robust and fruitful.
54:07 It's a new model of development and it's in our hands,
54:10 but we have to invest to get there.
54:12 How much?
54:13 Well, in emerging markets and developing economies,
54:16 perhaps 1.5 to 2 trillion dollars a year extra by 2030,
54:21 perfectly possible from the point of view of world macro
54:24 and past historical rates of investment.
54:28 But a major increase in investment,
54:31 that 1.5 to 2 trillion dollars a year in 2030 or by 2030
54:39 would have to be financed domestically and internationally,
54:44 perhaps internationally,
54:45 something close to a trillion dollars a year extra.
54:49 Big majority private sector,
54:51 but that will be enabled by public sector resources which come,
54:56 or financial resources which come with it and combine together.
55:00 We have to reduce, share, manage risk in a way that allows the private sector
55:05 to come in and brings down the cost of capital.
55:08 Clearly, the MDB's have a crucial role.
55:11 So also the bilaterals with their concessional finance
55:14 and of course, philanthropy, which although would be smaller in scale,
55:18 can reach the parts that others can't reach.
55:20 There the just transition and investing
55:23 in people and places who were intensive in fossil fuels,
55:26 that can play an important part as well as could voluntary carbon markets.
55:32 [Mari Pangestu] Thanks for that very sobering but realistic picture,
55:36 but also identifying the opportunities.
55:38 Another realism that we are facing today is, of course, the Ukraine war,
55:43 its impact on high energy prices
55:46 and increased concerns around energy security.
55:49 You identified energy transition
55:52 as one of the really urgent areas that we have to discuss.
55:56 When you see the drivers that are happening now,
55:59 how do you see us moving forward
56:02 if we want to still continue to accelerate energy transition?
56:08 [Lord Nicholas Stern] Energy security is very important,
56:11 and we've seen it in the past in the crises of the 1970s
56:16 and the right thing to do is to move away faster and harder from fossil fuels
56:21 and to increase strongly energy efficiency.
56:25 Actually, now our options for moving harder and faster away from fossil fuels
56:31 are much bigger than they were in the 1970s,
56:34 because renewables and storage have proceeded so strongly.
56:37 So that's the strategy.
56:39 The implementation of the strategy means, of course, recasting energy supply.
56:46 It means much bigger capacity for electricity
56:51 because so much of this story is going to be around electricity
56:55 in terms of, of course, power itself,
56:57 in terms of transportation, in terms of heating homes and so on.
57:02 We have to invest on the supply side and we have to encourage the demand side,
57:07 so it moves towards electrification
57:10 and, of course, much greater energy efficiency.
57:13 That's the delivery challenge.
57:15 How do we get that to move?
57:17 The right kind of policies have to be put in place,
57:20 including abolition of fossil fuel subsidies,
57:22 the advancement of carbon pricing
57:24 but clarity on time scales for decentralization of the grid,
57:28 and on time scales for stopping the sale
57:31 of the internal combustion engine vehicles and so on.
57:35 Making sure that the sense of direction is clear in those ways,
57:39 but also enabling, in a much more efficient way,
57:43 the solution of problems and difficulties inevitably arise as we move into delivery.
57:49 Of course, reforming domestic financial systems
57:52 and getting the flows of finance right, as I described just now.
57:56 That's the essence of what we call the country platform approach.
58:00 And through its climate change development reviews,
58:03 I do believe that the World Bank is moving in a positive way in that direction.
58:10 [Mari Pangestu] Thanks, Nick.
58:12 I think the reality is we may still see a little bit of a slowdown,
58:16 but at the same time, we hope that accelerating energy transition
58:21 is actually part of energy security, as you emphasize,
58:25 really a complimentary part of energy security.
58:28 Now let's take a more forward look.
58:31 We are heading now into the COP27.
58:35 It just happens the chair this year is Egypt, which is a developing country.
58:40 It's really a really good opportunity
58:42 to look at how can we really deliver on climate and development.
58:47 As we heard from Minister Rania earlier, they are focusing on implementation
58:52 as well as on adaptation and resilience.
58:56 The big question out there, which is the financing.
58:59 I was in Egypt recently and I was very encouraged to see
59:04 the commitment of the Egyptian government on the climate agenda
59:07 and their preparations for the COP27.
59:10 If I can ask you to take a kind of a forward look and see
59:14 what are some of the ideas that we can take forward to help
59:17 think through the delivery on implementation and the actions
59:22 that can really integrate the climate and development agenda
59:27 and then deliver on it, especially the financing side.
59:30 If you could say a little bit more about the role of the private sector
59:35 that would really also be really helpful.
59:38 [Lord Nicholas Stern] Thank you very much, Mari.
59:41 We're looking forward very much to the leadership in COP27 of Egypt.
59:46 They really are, as you know, from your visit, Mari,
59:48 putting in place what's necessary, emphasizing that this is a delivery COP.
59:53 COP26 was very good in setting a roadmap, setting the targets,
59:57 the private sector involvement, the commitment to net zero,
01:00:00 the rising place of adaptation, natural capital and so on.
01:00:07 But COP27 is the delivery COP,
01:00:09 and that is very clear with our Egyptian friends and in their leadership.
01:00:13 And of course, it's an African COP.
01:00:16 In the priorities that we see on that delivery,
01:00:19 surely the energy transition is very clearly there
01:00:23 as one of the key priorities.
01:00:25 Adaptation and resilience,
01:00:27 we've seen how devastating climate change can be already with us,
01:00:31 and it's going to get more difficult.
01:00:33 So adaptation and resilience would be a second important priority,
01:00:38 integrating, adaptation, resilience with emissions reductions as we can,
01:00:43 through decentralized solar, through public transport,
01:00:46 through mangroves and so on.
01:00:49 We can put mitigation adaptation development together and we must
01:00:53 And of course, finance.
01:00:55 I've already indicated the scale of finance that we need.
01:00:58 It's going to be critical to advance of commitment, advance of ambition.
01:01:04 In that finance story, the private finance is going to be at center stage.
01:01:12 But it will require reduction of risk, sharing of risk, management of risk.
01:01:18 And in that story then, the combination with the bilaterals
01:01:24 and the concessional money they can bring, the MDB with the lower cost of capital
01:01:28 and the skills they can bring in the management of risk
01:01:30 are going to be enormously important,
01:01:32 as will the philanthropy and the voluntary carbon markets.
01:01:35 Second part of delivery is getting behind those countries which are already making
01:01:41 strong moves and putting their country platforms in place.
01:01:44 I think particularly of South Africa, which has worked so hard
01:01:48 to get a clear plan for transforming the economy in place.
01:01:52 But other countries too.
01:01:53 Indonesia, India and Vietnam are all moving very strongly.
01:01:58 So countries that are coming forward, those are just examples.
01:02:00 Other countries that are coming forward,
01:02:02 we have to get behind them in the delivery story
01:02:05 to show in those specific cases
01:02:07 that the world is ready to get behind their investments.
01:02:11 That means a combination of public sector and private sector
01:02:16 in the management sharing and a reduction of risk
01:02:19 that will be critical to bringing down the cost of capital.
01:02:25 [Mari Pangestu] Thanks, Nick.
01:02:26 I think my two takeaways from that is getting behind countries
01:02:31 and supporting them to come up with
01:02:33 the enabling environment for funding to come in
01:02:36 and the climate change and development reports that we are preparing.
01:02:40 This is going to be part of the support we're giving.
01:02:43 You heard Minister Rania mentioned that specifically in the case of Egypt.
01:02:47 Then second, how do we have different sources of funding,
01:02:52 public and most importantly private,
01:02:54 because a large amount of funding is going to have to come from private sector.
01:02:57 I think this is our collective homework.
01:03:01 The international community as well as working with countries
01:03:04 because it has to be country led and country owned
01:03:07 to really put together the financing that's needed,
01:03:11 whether it's the energy transition or the adaptation and resilience.
01:03:15 So thanks again, Nick.
01:03:18 The process is going to continue and we look forward
01:03:21 to continued conversations with you and our work with the HLAG.
01:03:26 Let me thank you, everybody.
01:03:28 Also now give it back to Meriem.
01:03:32 [Meriem Gray] People have been sharing their thoughts
01:03:35 on this event online and on social media.
01:03:38 I'm now joined by my friend and colleague Sri Sridhar,
01:03:42 who has been following this conversation throughout.
01:03:45 [Srimathi Sridhar, Communications Officer, World Bank Group]
01:03:46 Sri, tell us what stood out for you.
01:03:47 [Sri Sridhar] Thanks Meriem and great to see you.
01:03:49 We have people joining us from all over the world today again,
01:03:52 including India, Nigeria, Kenya, Venezuela, Spain,
01:03:57 the United Kingdom, France, Saudi Arabia, Indonesia, and also the United States.
01:04:02 They're, of course,
01:04:03 using the hashtag for today's event, which is #Finance4Climate.
01:04:07 They're joining us on Twitter, Facebook, LinkedIn, as well as Instagram.
01:04:11 They're talking about the need for climate action
01:04:14 and how the private sector and green investments are needed
01:04:17 to make communities more resilient to climate change.
01:04:20 Why don't we take a look at some comments
01:04:22 that have been coming in on our social channels.
01:04:24 First, on Twitter, we've got Wambi Peter from Uganda
01:04:27 saying that "a sustainable future requires large scale,
01:04:31 low-carbon investments that can help communities build long-lasting resilience."
01:04:36 We next have a comment coming up
01:04:38 on LinkedIn from Tomi, who says that "getting to net-zero
01:04:42 will not be easy or without cost
01:04:44 and will need to go hand in hand with other objectives,
01:04:47 like economic development and increasing energy access."
01:04:52 Finally, a comment coming in on our Facebook channel
01:04:56 from Tamba in Sierra Leone, who says that "a huge amount of money
01:04:59 can enable change but until we learn
01:05:01 to control our activities to avoid environmental degradation,
01:05:05 this issue can and will always call for more funds."
01:05:09 It's really great to see this engagement coming in on our channels.
01:05:12 [Meriem Gray] Great. Thank you.
01:05:13 I think this is where the drum roll should come in.
01:05:17 I understand you have the results of our quiz.
01:05:21 [Sri Sridhar] Yes. We have a quiz today which asks
01:05:24 how much investment is needed each year to limit global warming, boost resilience,
01:05:29 and support global transition to net zero emissions?
01:05:33 Our four options here are A, is it about 10 billion dollars a year,
01:05:37 B, about 100 billion dollars a year,
01:05:40 C, about a trillion dollars a year, or D, is it more than that?
01:05:44 Is it more than 2 trillion a year?
01:05:46 There is a right or wrong answer.
01:05:48 Before we get to that, Meriem, what do you think the answer is?
01:05:52 [Meriem Gray] I was going to go with C, about 1 trillion dollars a year.
01:05:57 [Sri Sridhar] Okay. Well, shall we see what the results are?
01:06:00 Just to know, we had nearly 2000 people take part in today's quiz.
01:06:04 You'll see here, 11% think that it's about 10 billion dollars a year,
01:06:08 29% think about 100 billion dollars a year,
01:06:12 28% about a trillion dollars a year,
01:06:15 and finally, most people think, with 32%,
01:06:17 that it's D, more than 2 trillion dollars a year.
01:06:20 And guess what, Meriem? They're right.
01:06:22 D is the right answer.
01:06:24 [Meriem Gray] The numbers really do add up.
01:06:27 Thank you so much, Sri. Thank you for joining us.
01:06:32 [ST. GALLEN, SWITZERLAND] [David] Hi. I'm David in Switzerland
01:06:34 and you're watching the World Bank Groups-IMF Spring Meetings.
01:06:42 [Meriem Gray] Auguste Kouame, Country Director for the World Bank in Turkey,
01:06:45 and Hania Dawood, Manager of the Climate Business Department at IFC,
01:06:50 have joined me here in the World Bank atrium.
01:06:53 In a moment, they will be answering some of the questions you've been asking.
01:06:59 But first, let's recap the main points we've heard in the past hour
01:07:03 on how we can finance effective climate action.
01:07:07 We have heard that addressing climate change and development together
01:07:12 is a complex exercise that needs to go
01:07:14 from high level commitment to real, tangible action.
01:07:19 For the low-carbon resilient transition, the world needs large-scale investments.
01:07:25 Financing this transition will require continue to create enabling environments,
01:07:30 leverage different pools of capital,
01:07:31 and ensure that affected communities have a voice.
01:07:35 Now let's hear from Auguste and Hania,
01:07:39 welcome, and thank you for joining us live.
01:07:41 My first question will be to both of you.
01:07:45 This is probably one of the most voted questions from the audience.
01:07:49 How can we institutionalize climate action?
01:07:54 Let's go to Auguste first.
01:07:55 [Auguste Kouame] Thank you, Meriem. Let me start by saying
01:07:58 that climate action and development are intertwined.
01:08:03 In fact, there is symbiosis and synergy between the two.
01:08:06 It makes full sense to institutionalize climate change
01:08:09 [Auguste Kouame, Turkey Country Director, World Bank]
01:08:11 when we talk about development.
01:08:13 We know that development without climate change action
01:08:17 can push up to 132 million people into poverty,
01:08:22 in addition to the several hundred millions of people
01:08:26 who are already poor today.
01:08:28 We also know that good climate action
01:08:30 can actually create development growth and poverty reduction.
01:08:35 At the country level, what does it mean to institutionalize?
01:08:38 What we think is that when governments are planning
01:08:42 their development and growth and the poverty reduction strategies,
01:08:45 climate change should be at the heart of it.
01:08:48 When they're planning actions across governments
01:08:51 they can look at it from the climate change angle
01:08:54 so that there is a whole of government approach.
01:08:57 There is an economy wide approach to climate change.
01:09:01 At the Bank level what we're trying to do is,
01:09:04 as you have seen, the new climate change action plan
01:09:09 put climate change at the heart of the Bank's work
01:09:12 at the same level as poverty reduction, inclusion and equity.
01:09:17 We're going beyond the project approach
01:09:20 to looking at climate in the country strategy as a program approach.
01:09:26 The Bank has also introduced the Country Climate Development Report,
01:09:33 the CCDR, which is a core diagnostic
01:09:37 that allows us to help to work with countries without us flying blind.
01:09:42 It gives us an understanding of the countries' climate change
01:09:47 and development issues in an integrated fashion.
01:09:51 We can help countries
01:09:53 not only implement good program, but also upgrade the NDCs.
01:09:59 The Nationally Determined Contributions help them prepare long-term strategies
01:10:04 to achieve net-zero, help countries boost their capacity
01:10:08 to be more resilient to climate change, make their population and their economies
01:10:14 more resilient, therefore support the adaptation agenda.
01:10:18 What it also means at a global level
01:10:21 is we know that no single country can address climate change alone.
01:10:25 It is everybody's business, it is every country's business.
01:10:28 There is also an opportunity here to institutionalize climate change
01:10:33 in international cooperation, in international development.
01:10:37 When countries are helping each other, when we are helping the world address
01:10:43 [LIVE: YOUR QUESTIONS ANSWERED] big issues such as COVID-19
01:10:46 or the impact of the war in Ukraine or high inflation today,
01:10:50 we do that with climate change at the heart of the action
01:10:54 so that we don't solve the problem
01:10:57 whilst creating another one for the future generations.
01:11:01 [Meriem Gray] Thank you, Auguste. Let me take it to Hania.
01:11:03 Hania, what does the private sector have to offer
01:11:07 and how can the private help to institutionalize climate action?
01:11:12 [Hania Dawood] Thank you, Meriem.
01:11:15 Climate change is a collective action problem on steroids
01:11:19 [Hania Dawood, Manager, CBG, Climate Strategy and Business Development, IFC]
01:11:21 and climate action is a global public good.
01:11:23 As Auguste said, governments and nations need to come together.
01:11:27 The private sector needs to act and we have a role as individuals to play.
01:11:32 I agree with everything that Auguste said.
01:11:35 I will add three more things.
01:11:37 One, what gets measured gets done.
01:11:41 Data about emissions is integral about the baseline of emissions
01:11:45 and about the trajectory of emissions.
01:11:48 This is important at the country level and at the company level.
01:11:53 Why is that? If we know which sectors and which sub-sectors
01:11:58 contribute most to climate change,
01:12:00 if we know what part of a company's value chain
01:12:04 is responsible for climate change, we can prioritize action
01:12:08 and we can concretely identify areas and where we need to channel money.
01:12:14 Secondly, commitments matter and what gets committed to, gets done.
01:12:19 We're seeing countries commit to ambitious NDCs,
01:12:23 the private sector at an unprecedented level
01:12:26 is committing to net-zero targets, which is extremely exciting,
01:12:31 and for us here at the World Bank,
01:12:33 we increased our commitment to 35%
01:12:36 of our entire commitment towards climate action,
01:12:41 and to also align with the Paris Agreement.
01:12:44 Now, commitments are great,
01:12:46 but what really matters is to operationalize these commitments
01:12:49 and to come up with concrete plans and move from rhetoric to action.
01:12:54 My third point is our votes matter.
01:12:58 It's really inspiring to see the youth engaged in this debate.
01:13:03 This holds policymakers and the private sector accountable.
01:13:08 Shareholders are also voting with their dollars
01:13:11 and are demanding that companies
01:13:13 and their investments do what's right for action.
01:13:16 What's great is that much of this is already in play and in progress.
01:13:21 What is really needed is to move from ambitious, from ambition to action
01:13:26 and to really start to operationalize and make concrete plans.
01:13:31 [Meriem Gray] Thank you. So our next question is from Eswatini.
01:13:35 Temba Twala has actually sent us a video. Let's take a listen.
01:13:40 [Temba Twala] Good day. My name is Temba Twala.
01:13:43 I'm from the Kingdom of Eswatini.
01:13:46 My question is, how can developing countries like Eswatini,
01:13:51 formerly known as Swaziland,
01:13:52 juggle between tackling immediate problems like abstract poverty and climate change?
01:13:58 How do we ensure that our efforts are actually effective and efficient
01:14:03 balancing between development and reducing climate change?
01:14:14 [Meriem Gray] A great question from Temba Twala. Let me repeat it.
01:14:19 How can countries balance climate action and development challenges?
01:14:23 Let's go to August first.
01:14:25 [Auguste Kouame] Thank you very much, Temba, for this question.
01:14:28 It is very clear that the poorest countries
01:14:31 are the most impacted by climate change,
01:14:34 and unfortunately, they contributed the least
01:14:37 to the causes of climate change today.
01:14:39 They contributed the least to CO2 emissions,
01:14:42 and within countries, the poorest are actually suffering the most.
01:14:47 However, countries, regardless of their level of development today,
01:14:52 do not have the option of addressing development
01:14:58 in a high-carbon intensity way and postponing actions that will increase
01:15:04 the adaptation or resilience to the impact of climate change.
01:15:09 It has to be done jointly.
01:15:12 The good news is that now the tension we used to see
01:15:18 between development and climate change is disappearing.
01:15:21 First, because the cost of adopting technologies
01:15:26 that are greener has gone down
01:15:29 and therefore, it is possible to actually find development solutions
01:15:36 that are affordable whilst being totally consistent with climate change.
01:15:42 Second, we have also learned that when countries take climate action
01:15:47 to increase their adaptation and their resilience,
01:15:49 this also creates growth, it creates poverty reduction.
01:15:53 It is very inclusive since we know
01:15:55 that the impact of lack of adaptation is worse for the poor.
01:15:59 When you invest in adaptation,
01:16:00 you're actually implementing inclusive and progressive policies
01:16:05 that benefit the poorest the most.
01:16:07 We also know that the international community
01:16:09 is now committed more to climate change and developing countries
01:16:13 receiving support financially from developed countries.
01:16:17 This financing, if packaged well together, can actually reorient
01:16:23 a lot of the development financing towards climate action.
01:16:27 Let me give you an example of how a country can take
01:16:31 one portion of development activity and transform it into a climate action,
01:16:36 both for mitigation and adaptation.
01:16:39 Take forestry in Turkey, the country where I work.
01:16:43 Forestry, we know is a carbon sink.
01:16:47 It helps the mitigation agenda, it helps absorb CO2 from the air.
01:16:52 When you invest in forestry, you're actually investing in mitigation.
01:16:55 You are also investing in adaptation
01:16:57 because forestry can help reduce landslides,
01:17:01 it can help retain soil, it can help make the poor less vulnerable.
01:17:05 By doing that, you're also doing development
01:17:08 because you're creating jobs in the forest sector.
01:17:11 You're creating opportunities for the rural sector.
01:17:15 You're also investing in food.
01:17:17 As we saw today, the impact of the war in Ukraine
01:17:21 can put a lot of pressure on prices because of a reduced supply of food.
01:17:27 So when you invest in forestry, you can also increase the potential
01:17:31 of the agriculture sector to help address this kind of food scarcity.
01:17:36 So just one example to show that poverty reduction,
01:17:40 development and growth are not contradictory.
01:17:44 It's not orthogonal to climate change.
01:17:46 In fact, the two go together.
01:17:48 Our advice is countries can think of climate action as development.
01:17:56 Doing climate action is doing development.
01:17:58 If you want to do poverty reduction, do it through climate action.
01:18:01 [Meriem Gray] Great. Thank you. My next question is for Hania.
01:18:06 How can private companies tackle both poverty and climate?
01:18:12 [Hania Dawood] Such an important question. because, as Auguste said,
01:18:19 the world's poorest countries are the most impacted by climate change
01:18:24 by form of hurricanes, flooding, but they contribute least to it.
01:18:30 At the same time, it's integral to integrate climate and development.
01:18:38 We need to continue to invest in economies and their private sectors
01:18:42 to continue to create jobs.
01:18:46 What is the role of the private sector?
01:18:48 It's to create jobs and it's to innovate.
01:18:51 The IEA estimates that 30 million jobs can be created by 2030
01:18:57 just as part of the energy transition.
01:18:59 Innovation.
01:19:00 The private sector needs to drive innovation.
01:19:03 It needs to drive innovation in, for example, climate-smart solutions
01:19:08 focusing on the agribusiness sectors that help farmers improve
01:19:12 their fertilization, their irrigation techniques.
01:19:17 The private sector can drive innovations and technologies that help
01:19:21 with better weather patterning and satellite imaging
01:19:26 so that information is disseminated quickly
01:19:29 to the world's poorest so that they can act faster.
01:19:33 Then lastly, the private sector can invest in natural capital,
01:19:38 which form the basis of ecosystems that also are integral to the poor.
01:19:45 [Meriem Grey] Thank you so much for joining us live today.
01:19:50 If you have any comments from the Spring Meetings,
01:19:53 you can share them using #ResilientFuture.
01:19:57 [#RESILIENTFUTURE]
01:19:58 Finally, as it is now a tradition at these events,
01:20:01 we asked our Connect for Climate colleagues to share with us
01:20:05 what young activists, students and champions
01:20:08 want to see happen on this agenda.
01:20:10 C4C was on the ground at MENA Climate Week
01:20:14 and here is what they heard about
01:20:16 what young people are looking to change on climate action at COP27 in November.
01:20:23 [Rania Al-Mashat, Minister of International Cooperation, Egypt]
01:20:25 We're very happy Egypt is going to be leading the COP27
01:20:28 in Sharm El-Sheikh in November.
01:20:30 [LOOKING AHEAD TO COP27]
01:20:31 [Mari Pangestu, Managing Director of Development Policy and Partnerships, WBG]
01:20:32 COP27 is the opportunity to go from declaration to implementation.
01:20:37 [Federica Fricano, Director for International Climate Action, Ministry for Ecological Transition, Italy]
01:20:38 COP27 is our chance to revisiting the ambition and filling the gap.
01:20:43 [Neeshad Shafi, Co-founder, Arab Youth Climate Movement Qatar]
01:20:44 COP27 is our chance or Middle East countries to enhance their climate action.
01:20:47 [Deena Mariyam, Member, YOUNGO] To uplift the region that has been neglected.
01:20:49 [Elizabeth Gulugulu, Global South Focal Point, UNFCCC Children and Youth Constituency]
01:20:50 To show we are implementers of the Paris Agreement.
01:20:52 [Princess Abze Djigma, Chair, H.R.H. Princess Abze Djigma Foundation]
01:20:54 Now it's about mobilizing finance because we need trillions.
01:20:57 It's not about billions.
01:20:58 [Elizabeth Curmi, Director, Global Thematic Analyst, Citi]
01:20:59 This year it's taking place in Egypt so we have to make sure
01:21:01 that emerging markets are well represented.
01:21:04 [Keith Tuffley, Vice Chairman, Global Co-Head, Sustainability & Corporate Transition, Citi]
01:21:05 We cannot possibly solve global climate change
01:21:07 without creating the right environments
01:21:08 for capital to move towards the emerging markets.
01:21:11 [Rania Al Mashat] For the trillions to make their way on the ground,
01:21:15 we need to be able to decipher what we mean by derisking and blended instruments.
01:21:21 So we look forward to working with all our partners to see
01:21:24 how we can actually move from commitments to implementation.
01:21:29 [Nigel Topping, UN High-Level Climate Action Champion]
01:21:30 At COP27, we need to get much more granular about solutions
01:21:34 to the needs of the most vulnerable communities.
01:21:36 [Hatim Aznague, Youth4Climate Delegate, Morocco]
01:21:37 We need accountability at COP27.
01:21:39 [Hoor Ahli, Youth4Climate Delegate, UAE]
01:21:40 We need to ensure collective action at COP27
01:21:42 because this determines the life of my generation and future generations.
01:21:46 [Amal Ridene, Tunisian Young Climate Change Negotiator]
01:21:47 It is important that all the parties get to join the conversation.
01:21:50 [Rania Al-Mashat] It includes not just the private sector
01:21:51 and civil society and governments and multilateral development banks,
01:21:56 but youth are extremely important in this equation.
01:22:00 [Rand Alkhushman, Founder, Green for Jordan Initiative]
01:22:01 In COP27, I really hope that young people will be more involved.
01:22:05 [Disha Sasrkar, YOUNGO ACE Contact Point]
01:22:06 Youth have to be at the center of this kind of implementation.
01:22:08 [Mohamed Maray Mohamed Elshikhi, Co-founder, MENA Youth Network]
01:22:09 The youth engagement, we have to take it to the next level.
01:22:12 [Selma Bichbich, Member, YOUNGO]
01:22:13 Trusting us does work and we want to prove that at COP27.
01:22:15 [Reem Al Saffar, 2022 Max Thabiso Edkins Climate Ambassador]
01:22:16 Because young people are our region's greatest resource.
01:22:19 [Ferid Belhaj, Vice President for Middle East and North Africa, World Bank]
01:22:20 On the road to COP27, we need the youth
01:22:22 because whatever we do today for COP27 and COP28 will be for them.
01:22:28 [Xan Northcott, Global North Focal Point, UNFCCC Children and Youth Constituency]
01:22:29 We'll be working tirelessly to make sure
01:22:30 that as many young people will be trained and prepared
01:22:34 to meaningfully participate and collaborate
01:22:36 with the parties and governments at COP.
01:22:38 [Rania Al-Mashat] We look forward to welcoming all of you in Sharm El-Sheikh.
01:22:41 [WORLD BANK GROUP] [CONNECT4CLIMATE]
01:22:45 [Meriem Gray] Young climate activists demand action and inspire hope.
01:22:49 Climate change impacts everyone, but the future belongs to young people
01:22:53 and it is great to meet some of the young activists on the front lines.
01:22:56 [COMING UP] [AVAILABLE FOR REPLAY]
01:22:58 You can re watch this event as well as previous ones
01:23:01 on the potential of the digital revolution
01:23:04 and discussion between the leaders of the World Bank Group and IMF
01:23:07 on responding to global shocks.
01:23:10 Stay with us all week for more high-level discussions
01:23:13 on the most pressing challenges in development today.
01:23:16 Tomorrow we will be bringing you two more events.
01:23:19 The first is about rising fragility
01:23:22 and then we'll be focusing on how to preserve open trade.
01:23:25 We will be wrapping up these meetings on Saturday
01:23:28 by exploring how we can reverse the losses in human capital.
01:23:33 You can watch all of that at live.worldbank.org.
01:23:37 Thank you for being with us today. We hope you enjoyed this program.
01:23:41 We really wanted to bring you different perspectives,
01:23:44 tangible solutions that are helping us to finance climate action
01:23:48 for a green, resilient and inclusive future.
01:23:51 Goodbye for now.

Live chat with

David Groves

Lead Climate Change Specialist, Climate Change Group, World Bank

For this Q&A, a great number of questions were submitted in advance. We asked the audience to help us select the questions that should be put to our experts. The star symbol ✮ indicates the most upvoted submissions.

Donna Barne (Moderator) Welcome everyone! I’m Donna Barne. I am here to moderate this chat and share the highlights of the event. Our technical expert, David Groves, will answer as many of your questions as he can.

Please tell us what brings you here today and why are you interested in this topic. Post your questions below.

Our technical expert David Groves is answering your questions in real-time in this chat.

✮ WILLARD Phinifolo What economic approach is needed to achieve the sustainable future for better planet and the people?

David Groves / World Bank @Willard: The World Bank Group sees global development and sustainability challenges as highly interconnected. In recognition of this, the World Bank Group has adopted a new development approach called Green, Resilient, and Inclusive Development, or GRID. GRID departs from previous development strategies in that it promotes economic growth that goes hand in hand with environmental goals and inclusion. Pursuing the twin goals of poverty eradication and shared prosperity with a sustainability lens, the GRID approach addresses the risks to people, the planet, and the economy in an integrated manner that is tailored to country needs and objectives. It sets a path that achieves lasting economic progress that is shared across the population, providing a robust recovery, and restoring momentum on the Sustainable Development Goals (SDGs). In practice, this means that Bank now supports development that is environmentally sustainable, resilient to a changing climate and world, and designed to be broadly inclusive across our client countries.

Donna Barne (Moderator) As our video says, each country is different, but all countries need to tackle the climate crisis. How can private capital be unlocked to support climate action in developing countries?

Coal continues to be the world’s most dominant source of energy and a major cause of greenhouse gas emissions warming the planet. The United Nations Framework Convention on Climate Change has warned that if not phased out before 2040, coal will push the world closer to climate change catastrophe.

The experience of Europe and the United States has shown that the shift from coal can take decades, and present not only economic and employment challenges, but social and cultural ones. Learn more

✮ Sheriff Ceesay How can Green bonds be used as an effective tool for managing climate risk in Africa

David Groves / World Bank @Sheriff: Green bonds are financial instruments that fund green projects and provide investors with regular or fixed income payments. Green bonds help channel finance from capital markets and investors to green projects and sustainable development. IFC is a green bond pioneer in a market that is growing quickly in response to strong demand from investors seeking a platform to engage in good practices while hedging climate risks. IFC’s AAA-rated green bonds program combines an attractive investment proposition with an opportunity to support climate-related projects in developing and emerging economies, including those in Africa. So, in short, green bonds can help channel financing to projects in Africa that yield economic benefits and increase climate resilience in Africa.

Donna Barne (Moderator) Through its Climate Change Action Plan, the World Bank is working with coal-producing countries of all sizes to help national, regional, and local governments develop clear roadmaps to phase out coal, protect workers, their families, communities, and the environment while also supporting investments in energy efficiency, low-carbon and renewable energy. Learn more

✮ Thankappan.K.G. How the youth population of the world can be brought under a comprehensive action ,through inclusive growth, to work for a green world, by providing them employment?

David Groves / World Bank @Thankappan.K.G.: Good, inclusive jobs are the surest pathway out of poverty. A productive private sector that operates on a level playing field - one that provides jobs for all walks of society - is key to ending extreme poverty and boosting shared prosperity. To tackle the jobs crisis and engage the youth population, governments in developing countries need to address two main challenges. First, they need to create better jobs that increase productivity and earnings for the growing workforce. Second, they need to support access to better jobs for disadvantaged groups.

Donna Barne (Moderator) Have a question? Our technical expert David Groves is answering your questions in real-time. Ask yours in this chat.

Percy Lekoba Is financing of climate projects in low income countries treated the same way as for projects in middle income and high income countries? Is the process of unlocking private finance for climate action in the above mentioned groups of countries the same?

David Groves / World Bank @Percy: Financing is and will be needed in all countries to address climate issues, but the barriers are different for low income countries. At the World Bank Group, the International Development Association (IDA) provides the world's poorest countries with zero to low-interest loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions. In contrast, middle and high income countries have greater access to credit and do not need such concessional finance.

✮ Narit Hong To finance for climate actions it is very often that we, particularly developing countries, need to balance between the incentives given to private sector in their investment and their shared climate contributions. In this relation, what is an appropriate mechanism for the private sector to responsively and rationally contribute their share for the climate action(s).

David Groves / World Bank @Narit: Addressing climate change will require trillions of dollars of investment per year, and the vast majority will need to come from the private sector. So developing ways to incentivize the participation of the private sector is critical. The recent World Bank report, Transformative Climate Finance, describes eight ways policy-makers can drive clean, resilient growth -- through project-based investments, financial sector reform, fiscal policy, sectoral policies, trade policy, innovation, carbon markets, and climate intelligence products such as climate vulnerability maps and early warning technologies. Multilateral development banks like the World Bank Group can help through programs such as Scaling Solar, which lays the groundwork for photovoltaic plant development while also providing financing and other tools and services to make solar development easier and more affordable in developing countries. Scaling Solar aims to streamline the solar development process and reduce risks for governments and private investors looking to expand access to renewable energy.

Donna Barne (Moderator) Now stay tuned for a conversation on the future of climate finance: How can climate and development become more integrated, and how can finance more effectively drive climate action?

Mari Pangestu, the Managing Director of Development Policy and Partnerships at the World Bank, will discuss this topic with Lord Nicholas Stern, Professor of Economics and Government and the Chairman of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

The latest IPCC report says that immediate and deep emissions reductions are needed to limit global warming to 1.5 degrees Celsius. Learn more

The next global climate change meeting – COP27 – takes place in Sharm El-Sheikh, Egypt, in November. Learn more

Gaga Severio Natural calamities do happen now and then, why don't we subject it usual budget planning and management

David Groves / World Bank @Gaga: Developing countries are particularly vulnerable to natural calamities (or disasters) and climate change will increase this vulnerability. In response, the World Bank has steadily increased support for disaster risk management over the past seven years – from $3.5 billion in 2012 to $4.6 billion in 2019. The Bank’s help has included a range of financial instruments for countries frequently threatened by natural hazards such as cyclones or hurricanes, as well as projects to strengthen infrastructure (see www.worldbank.org). In some cases, direct investment in more resilient infrastructure is warranted. In others, instruments such as disaster risk insurance is most appropriate. For example, in the Philippines, the World Bank's support to help insure risks to typhoons and earthquakes (currently $400 million of risk covered by international reinsurers) has provided significant tangible benefits. You can read about these benefits here: blogs.worldbank.org

Donna Barne (Moderator) Haven’t taken our quiz yet? There is still time. We will have the results at the end of this event.

Mwilola w. Simon Thanks for the provision of this platform. How can a poor person like me who is located in the rural area, participate in the rebuilding of our climate?

David Groves / World Bank @Mwilola w. Simon: This question is relevant to everyone, as addressing our climate challenges will require everyone to live their lives differently over the coming decades. For you and many people in developing countries, this may mean gaining more financial and physical security and prosperity in a way that is compatible with the environment and takes advantage of the low-carbon innovations that are occuring globally, such as low-cost, clean solar and wind energy. For people in more developed regions, it means making different choices in their mobility, consumption and recycling of products, and energy use (among many other things). People are at the center of new ideas and progress on climate. A few examples of how individuals from low-income countries have made an outsized difference can be seen here: www.worldbank.org and www.worldbank.org

Desalegne Kassahun Africa is not waking up to realize the effect of climate change and its related negative impact, people are underliving status to observe these effects rather than running for the daily piece of bread. So there should be a strong linkage to reduce this poverty and to act as required with developed countries.however the technological readiness criteria are limiting the fund that should be delivered to these countries.Is any chance of easing these criterias?

Akinradewo A.M.Orobola How can we bring together investors and the private sector to participate in the sustainability of our climate change and its finance.?

David Groves / World Bank @Akinradewo: As discussed, trillions of dollars of investment annually will be needed to address climate change. The Bank Group’s private sector arm, IFC, is deploying innovative platforms, creating and strengthening local capital markets and greening domestic financial sectors. These efforts will help generate opportunities for bankable projects and private capital to flow at scale for both mitigation and adaptation.

Akinradewo A.M.Orobola Thank you WBG for #Finance4climate

Donna Barne (Moderator) That wraps up our discussion -- but stay with us. Two representatives from the World Bank Group -- August Kouame, the World Bank Country Director in Turkey, and Hania Dawood, Manager of IFC’s Climate Business Department – are with us live to answer questions from the audience.

Deirdre Appel Hello. My name is Deirdre and I am the Community Manager of the Clearinghouse for Financing Development Data. (www.smartfinance.org) Thanks for the discussion. As access to timely, accurate data will be imperative for mitigation and adaptive measures, how can we make a stronger case for investing in statistical systems (especially in countries most vulnerable) as part of a #resilientfuture?

David Groves / World Bank @Deirdre: We agree that accurate data will be essential to both identifying the opportunities for climate action and monitoring progress towards our goals. As more and more countries make climate commitments, be it on methane reduction, deforestation, or emissions reduction, the need for verifiable baseline data will be critical. The World Bank is investing resources to track and compile development and climate related data and is using these as the basis for our ongoing work. The Climate Change Knowledge Portal (climateknowledgeportal.worldbank.org) is one resource for climate related impacts data available for all countries.

Donna Barne (Moderator) Finally, our closing video is a look ahead to the next global climate change meeting -- COP27 in Egypt – and what it will mean to countries, youth, and the opportunity to move from climate commitments to climate action.

Our thanks to Connect4Climate and the young people who spoke out about the critical role of climate finance in tackling the climate crisis. See what they have to say.

Lance Marshall Is the renewable energy technology technically feasible for powering large cities?

David Groves / World Bank @Lance: Yes, provided that there are approaches to manage its variability. Large-scale solar, wind, and hydropower resources can be scaled to provide power at the level needed to power large cities. Renewable sources that are intermittent (e.g. wind and solar), need to be integrated into a power system that includes other non-intermittent sources or storage.

Dr. Robert Ddamulira Is the discussion recorded? and will this be available at the end of the meeting?

David Groves / World Bank @Robert Yes, the recording will be available shortly.

DeborahJesus-Joel Considering that access to Financial capital has been bottle neck of some sort for businesses in low and middle income countries, why won't world bank bypass intermediary institutions of access to finance, and provide the funds directly to viable businesses in low and middle income countries or nations(LMCs), given that these intermediary institutions, hardly rarely, get funds to targeted end users in LMCs.

David Groves / World Bank @DeborahJesus-Joel: Given the scale of financing needed to address climate and development issues (trillions of dollars per year), the World Bank Group's strategy focuses on relieving the financial bottlenecks to free up private capital rather than replacing private capital that would fund businesses. The World Bank's Multilateral Investment Guarantee Agency (MIGA), for example, promotes cross-border investment in developing countries by providing guarantees (political risk insurance and credit enhancement) to investors and lenders. See: www.miga.org

Dr. Aparna Das What would be the financial mechanisms to address climate change in coastal cities of the subtropics?

Themba Thwala How can developing countries like Swaziland juggle between tackling immediate problems like abject poverty and climate change? How do we ensure that the fight doesn't just with lip service? How do we balance development, particularly foreign direct investment, and reducing carbon footprint?

David Groves / World Bank @Themba This is a question that we get a lot. Unfortunately the poorest people tend to be the most vulnerable to climate change, and climate change thus makes development even more critical. As my colleague Stephane Hallegate explains in a recent blog post: "The World Bank Group’s focus on climate change is not at the expense of development and poverty reduction; instead, it originates in the very concrete risks that climate impacts create for our objective of eradicating extreme poverty (blogs.worldbank.org). Fortunately, we find that in many cases the most cost-effective and timely way to develop is in a way that is sustainable and low carbon-emitting. For example, the least cost and quickest way to electrify rural areas in many developing countries is through renewable sources such as wind and solar (coupled with batteries or other storage approaches), instead of adding capacity to a traditional fossil fuel power plant and building new transmission. We overcome the problem of lip service through strong commitments to support development that alleviate poverty and addresses climate change. The World Bank Group's Climate Action Plan 2021-25 commits the Bank to an average of $25 billion for development that directly addresses climate challenges. As proof of this commitment, the World Bank Group provided $26 billion in climate finance in 2021.

amr.abbate We understood that the pathway to climate change is hard and capital intensive. Don’t you think that the big corporations worldwide should release a percentage of their profits in order to provide a collaboration to national and international institutions (WB, IMF, EU, Countries, etc..) to fund the needed investments?

David Groves / World Bank @Amr.abate: Everyone will need to play a role in addressing the climate challenge. We are focused on helping realign incentives that will encourage private investments that are aligned with green, resilient, and inclusive development.

✮ Mwaka Luguru How can we institutionalize climate action

David Groves / World Bank @lugurumwaka One way to institutionalize climate action is to improve governance at the country level to appropriately account for climate change (both in terms of adaptation and mitigation). All countries will need to prepare their economies, societies, and ecosystems for a hotter and more volatile climate, and this will require particular attention to agriculture, energy systems, water, forestry, land and urban management, and infrastructure in general. Governments will need to increase their policy expertise and implementation capacities across these areas – from supporting the widespread adoption and further development of drought-resistant seeds, sustainable irrigation, increased resilience to grid disruptions and usage spikes in the energy sector, to ensuring that there are sufficient flood plains, forests, and structured urban and peri-urban spaces to withstand increased disaster risks.

Shamim Wasii Nyanda How will this conversation provide a platform and a table for more women and girls to be involved in climate change and the role they have been playing is recognized as well since they are the affected majority?

David Groves / World Bank @shamimshalmah Women and girls are playing a vital role in supporting and leading climate action in their communities. That’s why at the World Bank, we are helping governments, development practitioners, donors, and beneficiaries themselves identify and seize opportunities to make climate action more gender inclusive. Prescribed gender roles still perpetuate inequalities, meaning most women continue to face challenges in accessing information and resources, getting a seat at the table where decisions are made, and receiving an equal share of economic opportunities.

Dr.Madhu Sharma Environment world over is connected ,degradation of environment in one part of earth affects other parts of earth,so it is duty of every citizen of world to take good care of the environment around himself or herself. Dr.madhu Sharma, CDC,Haridwar India

David Groves / World Bank @Dr. Madhu Sharma: We absolutely agree. And this interconnection is one reason that development and poverty alleviation must include climate action as well. If development is unsustainable and harms the environment (either locally or globally) then that environmental impact will lead to greater challenges to the world's poor going forward. We must break this cycle and promote development that reinforces the life sustaining services that the environment provides. This means developing renewable energy sources that don't degrade watersheds or forests, which provide life sustaining services for communities. It means supporting the development of cities that encourage people to live where they work and recreate so as not to minimize impacts of new transportation. The World Bank's Green, Resilient, and Inclusive Development (GRID) approach is a new way that the Bank is ensuring that these concepts are incorporated into our development support.

eli2158micha how the climate change affect the world population

David Groves / World Bank @Eli2158micha: Climate change will affect people in a myriad of ways. A hotter climate will lead to more frequent and more extreme hot days, posing dangers to some, as well as reductions in the number of very cold days, which can reduce needs for heating, but also be accompanied by potentially problematic changes, such as increased ranges of pests. Increased frequency and intensity of natural disasters has already been observed and will continue, threatening millions of people worldwide. Sea level rise, of course, will lead to costly and in some cases existential coastal flooding and inundation. Climate change will unfortunately impact the world's poor the most, as they are both more likely to live in areas vulnerable to natural disasters and change (for example flood plains), and least able to recover from the impact of adverse weather events. The World Bank's Groundswell report (openknowledge.worldbank.org) estimates that climate change, an increasingly potent driver of migration, could force 216 million people across six world regions to move within their countries by 2050. Hotspots of internal climate migration could emerge as early as 2030 and continue to spread and intensify by 2050. The report also finds that immediate and concerted action to reduce global emissions, and support green, inclusive, and resilient development, could reduce the scale of climate migration by as much as 80 percent.

Desalegne Kassahun Africa is not waking up to realize the effect of climate change and its related negative impact, people are underliving status to observe these effects rather than running for the daily piece of bread.So there should be a strong linkage to reduce this poverty and to act as required with developed countries.however the technological readiness criteria are limiting the fund that should be delivered to these countries.Is any chance of easing these criterias?

David Groves / World Bank @Desalegne Kassahun: It is natural for low income individuals and communities to focus on immediate survival needs, even if their actions contribute to environmental degradation or exacerbation of climate change. However, the international development community, in partnership with governments from low-income countries, can help provide opportunities to improve the livelihoods of low income people through more sustainable ways. Fortunately, we are finding that the most effective and least costly development approaches are those that are sustainable and supportive of the economic transitions needed to address climate change. See blogs.worldbank.orgfor some concrete ways that climate policies can contribute to economic growth.

Donna Barne (Moderator) Thanks to all who tuned in!
The recording of the event should be available momentarily on this page.
Learn more about climate finance and the World Bank Group’s work at these links:
- Climate Stories Series
- Climate Explainer Series
- Sustainable Development Series
- Development and a Changing Climate blog
For more information about our work on climate change visit:
- World Bank
- IFC

Podcast

Listen to the 25-min summary

Use the timestamps to browse the main sections of the podcast.

[00:00] Welcome and introduction of the topic
[02:10] COP27 & Egypt: Creating meaningful solutions for the future
[07:56] How to make climate finance tangible and action-oriented
[15:20] Private capital in supporting climate action
[23:27] Transitioning economies, transforming climate
[26:04] Closure and thanks for tuning!

About the Spring Meetings 2022

The Spring Meetings bring together leaders from government, business, international organizations, and civil society, along with a diverse group of experts, to discuss global challenges and the path ahead. Watch the replay of our events dedicated to international development.

Apr. 12: Addressing Challenges
Apr. 19: Responding to Global Shocks
Apr. 20: Opening Press Conference
Apr. 20: The Digital Revolution
Apr. 21: Financing Climate Action
Apr. 21: Support to Ukraine
Apr. 22: Fragility
Apr. 22: Preserving Open Trade
Apr. 23: Human Capital

Available with simultaneous interpretation in Arabic, French and Spanish.

Speakers

David R. Malpass

Former President, World Bank Group
@DavidMalpassWBG
Sri Mulyani Indrawati

Minister of Finance, Indonesia
Makhtar Diop

Managing Director, IFC
@Diop_IFC
Rania Al-Mashat

Minister of Planning, Economic Development & International Cooperation, Egypt
@RaniaAlMashat
Rhian-Mari Thomas

Chief Executive, Green Finance Institute
@RhianMariThomas
Yves Perrier

Chairman of the Board, Amundi
Mari Pangestu

Former World Bank Managing Director of Development Policy and Partnerships
@Mari_Pangestu
Nicholas Stern

IG Patel Professor of Economics and Government, London School of Economics
@lordstern1
Auguste Kouamé

World Bank Country Director for India
Hania Dawood

Manager, Climate Business Development and Strategy, IFC
@haniadawood

Host

Meriem Gray

Communications Lead, Sustainable Development, World Bank
@meriemgray

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