Investing in People and Planet: Financing the Low-carbon, Resilient Transition

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Investing in People and Planet: Financing the Low-carbon, Resilient Transition

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In this time of strained resources and overlapping crises, how can countries get the financing they need to tackle climate change? Investing in People and Planet explored this question in three conversations -- on the potential of carbon markets to mobilize finance; what it will take to bring private sector finance into low-carbon transitions; and the financing needed to achieve net zero.

World Bank Group President David Malpass kicked things off by asking how to create a market that could mobilize enough finance to, for example, help pay for the decommissioning of a coal plant. Annette Nazareth, Chair, Integrity Council for the Voluntary Carbon Markets, said carbon markets are still relatively small and inefficient but that setting a high-quality, universally accepted standard for carbon credits would spur growth: “If you bring integrity to the market, it will scale.” The approval last year of “Article 6” of the Paris Agreement, allowing cooperation across borders, has put carbon markets at an “inflection point,” said Dirk Forrister, President and CEO, International Emissions Trading Association (IETA), “Nobody can get to net zero alone. You're going to need partners. Cooperation on Article 6 is really the only hope the Paris Agreement will work,” he said.

In the next conversation, IFC Managing Director Makhtar Diop spoke with Slawomir Krupa, Head, Global Banking & Investor Solutions at Société Générale, about the potential to crowd in private finance for green transitions in developing countries. Krupa said that while there is “a lot of appetite and a lot of funds to invest in the transition,” investors currently find more opportunities in OECD countries. “The good news is that many emerging countries have the renewable energy sources. How do we make sure  that the available money finds its way to the investment needs?"

In the last panel, World Bank Managing Director for Policy and Partnerships, Mari Pangestu, asked Lord Nicholas Stern what needs to be financed. Stern, the IG Patel Professor of Economics and Government and the London School of Economics, said investment around the world would have to increase by about 3 percentage points of GDP to pay for the energy transition, adaptation and resilience needs and tackle challenges around natural capital. The needs in emerging markets and developing countries could amount to around $2 trillion/year by 2030 (excluding China). “This is necessary to avoid deeply dangerous climate change, and it has to be done at scale and it has to be done now,” said Stern. ”If we do that, then we have in our hands the growth story of the 21st Century.”

The event included a data visualization on climate finance flows, stressing the importance of both supply and demand side interventions to boost climate finance; as well as a short video which showcased how climate interventions in the Sahel could make a huge difference to lives and livelihoods. The event was moderated by Mercy Niwe, Stakeholder Engagement Lead, World Bank Group External and Corporate Relations.

[Mercy Niwe]

Good afternoon from the World Bank Group headquarters in Washington, DC. A warm welcome to everyone joining us in person and online line today for our flagship event, investing in People and Planet.

I’m Mercy Niwe and for the next hour, we'll be focusing on how to scale up climate financing for countries and communities. Policymakers today are facing multiple, overlapping crisis, many of which are the subject of discussions here during our annual meetings. As you know, these include rising poverty and inflation, human development losses, food and energy insecurity which affect the poorest and the most vulnerable. At the same time, climate change is not slowing down. While the climate crisis affects all countries, it does not affect them equally. The world's poorest countries today contribute very little to global emissions, but are most affected by climate change.

All countries need to act on climate, including the middle-income economies that represent a large and growing share of global emissions. What will it take? How can these efforts be financed? In particular, how can we finance those investments that do not easily attract private capital? These are some of the questions that we'll be addressing today.

This event will have three panel discussions and we'll finish with the results of our poll on which sector could make the greatest difference in fighting climate change.

Let's take a quick look at what's coming up over the next hour.

We are in for some very interesting discussions as we explore how to increase financing for the low carbon resilient transition.

Remember, you can share your thoughts on this topic at any time using the hashtag #PeopleAndClimate. Please do follow us on Twitter, Instagram, Facebook and LinkedIn.

Our first discussion today is the potential of carbon markets to help mobilize finance for climate action. We are joined now by David Malpass, President of the World Bank Group who moderates the conversation with Annette Nazareth, Chair of the Integrity Council for the Voluntary Carbon Market, and Dirk Forrister, President and CEO of the International Emissions Trading Association. President Malpass. Over to you.

[David Malpass]

Thanks very much. We're here today because of the climate crisis, and we're looking at one portion of this challenge, which is how do we create a market that allows more emission reduction and that has several parts to it that's voluntary credits, that's mandatory or forced reductions by various countries that can involve trading systems.

We have two experts on this that we want to ask questions to. I'll ask questions, but to put it into context for people, we need to find ways to have giant amounts of financing flow to really impactful projects. For example, the decommissioning of a coal fired power plant takes money, it takes money directly for the work to decommission the plant. But then, how do you substitute power solar panels on top of the land? What do you do with the people that are displaced or that were involved in the production chain? All of this gets into a system for the world to actually reduce greenhouse gas emissions much more rapidly than we have. One of the challenges has been how do you create a standardized market that makes this happen? And Annette, I know you've been involved in defining high integrity carbon credits. Could you give it brief us a little bit on that?

[Annette Nazareth]

Sure. Well, thank you for this opportunity. Yes, I am Chair of the Integrity Council for the Voluntary Carbon Markets and one of our first orders of business is to define what a high quality carbon credit is. We call that our core carbon principles. You may know that we went out for public consultation for 60 days and the public comment period recently closed and we're now absorbing these incredibly helpful comments. We got over two thousand comments from a number of very expert people. Our goal is to, ultimately, in short order, hopefully, come up with the definitive standard. And that, I think, is going to help the market in innumerable ways. Obviously, if we have a standard that the public can rely upon that has true additionality and integrity, then we'll see the market scale up. What we like to say is, if you bring integrity to the market, it will scale.

[David Malpass]

Why hasn't this happened yet? By our numbers and World Bank keeps a lot of data on this which is important in growing a market. The most recent numbers I saw were the voluntary credit market was only 1.6 billion dollars. What's been the obstacle?

[Annette Nazareth]

Voluntary is just that it's not regulated.

[David Malpass]

But there's lots of corporations that want to buy. The World Bank, we buy carbon credits in order to be neutral for this facility.

[Annette Nazareth]

That's a really good question and the answer is that when you don't have standardization, what we have is a very fragmented market and it's a very bilateral market. Buyers and sellers have to come together and they have to negotiate every contract. Not only that, they have to do diligence on every project. And that takes a lot of time and effort. Frankly, the corporations that do this at scale have hired climate scientists to help them in that effort. That doesn't make for an efficient market, an efficient and liquid market. We need to take those frictions out of the market by having a high quality standard that is universally adopted with a system behind it, an assessment framework, so you can be sure that someone who gets that designation has actually met those standards. It's not just an aspirational standard. Then you'll see confidence in the market and greater trading at scale.

[David Malpass]

That would be hugely empowering for the projects because there would be a funder that was really interested in what was being achieved in terms of greenhouse gas emission reduction.

Dirk, tell us about your side of it. You put the credits together with somebody who wants them, right?

[Dirk Forrister]

I represent a large segment of the business community that's committed to using carbon markets for scaling up action. I think that's why we've had such good alignment with you and your team at the World Bank. Frankly, it is all about scaling up action and providing this frameworks that Annette was describing that build confidence in it. In my membership, I've got both buyers and sellers and all the people in between. I think we're sitting right now at an inflection point where for a number of years we were waiting for the rules on Article Six to be agreed and we got that last year. So now, it's a time period where countries are starting to think about how they're going to use those tools and how the private sector will fit into that. I think there's enormous appetite from the business community, in part driven by investors that want to know how corporates are aligning with their own net zero aspirations and also from governments that are pressuring their companies to do more. They're adopting laws that are going to cover and require carbon reductions. The promise of the tools of Article Six of allowing cooperation across border is really essential to achieving the goals of the Paris Climate Agreement because if everybody tries to reach their goals in isolation, there are very few that will be able to get to net zero levels of protection.

If you want to get to net zero, you need a functioning market and a functioning Article Six to allow the kind of business to business cooperation, at least for the business side of it.

[David Malpass]

I was with the Brazil Finance Minister spoke at the G20 today and was pointing out that Brazil has available a huge carbon sink. He said they are working to expand as rapidly as possible. I know we're working with them to do that. But then, where does that trading, what's really enabled by that? Do you carry out transactions between buyers and sellers?

[Dirk Forrister]

I wish I did. I used to in a prior life. But no, now my association has a number of financial institutions that are part of it that are offering prices every day and emissions exchanges, etcetera, that are ready for much more investment. I think the challenge right now is there aren't very many carbon markets in the world that accept international credits for compliance. I think if countries are going to want to move toward net zero goals, they're going to need to reconsider that and open up more. A classic example is the European Union. The European Union used to accept CDM credits during the Kyoto era for compliance and it spurred a whole industry around the world of entrepreneurs developing emission reduction projects. But they changed the rules at one point because they wanted to drive more reductions in Europe. That was a noble objective, but it cut off supply from a lot of places that could have done more mitigation. I think for your client countries, really interesting prospect is on a global basis they have enough mitigation potential at a low cost to achieve their own targets, their own contributions to the Paris Agreement and to provide services to others who have more expensive alternatives.

[David Malpass]

I want to describe one of our projects and get your evaluation of it and then maybe come back to the energy realignment that's going on in Europe is really important to the way the carbon credit market evolves. Let me tell you the story first. We are presenting right now a trust fund that the World Bank would have that would try to achieve verifiable emission reductions with countries. The challenge is it takes some years for the country to actually do the reduction and, in the meantime, where the money comes from to help the country with that kind of reduction. It's called SCALE. You'll hear more and more about it and we'll be presenting it more formally for COP 27. It takes money in for the purpose of helping find projects that actually reduce greenhouse gas emissions. That's one thing that we're working on and then I wanted to mention the Komati project in South Africa. It's been very challenging to get countries to go along with reduction in coal fired power plants. We do have a plant or not, South Africa has a plant that they're willing to shut down. So, we're putting money into that and then helping with the social transformation that goes with that shutdown. I'm hoping we will be bringing that to the board in the near future.

We're still at the very early stage. Our understanding of our thought on where we're proceeding is if we can actually achieve verifiable emission reduction, meaning a number of projects then people that are trying to standardize those credits and make them saleable across borders can come into play. But at this point we need much more supply of meaningful projects. What do you think?

[Annette Nazareth]

I think that's right and I think what you're talking about is very exciting because it talks about bringing all manner of financial engineering essentially to these efforts, whether it's forward contracts or finding ways to finance going out of the sort of coal firing business. I think we need to use, frankly, every tool in the toolbox and I think those are very creative ones in addition to the more sort of traditional projects that we see. Having these kinds of, as I said, forward looking projects as well, I think is very important.

[David Malpass]

Right now, and I'll ask maybe both of you the contracts that occur now are relatively one off. They're bespoke and I don't know if anyone can comment on. I saw JPMorgan did a contract with Hydropower in upstate New York that helps them reach net zero. That's a unique contract. It's hard for it to be tradable because we haven't seen the contract, any thoughts on that and on the concept of how do we bridge the gap from these one off contracts toward a market?

[Dirk Forrister]

I can speak to that briefly in IETA, this is one of the things that we work on, is standardized contracts.

[David Malpass]

IETA, international Emissions Trading Association.

[Dirk Forrister]

Exactly. Sorry for the acronym. That's all right. Yes, my old boss used to make me pay one dollars for every acronym so if you need me to pay up, I will.

I think the notion of standardized contracts is very important for scaling the investment and it is one of the things in the process that Annette and I are involved in the Integrity Council, that's been identified as an important need. So, my organization and International Security Dealers Association are working on a refresh set of model contracts for the Paris era because we had them for the Kyoto era, but Paris is more serious. We have issues to contend with about accounting, treatment, corresponding adjustments, that kind of thing. During Climate Week in New York, we released our first draft of a secondary contract, and we have two more in the pipeline that I hope we have ready for COP 27. Again, that's just a tool. We'll put it into the public domain, make it available for use. To your point, in large carbon crediting deals, oftentimes you still have to conform part of it to the specific project location. If you can get a model agreement that solves 80 or 85% of it, you can really cut the legal down.

[Annette Nazareth]

In the Integrity Council, one of our work streams, in addition to creating the core carbon principles, is this focus on markets. We really think that we need, obviously, to scale up the markets and while we're certainly not opposed to the continuation of bilateral contracts, as Dirk suggests, I mean, our hope is that eventually we see this trade on electronic platforms and exchanges. I think that there are markets all over the world that are very excited to do that. I think the work that IETA has done with ISDA is very important because I think the standard terms that they've now negotiated for the bilateral contracts that would be standardized, I think we'll carry over into the exchange markets. Again, I think we're going to see a lot more development and to really scale this, you're going to have to do a lot more than just bilateral trading.

[David Malpass]

You owe us a dollar.

[Annette Nazareth]

I know.

[David Malpass]

ISDA, International Security Dealers Association.

I want to come back to the Europe point that there had been a market that was international, and then it went away because they wanted to focus more on greening Europe.

Right now, I've heard that there's this challenge that as they are having to use more coal and more even wood being burned and other fuels, it's harder for them to get to the net zero goals so they will be looking abroad for credits. Does that sound right? And, is that a good thing?

[Dirk Forrister]

I certainly think it's important for the long term. I know Europe is contending with a lot of really difficult energy securities issues right now. But I do think for the long term we need to build up a base of removal credits which can involve natural climate solutions or technological solutions that will help compensate for the remaining emissions that are there. Europe doesn't have a plan for that yet so when you talk to them, encourage this removal concept.

[David Malpass]

One of the complaints is, well, I'll go to the core of it. A carbon credit is bad because you're enabling someone to do the activity over time. Give me a comment on that. If our real goal is to get reduction in greenhouse gas emissions, nobody should get credits. It should just be done.

[Annette Nazareth]

I mean, that's true. The carbon credits should only be the complimentary tool and the primary tool is to get emissions down to the full extent possible. Unfortunately, we have a real challenge now because we have an energy crisis in Europe. It's a difficult time to say, well, we shouldn't use every tool that we can consistent with the challenges that they're now facing. The bottom line is that there's no question that carbon credits are supposed to be sort of a secondary, complementary tool and the first order of business is to get emissions down to the full extent possible.

[David Malpass]

So, I have a question on that. Countries have committed in the Paris agreement to their nationally determined contributions. One of the issues is they have to get that base as part of their agreement. In the scale concept that we've put forward, this emission verifiable emission reduction, the part of it is the country's responsibility. They've already agreed to it, and then there'll be something on top of that so that would go to your point of being additional, additionality in that way. I guess my question is that we are finding conflicts between the countries’ NDC and good progress on getting a project done because the country is not incentivized to do the project.

[Dirk Forrister]

I think part of the challenge here is that in the setup of the NDC's, a lot of countries put forward pledges that were dependent on international finance or international market investment. We looked at this in collaboration with the World Bank on the first round of NDC's back just before Paris. Half of them were expressed in that way, saying, yes, we have interest in using markets to achieve our target. They may have pledged it, but it was with the intent of being able to do cross-border cooperation. The new NDC's, the enhanced ones that have been being put forward lately, 80% of them, describe how they would like international cooperation to achieve them. Here's, I think, the key point of it. Everybody needs help getting where they need to go, nobody can get there alone. I think you'll hear that in talking to the energy industry these days. Nobody can get to net zero alone. You've got to have partners, whether it's technology partners, natural climate removal partners, cross border partners, but if we stay balkanized on it, we won't get there. You will not get one and a half degrees for sure. So this cooperation of Article Six is all about it's really the only hope that the Paris agreement will work.

[David Malpass]

Exactly. You mentioned technology, so my mind went toward hydrogen and all kinds of technology because we have in the bank the Clean Technology Fund, and we're very happy to receive a big contribution from the US. That is going to help create the technology base for the breakthroughs that are needed in a number of areas. People are working on a lot of those areas. But then again, I think they go to your issue, a net of additionality that, okay, we've got this starting point, and how do we layer on top of it with projects? So they've said we have only a couple of minutes left, and this is one that we could do a half hour on, but to high integrity credits, let me challenge that. Let's say someone like World Bank really wanted to reduce methane emissions. So, there's satellites looking at the big emitters, and then you do a project to block the leakage in a pipeline, for example, to reduce the methane emissions. Does that qualify as a high integrity credit?

[Annette Nazareth]

I'll let you know after we finish our core carbon principle. I don't know what you think, Dirk.

[Dirk Forrister]

I think it would likely meet the test, but in the carbon crediting market, we're really focused on making sure that a particular activity meets a performance standard. That's what this work is all about, is setting an improved threshold for the standard. The hydrogen economy doesn't have a standard yet, but I fully expect that it will.

[David Malpass]

This is green hydrogen versus blue hydrogen, what's the definition in between?

[Dirk Forrister]

As we develop those standards and as the market acceptance of that happens, I think you'll start seeing more investment. A beautiful thing about hydrogen is you might not need credit. Your emissions free so  you're offering a huge benefit to the extent that an independent crediting standard could come in, I think there will be interest in that class.

[David Malpass]

Yes, and that's happened. The International Finance Corporation, IFC, part of the World Bank has made great strides in standardizing certain kinds of contracts. That's been a breakthrough in the solar area to have a standardized contract that then speeds up the whole process. They're also working on that to create a warehousing of carbon credits that would help facilitate the standardization and the trading of it. I think my impression is that there are a number of steps that are going on in parallel right now that will enable that future market.

I'll close with the World Bank goal is to have a large fund that can flow into projects because the idea is, if we could have 100 projects that were cold decommissioning projects, then they could be standardized and packaged, and the financial market would really go after them. Maybe, it won't even take it wouldn't take a hundred. It might be if there are 10 individual projects, package the risk together and have saleable credits would be a great step.

[Annette Nazareth]

I think that's wonderful. It's a very powerful tool.

[David Malpass]

Annette and Dirk, thank you very much.

What are we doing now, Mercy?

[Mercy Niwe]

Thank you so much for that discussion.

Our audience has been sending in questions both throughout the discussion right now, but even before that. One of the questions that has come in, when will carbon markets roll out globally? And David, that goes to you fast. When do you think carbon markets will roll out?

[David Malpass]

I think we have to have standardization of verifiable credit. I'm afraid we're looking at three years or five years from now, but we have two experts.

[Mercy Niwe]

Annette, go ahead.

[Annette Nazareth]

On the voluntary side, I'm hoping it takes off like wildfire once we finalize our core carbon principles, because as I said, there's a huge appetite for these products, and I think there's a huge appetite on the part of significant capital markets players like exchanges and brokers and others to be part of this.

I know there's work being done on registries and all manner of other parts of the market structure that will be necessary to scale up this market. I think with all the talent that's involved in this, I'm hoping it's faster than three years.

[David Malpass]

I've forgotten a key word, transparency. As markets are created, the vital thing is that people be allowed to see the contracts. We're really pushing that hard. Dirk, any thoughts? How many years a month?

[Dirk Forrister]

I would say the way I would respond to that question is that we have a little glimpse into it right now, because we do have the voluntary market, even though it's tiny compared to the need, it is global, but it's mainly the voluntary market that's global. So, that global part of your question really caught my ear. What I think is the point in time when you see that happening in a major way is when countries actually come to grips with what net zero means because right now the national targets aren't really aligned to a one and a half degree level of protection with any kind of veracity. When governments really come to grips with it, that's when you discover, oh, yeah, we need cooperative models. We need sources and syncs to balance out. We need technology like we've never seen it before. We need massive amounts of investment. Markets will be a big part of that, not the whole part, but a huge part of it. Back to governments on that one.

[David Malpass]

It occurs to me. We are working really hard on Paris Alignment for our own portfolio and committed to that within our Paris Agreement or our relationship with Paris Agreement. People are struggling with exactly how that works. That's one of the issues forcing people along, is that more and more institutions are committing to and then achieving Paris Alignment, which discloses some of the things that you're mentioning there. Anything else?

[Mercy Niwe]

We will take that. Thank you so much, David, Annette, and Dirk, again, thank you for that wonderful discussion.

We still have two more discussions to come, so please stay here with us. For both the audience in the room and online, please continue posting your questions in English, French, Spanish or Arabic at live.worldbank.org, our live expert bloggers are online right now and will answer as many questions as possible.

A reminder that we are also streaming this event in all those languages, both on World Bank Live and on our social media channels.

We are also inviting you all to take part in the special poll. The question we are asking today is which sector do you think could make the greatest difference in fighting climate change? Is it A, energy or B, food, land use and agriculture? Industry is option C, and if you think it's transport choose D, and your last option E is water. Whether you're online or here our live audience, you can cast your vote right now at live.worldbank.org and we'll bring you the results at the end of this event.

Let's take a closer look at climate finance. Last year, as David mentioned, the World Bank Group delivered 31.7 billion for climate change, adaptation and mitigation to developing countries, our highest amount ever. But countries need trillions of dollars over the next decade to achieve their climate and development goals. How much climate finance currently flows through the world and where does it go? Let's take a look at the data.

Let us look now at the details of climate finance to low and middle income countries. This chart shows us how this finance breaks down, where it comes from, the scale, how it's used, and where it goes. Let us follow the money. On the left, you can see climate finance to low and middle income countries reached a total average of nearly 425 billion dollars in 2019 and 2020. That's broken down into 264 billion from public actors such as multilateral development banks and 160 billion from private actors.

Now, let's look at where that money went. You can see more than two thirds of that financing, 292 billion dollars went to countries in the East Asia and Pacific region. Latin America and the Caribbean, Eastern Europe and Central Asia and South Asia all received around 30 billion, with Sub Saharan Africa and the Middle East and North Africa receiving the list.

How was this money used? Let us look at how much was dedicated to mitigation measures. You can see 88% of these flaws, 373 billion dollars in total, were dedicated to mitigation. This was largely for solar and onshore wind projects. This focus on mitigation, the IPCC says this financing still falls short of what is needed to reach globally aggregate goals. Let's look at financing from adaptation. It's estimated that these flows amount to a total of around 41 billion dollars, which is very far short of the total needed in these countries. In fact, it is estimated that low and middle-income countries need between 1.7 and 3.4 trillion dollars in climate finance by year 2030 to support action on mitigation and adaptation. It's really about getting both the demand side right. That means the right projects in countries and improving the enabling environment and the supply side right. For instance, concession of finance or the risking approaches.

[Moses Alex Cargo]

[Speaking foreign language] I am Moses Alex Cargo in Freetown, Sierra Leone and you're watching the World Bank-IMF Annual Meetings.

[Mercy Niwe]

Our next panel is going to look at ways to mobilize private capital to finance climate action in emerging markets because if we want to move the needle toward net zero, then private capital is going to have to play a central role in finding the green transition. We are now joined by Makhtar Diop, Managing Director of International Finance Corporation, and Slawomir Krupa, the future CEO of Société Générale. I hope I've said it well. Over to you, Makhtar.

[Makhtar Diop]

Thank you so much. Bonjour. Good afternoon. Good evening. Thank you very much for joining us. We have a CEO of a bank which is known for project finance and development and which is very committed in addressing climate change and SDGs. What are the main roadblocks? When you wake up in the morning and you create a portfolio and want to do more? What are you seeing as being the main roadblocks?

[Slawomir Krupa]

Thank you for having me. I'm delighted to be here, and thank you for your kind words. We, first of all, think in terms of the emerging countries transition, energy transition, about the size of the challenge. You have, in terms of existing emissions, obviously a very low proportion in emerging countries, 25% roughly, if we compare that to the average per capita emissions in developed countries. But in terms of the growth over the next two decades, you have an expectation at current policies and current projections of a growth of five gigatons of emissions when developed countries will probably go down by two and China and the rest of the world will remain flat. Meaning, there's no way we reach our goals for sustainable development and energy transition for the world if we don't do more in emerging countries. This creates a need for and, I think you just mentioned it actually, for multiplying by seven the investments and the financing that goes with it in emerging countries to reach over a trillion dollars annually. This creates a massive need for capital and the main roadblocks, since this was the heart of your question, is how do we make sure that we bridge the funds that are available in the private markets. The private capital with the investment needs.

Today, it's difficult because the financing gap in terms of some of the specific risks that the private capital is not willing to take is too wide to really address that kind of needs. So, I think one of the biggest roadblocks is how do we breach the specific risks that you have in emerging countries, the political risk, the enhancements that are needed for the various projects, how do you make that happen? Then, there's a whole list of regulatory issues, improvements in terms of the PPP framework, improvements in terms of the non-recourse financing framework, etc. But at the heart of it, how do we make sure that blended finance and your role there is potentially key helps fund all these needs? I had one for you, how do you see the main challenges in terms of the energy transition in emerging countries and what's the role of the IFC and of us, the banks?

[Makhtar Diop]

It's very similar to the challenges that you are seeing. We are seeing traditional challenges to invest in emerging economies, which is the cost of development. You have project finance. You know that you see how it's expensive to develop projects, but also the risk level. The risk level has been exacerbated recently with the event that we're having, which are headwind. We are critical of headwinds. We have the war in Ukraine. You are the macro carbon situation. You have the slowdown in growth and you have the increase of stability in some countries. All these are increasing the risk level. In addition to respond to the inflation pressure that most advanced economies are facing or facing, central banks are hiking interest rates with creating a pull factor on the market and to take investment, which we're willing to go to emerging countries to be redirected to safer assets. These two factors require now more and more blend, refinement and de-risking instrument to be able for us to mobilize more resources. That's really at the heart of the conversation today. It's not affecting countries in emerging economies, but it affects also a larger country. If you take a large emerging country, which are the largest emitters, like India, like Indonesia, they are in the process of reducing emissions, but they are facing a huge cost of debit, commissioning some plants which we are called producing plants, and those type of questions which require additional resources and blended filters to be able to make it affordable and interesting.

Lastly, we have the issue of currency depreciation and regulatory framework. We have been working in a lot of countries to have what we call a green taxonomy. We say, okay, this paper is green. This paper, this company is doing something which is green or not. This is still limited at the country level and when we talk to people who want to develop a capital market and deepen some of the capital market in green, they want to have a regional approach. We are working towards having green taxonomy which goes beyond a specific country but a specific country so that when you want to invest in paper, you don't invest in paper for only one country, but for a set of countries which are and the last issue of currency mismatch, which is always a big problem, particularly this time, which are complex for all of us. What I would like to ask you is you have been working on different geographies, you're working in the US, you're working the most advanced economy, you're working in large emerging economy, low-income countries, you have a large network of federal banking in Africa. What is the commonality, if there is any, in financing climate change activities in countries?

[Slawomir Krupa]

It's a very interesting question. I think, first of all, the level of awareness across the world in almost every country, all the ones you mentioned and with all the situations that they're specifically in. I think the level of awareness about the need to do what is right to align our human activity to a trajectory that makes us basically survive, and protect life on the planet. The awareness now is there all over the world. Second thing, and I alluded to this in my first answer, I think there is a lot of appetite and a lot of funds available to invest in the transition but they for now find more vehicles and more issuers in the OECD countries. If you look at sustainable finance today it's mostly developed issuers market and so there's this gap which exists but the awareness is there, the funds are there and clearly the investment needs are there. The good news for a lot of the emerging countries is that they do have a lot of renewable resource. I'm sure you know that in Africa you have roughly 40% of the solar resources, 2% only in the production capacity.

Here, once again, there is the understanding of the private money that wants to do the right thing but also generate return that there are specific, probably low cost, low cost eventually investment opportunities in the energy transition in a lot of emerging countries. The challenge, as I already said, is how do we make this work? How we make sure that this available money finds its way in the most efficient way to the investment need? I'll be very keen to hear you out on this. How do you think you bridge that gap?

[Makhtar Diop]

It’ that gap what keeping you awake at night. But what we are trying to demonstrate is that by leveraging the different source of financing we can get a much larger impact. Let me just go quickly, in the last two, three important COPs, COP 21, 26 and the upcoming COP 27. COP 21 is the discussion of climate change was basically NGOs and government. There was two urban actors discussing about climate change. COP 26 as there is a realization that working separately and not including the private sector will not allow us to make a big difference and it was the first time we had a very important conversation between three groups we are not talking traditionally together around this topic. So philanthropy, NGOs, DFIs like us, capital market and try to see how we can help each other. Philanthropy more and more bringing their resources to de-risk investment and the work with us towards that and it's the importance of money in the development financial institution there is more and more money which is for low-income countries, which is great money used to the risk investment and adding all these bring a different dimension.

Secondly, people have been realizing over time that we cannot talk about climate change, we have to talk about social issues and social inclusion. So, what we are doing more and more with the last set of bonds that we have issued, the BEST bond and the MCPP One Planet bonds which are co-mobilization instruments is to say when you think about it, what is the impact of it? When you're closing a plant because you want to reduce coal emissions? What are you doing to include to ensure that people get a job? That's what the World Bank Group has been doing recently in South Africa and it's been the work that we've been doing for many years and the involvement of our team in the dialogue for many years that allows people to come and now bring a solution that is solving an important problem. We are in discussion on other countries like Vietnam, we are on the country like Indonesia and we need to look at each of those countries very specifically. That's why we have developed an instrument of one of my colleagues are here who are leading this work which calls the CCDRs. We say let's take a country and look at what it will take to move on the energy transition, on the climate change transition.

What we are doing in this country is that the reality is very different when you're a coal producer and using for electricity, the challenge you have to transition is very different from a country which is not a coal producer and it just important to coal. For the latter, the problem is just financial. First of all. First one is financial and social and need to be consensus and social consensus. So, our CCDRs are important tools that will be providing some information to countries allowing them to have that conversation. Second, we are working on the sustainable banking network. We try to discuss with you guys and say okay, we have some ideas, some experience on it and you might want to think together what the standards. To find criteria stand out to assess activity in the real sector and culture, to say Paris alignment is less complicated than looking at your single loan that you have in your bank and say, they’re Paris aligned. So, we are building a coalition to set standards and ensure that we are working. These are a mix of soft financial but also institutional building answers that we are giving to the question.

Now, can I ask you a question? If you were to ask one or two things to the people present here, the governors of the Bank, the private sector, the public sector, what would be your single most important question to be able to work together and really move on this energy transition and climate change, and the fight against climate change?

[Slawomir Krupa]

I'll start by saying that I'm sure you have gathered by now that we are very keen to be part of the solution. We feel it's in our mission. We feel we have the sector expertise, the history in terms of financing projects, financing development, etc. We're very keen, but we both for ourselves and as intermediaries, as people helping structure and bring all these various sources of financing together to make things happen on the ground. We do need in emerging countries credit enhancements and we do need political risk protection because these are think of it as nonstandard risks that we cannot model, that we cannot protect ourselves in a systematic way from and in the way we are all regulated. We simply would not be able to do a great job if the credit enhancement and political risk protection is not provided by a combination, you said it, of maybe NGOs, maybe private money. That is charitable in its philosophy. But I do believe without also you guys providing some sort of credit enhancement, it's not going to reach the scale that we needed to reach and so, you have, in my view, to catalyze this effort and you will be the ones that will make this whole endeavor at scale.

[Makhtar Diop]

I think that we are exactly looking the same direction. We have developed some instruments, we have upstream on our side, which is a little bit evaluation of your project development. We have traditional project development. This is new business development but we thought that to tackle these issues you need to do some more research in some sectors. Let me give you an example. Reflective painting. We know that if you apply to buildings, it will lower the temperature by two, three degree Celsius, but it's not used widely. We know that putting in my country and other countries in the world, some UV film on Windows will have the same impact on temperature. By working on district cooling, for instance, you can significantly increase the efficiency of cooling in the emerging countries. As we are looking at the situation, all this technology are not widely adapted and we believe that because the market conditions have not been studied enough in emerging countries, but also, as you rightly say, there is no money to de-risk it so that investors that you are financing would be comfortable to invest in those areas.

If you agree, let's have a part to work together and in hand and ensure that we will be mobilizing and maybe set to ourselves some targets of mobilizing resources on the capital market together to target tackle the issues of emerging economies.

[Slawomir Krupa]

Absolutely.

[Makhtar Diop]

Thank you so very much.

[Slawomir Krupa]

Thank you very much, Makhtar.

[Mercy Niwe]

Thank you so much for that wonderful discussion.

Our audience, as I mentioned, has been posting questions before and throughout this broadcast. One person asks the following questions, originally in French. So, Slawomir, I'll turn to you on this, “why are we letting companies continue to pollute? How can we work with the private sector to reduce emissions?”

[Slawomir Krupa]

It's a controversial, yet central question. Maybe, I'll start briefly speaking about the banks and ourselves. What we did is we decided, [inaudible], but also a lot of our peers and competitors and partners to align ourselves on the Paris Agreement trajectory. Meaning that as we run our activities, our portfolios, we will reduce the carbon emission content, if you will, of our portfolios over time to align ourselves with this trajectory. It means, in some cases, you mentioned call simply stopping doing some of our businesses. In many other instances, it's trying to figure out. You mentioned pact, you mentioned collective intelligence, etcetera. We do need this to design, assess what are the trajectories per sector. That makes sense because one thing I maybe could have said upfront there's no magical switch here. No one can switch everything from the past to the future overnight without simply extreme social or political consequences. Because of that, in this whole debate, the word transition is at the heart of everything we are trying to do. And it's difficult. We don't have all the answers. What is the ambitious enough goal for real estate in a given jurisdiction to be a positive actor of change in this whole equation of climate change?

We don't really know or we don't have all the answers. So, we have to work with our clients and this is where we are 100% committed ourselves to help them figure it out while playing a little bit this role of judge of what's ambitious enough, what's realistic, credible enough and it's an everyday struggle. But again, don't underestimate how profound, how revolutionary this change is for almost any industry, right? It's change in terms of supply chain, sometimes even viability the very existence of some companies. It's a profound change that most of the companies have never gone through. Determination, but understanding of what the transition means is the foundation of what we're trying to do.

[Mercy Niwe]

Thank you, Slawomir and we have Makhtar. The last question came in from Tito Gupta, and he's asking, “In developing countries, who will invest in whom? Who will finance the low-carbon transition if rich nations do not share their costs?”

[Makhtar Diop]

A bit of a very strong point that we share it coming from the social contract in countries. There's no choice. Actually, if you look at today, you talk to the GenZ in Europe or the US, or you talk to the civil society or the parliamentarian in a more advanced economy, they are demanding that people do more to fight climate change and they are asking the taxpayer and other decision makers to put the resources there. So now, if you look at the evolution of the conversation before COP 26, we are discussing a lot about resource and financing, but there were a very strong pressure from everywhere in COP 26 to come with resources and announce resources and announce resources that could help this transition. This is what happened in Glasgow, they were a very coordinated effort for all parties but large and more for advanced countries, make very strong commitment. It was not easy commitment because it was at the time where if you remember, it was a time of COVID where the budget was under stress. But as part of it all, this country made very, very significant effort and commitment to address it.

Now, we're going to COP 27 and people want to see how those commitments have been implemented. This is overall, I do believe that they've been implemented. The question is that the magnitude is such that we need more and more and more and that's it is a challenge today. I think that I give you some example of a situation of large countries which we need significant amount of money and it's not trivial to find those resources and make them available. But what I'm seeing a very strong commitment for policymaker, very strong commitment to find solutions. And the Minister of Finance meeting yesterday on climate change was exactly looking at this question and the G7 countries were sitting and discussing from the Finance Minister point of view how we can do to finance this transition. It was not a discussion with the ministers of environment amongst themselves, it was the minister for finance who was saying what can we do? We will find different ways. It will be financing, it will be accelerating adoption of technology, which would be reducing the cost of it. It will be stabilizing the macroeconomic situation so that the cost of capital will be lower and uncertainty reduced and that will be also growth in developing countries because at the end of the day, that's why people will be able to make the right choices in terms of use of energy and supporting the transition.

[Mercy Niwe]

Thank you so much, Makhtar and Mr. Slawomir for this wonderful discussion.

[Slawomir Krupa]

Thank you very much. Merci beaucoup.

[Mercy Niwe]

It's time for us to again… People are thanking you for that.

Our next panel will be joining us shortly, but it's time now to look at how climate finance can make a difference on the ground. We are going to take you to the Sahel region of Africa to learn about the challenges facing this region. How could climate finance help the Sahel adapt to climate change and realize its renewable energy potential? Take a look.

[Video Narrator]

The Sahel stretches 5400 kilometers across Africa. It covers countries that are among the poorest in the world. Many have faced multiple conflicts, in some cases honey. But the Sahel may be facing its biggest threat yet in climate change. Average temperatures could rise by 2050. 20 million people make their living raising cattle into the hill. Each year, they roam in search of water and pastures which are fast depleted. An additional 13.5 million people could fall into poverty because of climate change by 2050. At the same time, the Sahel's population is the least responsible for its climate struggles. It accounts for as little as 1% of global emissions.

But as safer climate future is possible, investing 16 billion between now and 2030 can make a huge difference to expanding energy access, restoring land, expanding vital water and sanitary services and boosting adaptation. Financing from multiple donors or multilateral development banks, lending their cheaper consumption of finance together can deliver transformative results like the great green walls and desert to power initiatives. Blended finance can also attract private capital, especially for renewable energy and climate smart agribusiness.

The Sahel could also dramatically improve financial resilience to natural disasters. Adaptive social protection can bring critical resources to the poorest and most vulnerable when they need it the most as can strengthen government services and expanded support for entrepreneurship.

This is what addressing climate and development together looks like. It's about powering, economy sustainably, creating opportunities for investment, ensuring lives and livelihoods are safe so that the people of the Sahel have a green, inclusive and resilient future.

[Jerome Elliot]

Hola. I'm Jairo Bedoya in Montelíbano, Colombia, and you’re watching the World Bank Group-IMF Annual Meetings.

[Mercy Niwe]

I hope you enjoyed that video. In particular, it brought home how important investments in adaptation would be to ensure countries have a safer, more prosperous and inclusive future.

Our final panel discussion will look at adaptation and the wider policy landscape, including the energy transition, fiscal reforms and what should we be looking for at COP 27 which will take place in Egypt in just a few short weeks. For that. We are joined by Mari Pangestu, our Managing Director of Development Policy and Partnerships at the World Bank Group, and Lord Nicholas Stern, Professor of Economics and Government at the London School of Economics. Over to you Mari.

[Mari Pangestu]

Thanks a lot. Thanks Nick, for joining me in this closing conversation for this session on financing low-carbon resilient transition. We had two sessions before this on the role of voluntary carbon markets and private capital in financing this transition. I thought we should take a little bit of a step back and ask ourselves, as we are going to COP asking these very basic questions what is it that we are financing. Actually, let's be clear on what are we financing. I know you and many of us have been calling for the need to integrate climate and development that it's not a tradeoff and that climate action is urgent, needs to be done now but there's the opportunity for growth and development, which is green, resilient and inclusive, and it needs to be undertaken with transformative investments at scale. So, would you like to elaborate on that?

[Nicholas Stern]

Thank you and thank you very much for having me, Mari, it's a pleasure to be I mean, we talk in private, but we don't mind talking in public. That's very nice. Financing for what is the right question. This is about the finance associated with the commitments that the world has made, particularly Paris COP 21 and Glasgow COP 26, to give us a chance to keep 1.5 degrees in reach. Paris, of course, middle and well below two degrees. That's the task. We're in a position we've got a lot of experience now to ask the question what kinds of actions and investments are necessary to do that? So you start with the objective, what investments can deliver? Various people have looked at sector by sector, country by country, over time, because this is a story which has to be pursued intensely in this decade. But of course, it goes all the way through to midcentury. We can now see numbers and I rely very much on my friends Amar Bhattacharya and Homi Kharas who have been working on this. We can see that we need to increase investment around the world to deliver on what we've committed to deliver something like or close to three percentage points of GDP. Rich countries, perhaps two, poorer countries, perhaps four or five in order to make the energy transition. Give us the adaptation and resilience we so urgently need and tackle the challenges along with that in an integrated way around natural capital. So, we've committed wisely to those targets, and this is what we need to get there. Finance for what has an answer now. The numbers that Homi and Amar put together are quite consistent with work from the International Energy Agency, with the Energy Transition Commission and so on. The important point is not the decimal points there, but the order of magnitude that we need to follow for emerging markets and developing economies, excluding China, of course. China is enormously important in all this, but it's a lot of different questions from the point of view of investment in finance. That would mean something like an extra investment of about two trillion dollars a year as a flow by 2030. Perhaps one trillion could be financed internally. That means external flows of around one trillion dollars a year will be necessary. That's, of course, the challenge.

Then, we can go into some detail about how that actually happened. We should recognize this is necessary to avoid deeply dangerous climate change. It's time specific. It has to be done on scale as we've done now. It's not the case that if we achieve some goal five or 10 years later, well, at least we've achieved it. That's wrong. We have to under great time pressure, and we have to manage the dislocation that comes with it. If we do that, then we have in our hands the growth story and the development story of the 21st century. It's not that we can just put these two things together and do all right, climate and development. It's stronger than that. The drive to net zero is driving the growth story of this century.

[Mari Pangestu]

Thanks, Nick. Basically, action now is the growth story and inaction is going to cost you exponentially in the future and start to slow you down. Thanks for that. But, you know, you talked about the how do we get there question because COP 27 is about implementation, as we know. How do we go from the growth story, the opportunity and the promise for this growth story to implementation? How do we actually realize these investments? What should countries be doing? What should the global community be doing? At the Bank with our climate and development approach, we have been doing this country and climate change development reports, helping countries to prioritize and what should the low-carbon resilient transition looks like, and within that, then prioritize what they need to do, but what more should be done and can be done?

[Nicholas Stern]

The implementation story now has substance in terms of we can understand what it is that we're supposed to be implementing. Obviously the investment climate, which I emphasize very strongly when I was here 20 years ago as a chief economist, we've got actually more structure around that in the country platforms and so on, which are critical in all this. But that is something which I found the CCDRs are really helpful. Implementation of what? Well, we've tried to describe it to the investments and I think digging deeper at the country level, the CCDRs are really a tremendous innovation and they tell us what it is to implement. It's different in different countries, some countries will be much heavier on adaptation and resilience than others. In other countries, it will be particularly the energy transition. In other countries, it will be natural capital and biodiversity. Countries like Indonesia, it's all of these. Of course, in many countries it's all of this.

[Mari Pangestu]

What does it imply for the country when they prioritize? Is it the policies? Is it the regulations? Is that the projects that they must be coming up with which are the priority projects? Is that the way to go?

[Nicholas Stern]

I think if you start with the kinds of things you know you need to do as identified in this work and the CCDR, and then you ask yourself, what are the impediments, what are the incentives that one can start to put together and how do you do that in a way that allows people to look into the future? Because a lot of these investments are long-term and you need confidence in where things are going. What can give you the confidence? Well, institutional structures, plans, commitments, places where people can get together to solve their problems. There are always obstacles and problems that arise if there are structures that allow those to be solved. But essentially, it has to be problem-solving, incentivization, and a clear reason to believe that that's looking steadily into the future. There are various institutional structures that can do that. For example, we get lots of things wrong in the UK, as everybody knows very well, but occasionally we get something right, and in the climate change committees and climate change legislation, we have institutional structures which allow that looking ahead of what needs to be done, which sectors need to be prioritized.

[Mari Pangestu]

So, predictability for investments to come in and even for the government as well as public funding to come in. Let me turn to the final question and get us back to the topic of financing. What you've described is going to require a scale of investment that will need financing. This is another big question that's going to be addressed at COP 27, where is the climate finance going to come from? Enough blah, blah, blah, as we heard at COP 26, and we heard Sri Mulyani very clearly say where's the money we need to do all this, but where's the money? And she even gave a number 270 billion in the case of Indonesia. So, where is this money going to come from? We heard private sector. The point being that I think concessional resources have to play a key role because a lot of these investments, including managing the dislocation of workers and so on, and no return or low return investments such as getting out of coal, need concessional resources. The World Bank is doing its part in terms of the climate. 35% of climate finance in our lending, half of that going to adaptation as well as looking at our capital adequacy framework, as you all know, we're looking at how we can get more resources with innovative instruments. What more do you think needs to be done to address this financing gap and private sector within that?

[Nicholas Stern]

I've emphasized the aggregate, an extra two trillion dollars or so as a flow to emerging markets and developing economies, excluding China by 2030, half of it internally financed. This will vary, of course, hugely across countries and half of it externally financed and the internal finance will be partly the public finances and partly the local capital markets and financial system. It's very important not to stick just with the aggregate because different kinds of activities that you've already run through that I've tried to indicate energy transition, the adaptation and resilience, natural capital, they'll need different kinds of finance and different aspects of the energy transition will need different kinds of finance. I haven't got time to go into it now but of course the overall debt position is going to be very important and quite a lot of countries are in real difficulties on that and that is something that has to be tackled at the same time. Putting that to one side, it's a big thing, but putting that to one side and going into the greater detail of the finance, I've already indicated the internal side of finance and that's critical because you're not going to get it all externally, it's going to be different in different countries. The internal finance is a crucial part of the story but looking at the external finance side, the private sector is going to be very important. For example, you'd expect in renewables, provided there's a decent investment climate for those investments that could mostly be funded from the private markets. For those investments to be made, you're going to need grid structures, grid structures that work and a lot of that will be public. Of course, the just energy transition, investing in people and places where there's been dislocation that will involve different kinds of finance and that latter one will really need finance which is not creating further debt service issues, concessionary finance, and there can be various ways. The philanthropies are getting together and that's very good. Even though the resources are limited, they can be significant and they can get to places not so easy to get to with other forms of finance. Voluntary carbon markets do not create debt service commitments and we need to structure them. Had I asked a question previously? I said we've got to find ways of aggregating, if it's all project by project you don't get an aggregate that you can devote in a strategic way for development, in particular adjust transition.

So those are examples, the private sector, the concessionary finance, but critically the multilateral development banks. We just had Makhtar here of course and you heard what the IFC is doing and what the EBID and the EIB and others are doing across the world working to bring down the cost of capital by assessing, managing, sharing, reducing risk. We've spoken about the investment climate and that's a part of reducing the risk and the revenues of the project. Bad things happen, you've got to manage the risks in projects and finance has a critical role there and the MDBs are really uniquely capable. In some countries, big enough and rich enough, they've got their own development banks but MDBs are uniquely capable of managing, reducing and sharing that risk. They're also specially placed to work with countries on the country platforms, investment climate and on their own public finances and developing, developing the carbon markets. All the rest of it, if it's going to function well, there's a big lot that's the rest of it, which I've been describing, it really keeps coming back to the role of the MDB. If you look at the numbers, given the kind of financing we need to do, you get, roughly speaking, that in the next five years or so, we need to see the volume in the MDB's tripling.

Now, this is not a rewriting of Bretton Woods. What it's saying is, here's a task, here are the institutions. We need them to be able to rise to the tasks that we have already defined. It's not just an aspiration, it's what we need to do. That is something where I think the discussion is really starting to move here in the Bank, it's moving in the other banks. We've heard from some of the shareholders, Janet Yellen, a week or so ago we heard Prime Minister Modi speak of the aggregate number in his Glasgow speech of flow of around a trillion a year. I think the major shareholders are starting to see what's necessary. I'm convinced the Bank is seeing what's necessary now. Get together and make it happen.

[Mari Pangestu]

Thank you very much, Nick. On that note, we will end our conversation today and thanks so much. I think the big takeaway is to go from the growth story to the implementation. We will need to work with countries so they come up with their investment plans on the low-carbon resilient transition but they need to be supported both on the knowledge analytics side as to what to do and the financing. And here, the concessional resources, including more concessional resources from MDBs will be key to make this happen. We need to act now because it is really the growth story, growth and development story of the 21st century.

[Nicholas Stern]

A delay is dangerous.

[Mari Pangestu]

Yes, delay is dangerous. Thank you very much, Nick, and thank you everybody.

[Nicholas Stern]

Thank you.

[Mercy Niwe]

Thank you so much, Marie and Lord Stern, thank you for that great discussion.

Now, people have been sharing their thoughts on this event online and on social media. I'm now joined by my colleague Sri Sridhar, who has been following this conversation from the beginning. Sri, what are you hearing?

[Srimathi Sridhar]

Thank you, Mercy, so good to see you. Warm welcome to those online and, of course, here in the room today. We have people joining the conversation on our Facebook, LinkedIn, Twitter and Instagram channels. They're using the hashtag for today's event, which is #PeopleAndClimate. They're here from countries such as India, Nigeria, Japan, Kenya, Indonesia, the United Kingdom and the United States. They're talking about the devastating consequences of climate change, but they're also talking about the innovative tools and investment requirements to address climate and development needs. I thought we could take a quick look at a couple of the comments that have come in on our social channels. The first one you'll see here on Facebook from Arfan Alkadrie in Indonesia who says, “we need more investments to scale up climate finance with investment instruments and funds available for everyone”. Another comment coming in on LinkedIn from Diana Davidson, who says, “we can tackle climate change by transitioning to renewable energy”. I think I know how she voted on the poll for today.

[Mercy Niwe]

I know that it's time for us for the drumroll, you have results for us for the poll. I promised our crowd that you will give us results. Yes, go ahead.

[Srimathi Sridhar]

We're going to deliver on that promise. The poll today asked what sector do you think could make the greatest difference in fighting climate change? So, five options here today. Is it A, energy, B, food, land use and agriculture, C, industry, D, transport or E, water? And Mercy, I have to ask, what is your pick?

[Mercy Niwe]

I would go for food, land use and agriculture.

[Srimathi Sridhar]

That's what I voted for too but why don't we look at the results, see if people agree with us. As they come in here, just to note, we had over a thousand people take part in today's poll. The numbers are now coming up here, 27% of people believe that energy is the most important sector, 40% of people agree with us, Mercy, it's food, land use and agriculture, 15% are going with industry, 11% transport, and finally 7% with water.

[Mercy Niwe]

Awesome. I'm excited that many people voted for B. Thank you so much, Sri.

[Srimathi Sridhar]

Thanks, Mercy.

[01:20:04.420] - Speaker 4

Hi, I'm Sajid from Dhaka Bangladesh, welcome to the World Bank Group-IMF Annual Meetings.

[Mercy Niwe]

We are almost at the end of this event, but let's just take a moment to recap on what we learned.

First, climate action is urgent, but it's slowing down because of multiple crisis and limited resources. We need much more climate finance, especially for adaptation and global public goods. Second, trillions of dollars can flow for climate action, but under the right conditions. We need climate and development diagnostics. We need to build capacity. We also need financing and de-risking tools that can crowd in investments and of course, much more. Third, carbon markets have great potential if we mobilize climate finance. That brings us to the end of this event on investing in people and the planet, the last public event of these 2022 Annual Meetings. You can watch this again and also watch previous sessions on investing in education, meeting Ukraine's financing needs, responding to the food and energy crisis, promoting inclusive growth, and the kickoff discussion between the leaders of the World Bank Group and IMF. You'll find them all at live.worldbank.org. Do share your comments and thoughts on these meetings using the hashtag #ResilientFuture.

We hope you've enjoyed hearing from our guest today.

Today, everyone here at the headquarters at the World Bank Group in Washington DC, and everyone watching us online, thank you so much for joining us for this Annual Meetings. Goodbye.

00:00 Welcome! Annual Meetings | Investing in People and Planet
03:03 The potential of carbon markets to help mobilize finance for climate action
Panel discussion with Annette Nazareth and Dirk Forrister, moderated by David R. Malpass.
31:03 Data in focus: Climate finance
34:18 Mobilizing private capital to finance climate action in emerging markets
Fireside chat with Makhtar Diop and Slawomir Krupa 
57:31 The Sahel: How climate finance can make a difference in the ground
01:00:39 Climate adaptation, policy landscape, energy transitions, COP27
Fireside chat with Mari Pangestu and Nicholas Stern 
01:17:33 Social media conversation and poll
01:20:12 Key takeaways and closure

QUOTES OF THE DAY 

“If we do that we have in our hands the growth story and the development story of the 21st century. It’s not that we can just put these two things together and do it right, climate and development. It’s stronger than that. The drive to net zero is driving the growth story of this century.”

– Lord Nicholas Stern, IG Patel Professor of Economics and Government, London School of Economics

QUOTES OF THE DAY 

“The good news is that many emerging countries have the renewable energy sources. How do we make sure  that the available money finds its way to the investment needs?"

– Slawomir Krupa, Head, Global Banking & Investor Solutions at Société Générale

QUOTES OF THE DAY 

Nobody can get to net zero alone. You're going to need partners. Cooperation on Article 6 is really the only hope the Paris Agreement will work.”

– Dirk Forrister, President and CEO, International Emissions Trading Association (IETA)

QUOTES OF THE DAY 

“Climate action is urgent, it needs to be done now. And it provides an opportunity for growth that is green, resilient, and inclusive.”

– Mari Pangestu, Managing Director, Development Policy and Partnerships, World Bank

Read The Virtual Q&A

Lead Climate Change Specialist, World Bank Group

Nelly Ky (Moderator):
Welcome everyone! Thank you for participating in our event, Investing in People and Planet: Financing the Low-carbon, Resilient Transition. I’m Nelly Ky with the World Bank, and I am delighted to be moderating today’s live chat.

Joining me in the live discussion is Carolina Monsalve, Lead Climate Change Specialist, and Alan David Lee, Senior Energy Specialist, who are on-hand to answer your questions. Your questions will enter a moderation queue, and our live experts will be answering in this chat.

We are live today in English with interpretation in Arabic, French, and Spanish.
Please continue to submit your questions and comments here on World Bank Live.
You can also follow the discussion on Twitter, using #PeopleAndClimate, and we invite you to vote in our interactive poll at the top of this web page.

Nelly Ky (Moderator):
To kick-off this morning’s program, we are pleased to have with us Mercy Niwe, Senior External Affairs Officer, World Bank, who will be our moderator.

Listed on this page you can see the speakers participating in today’s event.

Our moderator, Mercy Niwe, welcomes and sets the stage.

Moving right along, is the opening discussion featuring World Bank Group President David Malpass, who will moderate the conversation with:
•        Annette Nazareth, Chair of the Integrity Council for the Voluntary Carbon Market
•        Dirk Forrister, President and CEO of the International Emissions Trading Association

Allavo prosper:
What are the challenge and solutions to financing global public good and what is the role of private capital in the climate transition?

Carolina Monsalve/ World Bank:
@Allavo. To successfully achieve climate and development objectives, the world must mobilize trillions of dollars in the coming decade. Existing public, private, and concessional climate finance needs to be deployed in more transformative and catalytic ways, leveraging additional capital to bridge the gap between available resources and needs. The WBG will continue to play a critical role in mobilizing finance at scale for climate action. IBRD, IDA, and IFC have a financial model of issuing AAA-rated bonds in capital markets, which leverages scarce shareholder capital with substantial private capital mobilization (PCM). For example, since inception, IBRD has directly mobilized capital market resources to provide development financing volumes that are 40 times the amount of capital provided by shareholders. To understand more the challenges and the solutions please go to our Climate Change Action Plan at: https://openknowledge.worldbank.org/...

sboui:
Reordering the current ecosystem will order mother nature for the whole of well-being...

Nelly Ky (Moderator):
Mercy Niwe introduces the next discussion, a Fireside chat on Getting Capital Flowing: Private Sector Players and the Climate Transition with Makhtar Diop, Managing Director and Executive Vice President, IFC, Slawomir Krupa, Head, Global Banking & Investor Solutions, and future CEO, Société Générale.

 

Nelly Ky (Moderator):
Please stay tuned for a Data visualization on climate finance.

Dr. Huda AbdelHamid:
On what criteria you decide the kind of projects that will have the most impact on reducing the effect of climate change?

Carolina Monsalve/ World Bank:
@Dr Huda Abdel Hamid. Our new country-focused diagnostic Country Climate and Development Reports (CCDRs) focuses on the interplay between development and climate change. CCDRs are firmly anchored in a country’s development goals and they include detailed analysis of what countries need to do reduce their vulnerability to climate and what actions can support low carbon development. These reports identify high priority interventions, whether in the form of investments or legal, policy and regulatory reforms. To learn more: https://www.worldbank.org/....

Eng.CHINJENGE Lloyd Lishandu:
How is the World Bank enhancing renewable energy investment in Africa?

Alan Lee / World Bank Expert:
@Eng.CHINJENGE Lloyd Lishandu: "How is the World Bank enhancing renewable energy investments in Africa?" The World Bank supports a comprehensive approach to sustainable energy for all in Africa. This includes extending and upgrading grid electricity from clean sources with support for effective power utilities and planning for a just transition, and giving rural communities access to affordable renewables through mini-grids and solar-home systems. For example, see the "Scaling Solar" platform which brings together services to reduce risk to foster solar investment across client countries including from private sources https://www.scalingsolar.org/

Sean:
How do we ensure that the poorest countries that stand to benefit from carbon trading are able to adhere to a common standard the same way richer countries can?

Carolina Monsalve/ World Bank:
@Sean. The World Bank Group supports a number of projects in Africa that lower greenhouse gas emissions and earn carbon credits. Many of these projects and programs are located in least developed countries and have an important impact on poor communities, creating jobs and improving health and education through The use of carbon revenue for The benefits of communities. To learn more go to : https://www.worldbank.org/...

CETE:
What could those countries that produce the raw materials necessary for the energy transition, do to leverage their geopolitical position to demand that investments are made to add value to raw materials at the point of extraction, for battery storage solutions, for example?

Alan Lee / World Bank Expert:
@CETE Renewable technologies such as battery storage systems, low-carbon hydrogen, solar panels, wind turbines as well as the required expansion of transmission infrastructure, rely on minerals and metals. The energy transition is expected to massively boost demand for these minerals and metals. To attract investors, developing countries need to embrace robust environmental, social, and governance standards that protect communities, and the environment. Developing countries will also have to plan and invest strategically to decarbonize their production and ensure their competitiveness in a low-carbon economy. But decarbonization of the value chain is also expected to reshape mineral supply chains and create new opportunities for value addition via processing and manufacturing. Our recent report, Minerals for Climate Action, looks at these issues. To learn more go to : https://www.worldbank.org/...

Gael:
Will the emissions reduction projects (to be financed by the new WB fund) follow the EB Environmental and Social Standards?

Carolina Monsalve/ World Bank:
@Gael. The Scaling Climate Action by Lowering Emissions (SCALE) fund will provide grants to developing countries as they deliver pre-agreed results in reducing greenhouse gas emissions. The new fund will be launching at COP27.

Nelly Ky (Moderator):
Please stay tuned for a short video on how climate finance can help the Sahel region tackle climate change.

Maristellah Moraa:
How is World Bank investing in local communities in green energy?

Alan Lee / World Bank Expert:
@Maristellah Moraa: "How is World Bank investing in local communities in green energy?" Previous questions and answers describe rural and off-grid electricity with renewables. A key focus of recent efforts has been support for health facilities https://blogs.worldbank.org/... In addition the World Bank is supporting clean cooking and heating, see https://www.esmap.org/clean-cooking-fund

Nelly Ky (Moderator):
Mari Pangestu (MDDPP, WB) and Nicholas Stern (IG Patel Professor of Economics and Government, London School of Economics) will close the session with a discussion on financing climate action.

kamegneson brel:
what strategy will the world bank put in place to promote agriculture in the world?

Carolina Monsalve/ World Bank:
@ kamegneson brel. The World Bank’s approach to agriculture can be found in its Climate Change Action Plan. To learn more go to : https://openknowledge.worldbank.org/... (pdf)

Dauson Msumange:
Dauson Msumange from Tanzania-East Africa: Plastic wastes has been one of the Climate query to figure out; why do we allow un-necessary industrialization based on plastic packaging tools? Why don't we stop plastic producing industries (Big fishes) and reduce effort of dealing with small fishes; the consumers?

Carolina Monsalve/ World Bank:
@Dauson Msumange. The World Bank Group is committed to tackling plastic pollution, recognizing it as a key element in alleviating extreme poverty. Today the World Bank Group supports efforts in more than 50 countries around the globe and at every stage of the plastic lifecycle. To learn more go to: https://www.worldbank.org/...

Maxwell kemei:
How can we make solar power cheap and affordable to rural communities in sub- sahara africa.

Alan Lee / World Bank Expert:
@Maxwell kemei: "How can we make solar power cheap and affordable to rural communities in sub- sahara africa?" This requires a multi-pronged approach to reduce risks for private sector investments, strengthen public institutions and engage local partners and communities to aggregate demand for solutions at scale. Political leadership for policies and regulations is also important. Burkina Faso, which enjoys one of the best solar radiation conditions in Africa, is a successful example where, with support from the World Bank, the country is deploying solar energy to power mini-grids and individual household systems. Solar power with battery storage is competitive in Burkina Faso compared to other technologies and its government was successful in attracting private sector investments to support this technology.
https://blogs.worldbank.org/...

Carolina Monsalve/ World Bank:
To see how lower income countries can benefit from climate action, the recent CCDRs for the G-5 Sahel region is a good starting point. The diagnostic provides a roadmap to help countries scale up reforms and investments to diversify their economies in more resilient and inclusive ways. It provides pathways to re-green these economies by restoring degraded land and boosting economic opportunities for communities through programs such as the Great Green Wall Initiative. To learn more go to: https://www.worldbank.org/...

Andrea Fonseca:
what about nature credits or something similar to address biodiversity loss

Carolina Monsalve/ World Bank:
@Andrea Fonseca. Public funds are insufficient to reverse biodiversity loss. A new World Bank Group report looks at current state of play for private finance for biodiversity and ecosystem services. To learn more go to https://www.worldbank.org/...

Lance Marshall:
Thanks!

Dr. Robert Ddamulira:
On the previous conversation, nearly 70% of all climate finance is going to East Asia ( appox. $300bn of the available $420 bn), could you explain why?

Carolina Monsalve/ World Bank:
@Dr Robert Ddamulira. A large fraction of the climate finance flows to East Asia went to China. These flows were directed to mitigation, with photovoltaic (PV) solar and onshore wind power attracting the largest portions. A large part of this mitigation finance was provided by public actors led by national development finance institutions and state-owned financial institutions.

Narottam:
What can the World Bank do to help member countries promote private sector financing and help accelerate private development of clean energy solutions?

Alan Lee / World Bank Expert:
@Narottam: "What can the World Bank do to help member countries promote private sector financing and help accelerate private development of clean energy solutions?" The World Bank analyzes and advises on opportunities to maximize finance for development and mobilize private capital especially for clean energy in a number of ways. These include country-specific Infrasture Sector Assessment Programs (InfraSAPs), Regulatory Indicators for Sustainable Energy (RISE) to track reforms needed across countries for renewables and energy efficiency, and the Sustainable Renewables Risk Mitigation Initiative (SRMI). Country Climate and Development Reports (CCDRs) are being prepared for all client countries that identify priority policy actions including for clean energy. Many World Bank Group programs at country-level with IFC and MIGA provide investments and policy loan projects with private capital mobilization for renewables and efficiency.

what intervetions can be taken aganist unpredictable rain session in south saharan contries ?:
How is the Word bank helps African countries reform their education curriculum, enabling understanding climatic change impacts and actions against?

Titu:
You have to rob Peter to pay Paul. In developing countries, who will invest in whom? How will they finance low-carbon transition if rich nations do not share the cost?

Carolina Monsalve/ World Bank:
@Titu. Climate change, which is affecting an increasing number of sectors is putting further pressure on the domestic public resources available for climate action. Governments are, however, still spending billions each year on inefficient subsidies that not only decrease the resources available for priority expenditures but are counterproductive with regards to climate action. An essential priority is for governments to adopt adequate policies and identify, design, and implement impactful projects and programs. The private sector has significant resources to contribute toward climate and development objectives, but long-standing barriers must be removed for private capital to flow at the requisite scale. Official development assistance, in the form of both concessional financing and grants, will also need to be stepped up.

WBG support will be provided along six areas: (i) leveraging analytics to support development of appropriate climate and other policy reforms, climate-informed public and private investment plans and mainstreaming climate in public financial management systems (ii) helping to develop effective carbon pricing and carbon markets; (iii) removing barriers to private capital flows and developing replicable climate investment approaches; (iv) greening the financial sector, including capital markets; (v) supporting the scale up of financing for climate adaptation and resilience; and (vi) optimizing the delivery of concessional resources. 

AgborDavid:
How can the poor make use their natural heritage like timber and many other trees without affecting the climate negatively?

Carolina Monsalve/ World Bank:
@agbor.david: Forests and all terrestrial ecosystems support livelihoods and provide much-needed employment opportunities. They also provide critical ecosystem services such as habitat for biodiversity, provision of drinking water, and carbon sequestration. Deforestation and forest degradation contribute about 12% of the world’s greenhouse gas emissions. Investment in planting trees and forest conservation is urgently needed as many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities. To learn more how the World Bank is supporting forests for people and climate go to: https://www.worldbank.org/...

Njekwa:
What is the single top most cause of Climate change ?

Carolina Monsalve/ World Bank:
@njekwal. The evidence is clear: the main cause of climate change is burning fossil fuels such as oil, gas, and coal. Coal is the dirtiest, most polluting way of producing energy. Not only does it pose the greatest threat to our climate, mining and burning coal also threatens our health. Moving away from coal is crucial to achieving the goals of the Paris Agreement. This is a major undertaking that requires dedicated support at the macroeconomic and fiscal levels and across multiple sectors. The World Bank will significantly step up financing and advisory support for a just transition from coal to client countries that request it. The World Bank Group’s Climate Change Action Plan makes a priority out of a Just Transition from Coal. To learn more go to: https://tinyurl.com/8d5b5bpd (pdf)

DrFarzana:
Do you have any plan to consider Bangladesh as the country is vulnerable to the effects of climate change?

Carolina Monsalve/ World Bank:
@drfarzana. Thanks to decades of systematic investments in climate resilience, Bangladesh has married impressive economic growth with savvy cyclone preparedness to become a global leader in disaster risk reduction. In our recently published report, Bangladesh: Enhancing Coastal Resilience in a Changing Climate, a roadmap has been laid out for the country to strengthen the resilience of its coastal region in the face of a changing climate to protect its development gains. This report complements the forthcoming Bangladesh Country Climate and Development Report (CCDR), the World Bank Group’s new core diagnostic report that integrate climate change and development considerations. To learn more: https://openknowledge.worldbank.org/...

Addisu Girma Gudina:
One main cause of climate change is expansion of air polluting industries. So, what will be the plan of financial support to countries that have large forest resources?

Carolina Monsalve/ World Bank:
@Addisu Girma Gudina. Forests and all terrestrial ecosystems support livelihoods and provide much-needed employment opportunities as communities build back from COVID-19. They also provide critical ecosystem services such as habitat for biodiversity, provision of drinking water, and carbon sequestration. Deforestation and forest degradation contribute about 12% of the world’s greenhouse gas emissions. Investment in planting trees and forest conservation is urgently needed as many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities. To learn more how the World Bank is supporting forests for people and climate go to: https://www.worldbank.org/...

mussa:
in Tanzania we have many resources like mountain Kilimanjaro

Babar Hilal:
Pakistan became victim of disastrous event of climate change through the unexpected torsion rain in southern area what have you opinon it true and if yes what else world community and world Bank can do in compensation and resilience

Carolina Monsalve/ World Bank:
@Babar Hilal. Pakistan is among the world’s top ten countries most affected by climate change. As a response to the exceptional floods, the World Bank is repurposing funds from existing financed projects to support urgent needs in health, food, shelter, rehabilitation, and cash transfers. In addition to this, we are working with the federal and provincial authorities to prepare emergency operations to quickly start the reconstruction and rehabilitation to rebuild or repair infrastructure, housing and restore livelihoods, and to help strengthen Pakistan’s resilience to climate-related risks. To learn more go to: https://tinyurl.com/489pczpj

Silver owori:
What Role have Non governmental organizations played in climate and is there away we can involve the youth in this cause cos iwould love to participate

Carolina Monsalve/ World Bank:
@owori. Civil society has a critical role to play in the climate agenda in a number of ways. First the CSO community is composed of some of the world’s greatest experts on global development issues. Second, CSOs can hold governments and international institutions accountable to their existing commitments. Third, CSOs can help communicate in a way that is more accessible to citizens. At the World Bank we want to empower young people and together contribute to its twin goals: ending poverty and investing in opportunity. For more on how the World Bank is supporting youth, see https://www.worldbank.org/en/programs/youth

Umar Aliyu Garba:
Developing Electric cars for a zero emissions goal, through assessment of production process for electric parts and batteries, it can be seen emissions are not close to being reduced.

Carolina Monsalve/ World Bank:
@Umar Aliyu Garba. All transport modes must be considered for feasibility when implementing e-mobility solutions. In some circumstances, e-mobility is a powerful tool to shift toward cheaper and more efficient modes—for instance, from cars to e-bikes and e-buses—and increase access to opportunities for many. Over the past few years, global prices of batteries have been reducing as production ramps up, but its important to look at the total cost of ownership, including long-term recycling and disposal costs. Maximizing the climate benefits of electric mobility requires collaboration and coherent policymaking across sectors: transport policies should support sustainable modes, the energy sector must work to provide cleaner electricity sources, and urban development must promote compact cities that reduce the need for unnecessary travel. To learn more go to: https://www.sum4all.org/... (pdf)

Awantu Christian Funwi:
Many countries in the world still rely enormously on fossil fuels to sustain their economies and for development, reason why they are still very adamant to the zero carbon transition. So what is the world bank doing to ensure that such countries see reasons to change their minds?

Carolina Monsalve/ World Bank:
@Awantu Christian Funwi. In 2021, the World Bank Group announced a new core diagnostic report, the Country Climate and Development Reports (CCDRs), to analyze how each country’s development goals can be achieved in the context of mitigating and/or adapting to climate change. They are tailored to country circumstances and are being prepared for fossil fuel countries. To learn more about CCDRs: https://tinyurl.com/2hufuwha. To learn more about diversification strategies  for fossil fuel producing countries: https://openknowledge.worldbank.org/...

leenwal10:
Is really whole world moving on the track of achieving goal of 'zero carbon'?

Carolina Monsalve/ World Bank:
@leenwal10. Climate impacts and risks are becoming increasingly complex and more difficult to manage. Even temporarily exceeding 1.5°C warming will result in additional severe impacts, some of which will be irreversible.The evidence from the IPCC is that we are not on track to limit warming to 1.5°C.: average annual GHG emissions during the last two decades were the highest in human history.But the evidence is clear: the time for action is now. With the right investments and policies we can halve emissions by 2030. To learn more how the Bank Group is supporting clients achieve their climate goals go to: https://openknowledge.worldbank.org/...

Yudathade Evarist Assey:
How do you assist the farmers who failed to get production to their farms due to low rainfall as a result of climate changes in africa especially in Tanzania?

Carolina Monsalve/ World Bank:
@Yudathade Evarist Assey. Climate change’s negative impacts are already being felt in agriculture, in the form of increasing temperatures, weather variability, shifting agroecosystem boundaries, invasive crops and pests, and more frequent extreme weather events. The World Bank’s approach is to support clients, through our lending and non lending operations adopt climate smart agriculture: an integrated approach to managing landscapes that addresses the interlinked challenges of food security and accelerating climate change. To see what this can look like for Tanzania, go to: https://cgspace.cgiar.org/...

Mulawa hassan:
How can we control the pollution of air that the industry sectors has come out with especially in Africa where investors are running to put up industries without control of the bad gas that comes out of them?

Carolina Monsalve/ World Bank:
@Mulawa Hassan. Pollution takes an unacceptable toll on health and human capital, as well as associated GDP losses. The World Bank is supporting pollution management which offers no-regrets options that can alleviate poverty, boost shared prosperity, and address the vital demands of millions of people for healthier and more productive lives and can also make substantial contributions to climate change mitigation through actions such as reduction of black carbon and methane emissions, which contribute to both air pollution and climate change. For more info on what the World Bank is doing to support client countries address pollution, go to: https://www.worldbank.org/en/topic/pollution

Elisjana Hitaj:
What should you do for secure food

stop deforestation:
Can we do this?Let's create financial fund for forest resources: stop deforestation. Countries with large forest stocks would then have financial compensation and an incentive to protect and increase forests.

Carolina Monsalve/ World Bank:
@Elisjana Hitaj. As part of a comprehensive, global response to the ongoing food security crisis, the World Bank Group is making up to $30 billion available over a period of 15 months in areas such as agriculture, nutrition, social protection, water and irrigation. This financing will include efforts to encourage food and fertilizer production, enhance food systems, facilitate greater trade, and support vulnerable households and producers. To learn more go to: https://www.worldbank.org/...

Ojok Richard:
Water is becoming scarcer in more regions. Droughts can stir destructive sand and dust storms that can move millions of tons of sand across region. Semi deserts are expanding, reducing land for growing food. Many people now face the threat of not having enough water on a regular basis. What advise can you give Ugandans and the government on this problem.

Carolina Monsalve/ World Bank:
@Ojok Richard. Climate and disaster risks, including drought and desertification, threaten economic growth and development gains globally. In response to these challenges, the World Bank and partners have set up programs to strategically tackle drought, desertification, and impending climate risks. Climate-smart agriculture is an alternative approach to managing land sustainably whilst increasing agricultural productivity. It includes land management options that sequester carbon and enhance resilience to climate change. Proven climate-smart practices such as agroforestry, integrated soil fertility management, conservation agriculture, and improved irrigation can ensure that land is used optimally, restored and managed in a manner that maximizes ecological, economic and social benefits.

Jake Schmidt:
Will the WBG commit to increase its climate finance share to 50% by 2025?

Carolina Monsalve/ World Bank:
@jschmidt. The World Bank Group set an ambitious 35% target for its climate finance over FY21-FY25, as a key element of its Climate Change Action Plan. Many areas of intervention, such as health and education, generate little in the way of climate finance but are critical for our clients' development goals and to reduce extreme poverty. We believe our target is ambitious and is supportive of climate and development. We have increased efforts to better track the impact of our climate interventions and at a strategic level to ensure that we invest in the highest impact interventions, the latter through our new Country Climate and Development Reports (CCDRs). To learn more about CCDRs, go to: https://tinyurl.com/2hufuwha.

Linda Nokuri Ebai:
How do we share the climate change Urgency with the government's in the developing world to get them to prioritize this. 

Carolina Monsalve/ World Bank:
@Linda Nokuri Ebai. A critical aspect of the Bank Group’s Climate Change Action Plan is to integrate climate and development, as we need to support our client countries identify and implement climate actions that also further their development goals, such as growth and reducing poverty. Our new diagnostic the Country Climate and Development Reports (CCDRs) are designed specifically to identify and analyze the disconnects between climate and development policies, identifying the highest-impact actions to reduce GHG emissions and build resilience that also deliver on broader development objectives. To learn more go to: https://tinyurl.com/2hufuwha.

CAKAU:
Do you have any plans to consider the climate change in Fiji especially the very remote islands such as Druadrua Islands. Their islands has been tremendously affected in the last TC and sand erosion has been affected the community. Need seawall

Carolina Monsalve/ World Bank:
@CAKAU. Pacific Island countries are some of the most vulnerable in the world to the effects of climate change and disasters and Fiji is no exception. The compounding impacts of the COVID-19 pandemic and ongoing climate and disaster shocks on Pacific Island countries will continue to pose major challenges for the region into 2022 and beyond. With climate impacts intensifying every dollar spent now on adaptation will spare us from far higher costs in the years to come. The World Bank is supporting Fiji’s ongoing recovery from the immense shocks of the COVID-19 pandemic that exacerbated the impacts of recent natural disasters. For a concrete example of support on the ground go to: https://www.worldbank.org/...

Brighton Shoniwa:
Africa has vast tracks of agricultural land but was one of the most affected regions when grain exports by Ukraine were halted because of the war. How can African agriculture be sustainably financed?

Carolina Monsalve/ World Bank:
@bshoniwa: Despite continued progress, poverty remains unacceptably high and is becoming increasingly concentrated in Sub-Saharan Africa. Poverty is also increasingly prevalent in countries that are dependent on natural resources and in fragile and conflict- affected states. Adverse impacts from climate change are also expected to pose significant obstacles to poverty reduction. To end extreme poverty and boost shared prosperity, the World Bank urges countries to pursue broad-based economic growth, invest in people, and insure the poor and vulnerable against ever-changing risks. To see the latest report on Poverty and Shared Prosperity go to: https://www.worldbank.org/...

Annie:
Why should developing countries pay for climate risk insurance when they are the least contributors to GGE? Shouldn't high carbon contributor countries pay for it on their behalf, as a means of compensating them, considering that access to climate change funds is tedious and time consuming?

Carolina Monsalve/ World Bank:
@Annie. Climate risk insurance products are climate finance innovations that promote adaptation and resilience at the sovereign level, delivering real benefits for client countries. For example, with co-financing from a World Bank administered multi-donor trust fund (MDTF), the Caribbean Catastrophe Risk Insurance Facility Segregated Portfolio Company (CCRIF SPC) offers sovereign insurance for earthquakes, tropical cyclones, and excess rainfall to Caribbean and Central American countries. Currently, 19 countries in the Caribbean and 3 in Central America have memberships that through the years translated into 54 payouts totaling $245 million benefiting over 3.5 million people. To learn more go to: https://www.worldbank.org/...

KABBIS Lorseh:
Should we continue to cut down trees for fire coal?

Carolina Monsalve/ World Bank:
@Kabbis Lorseh. Forests and all terrestrial ecosystems support livelihoods and provide much-needed employment opportunities as communities build back from COVID-19--it is crucial to preserve them to preserve livelihoods. They also provide critical ecosystem services such as habitat for biodiversity, provision of drinking water, and carbon sequestration. Deforestation and forest degradation contribute about 12% of the world’s greenhouse gas emissions. Investment in planting trees and forest conservation is urgently needed as many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities. To learn more how the World Bank is supporting forests for people and climate go to: https://www.worldbank.org/...

Madeline Kiser:
Given that only until very recently, water policy wasn't included in climate- and biodiversity planning, how, now that it is, to ensure that water policy is truly equitable? This, especially given that corporations and private financing have an increasingly powerful voice in water discussions, especially in key basins. Why should we assume that corporate financing of water policy will advocate to protect nature in the long run and for the common good, when their purpose is to bring profits to shareholders in the short run?

Carolina Monsalve/ World Bank:
@Madeline Kiser. The impacts of climate change will be channeled primarily through the water cycle, with consequences that could be large and uneven across the globe. Water-related climate risks cascade through food, energy, urban, and environmental systems. Growing populations, rising incomes, and expanding cities will converge upon a world where the demand for water rises exponentially, while supply becomes more erratic and uncertain. If current water management policies persist, and climate models prove correct, water scarcity will proliferate to regions where it currently does not exist, and will greatly worsen in regions where water is already scarce. At the World Bank we have been working for a number of years to link water and climate, in our lending operations and analytics. Take for example our report from 2016: https://www.worldbank.org/...

Linda Nokuri Ebai:
How to we get developing countries to prioritize climate change and include it in their annual budgets in the next two to three decades.

Carolina Monsalve/ World Bank:
@Linda Nokuri Ebai. Public finance and domestic resources, including state-owned banks, will be critical to financing global public goods, such as adaptation, mitigation, and a just transition. In line with our Climate Change Action Plan, the WBG is helping client countries increase resources for climate action and build fiscal buffers to prepare for climate-related shocks through domestic public finance (including financing released through asset recycling) and realigning incentives through fiscal policy. . The Bank will help countries to adopt a budgeting approach that prioritizes climate-responsive investments to move from greening projects to greening economies. A recent World Bank report looks at experience with climate change budget tagging—for more information go to: https://openknowledge.worldbank.org/...

zafar Abbas:
President David Malpas always talking about the Morocco model for sustainable development. Can You little brief about the Morocco model? How such model will impact on the poorest people?

Carolina Monsalve/ World Bank:
@Zafar Abbas. Morocco’s New Model of Development (NMD) aims to create more wealth and strengthen the status of citizens, while enhancing their skills and capabilities. In the area of sustainable development it aims to launch several programs on the preservation of biodiversity, water resources and the prevention of pollution as well as climate change. The World Bank Group is commitment to supporting Morocco’s development programs, To learn more go about the NMD go to: https://www.csmd.ma/... (pdf)

Journalism or Mass Communication:
Any attempt to address poverty in the poverty stricken communities, of the developing countries?

Mark G. Boakai:
How can we prevent climate change when deforestation is on going everyday?

Carolina Monsalve/ World Bank:
@Mark G Boakai. Forests and terrestrial ecosystems support livelihoods and provide much-needed employment opportunities. They also provide critical ecosystem services such as habitat for biodiversity, provision of drinking water, and carbon sequestration. Deforestation and forest degradation contribute about 12% of the world’s greenhouse gas emissions. Investment in planting trees and forest conservation is urgently needed as many of the world’s remaining forests are under increasing threat due to agriculture expansion, timber extraction, fuelwood collection and other activities. To learn more how the World Bank is supporting forests for people and climate go to: https://www.worldbank.org/...

Carolina Monsalve/ World Bank:
The World Bank is providing support to clients for better education and research on climate change and its impact. Perhaps the best and most obvious example comes from the Africa Higher Education Centers of Excellence (ACE) program. The World Bank, in a series of projects in support of 20 sub-Saharan African governments, has provided more than $580M to 77 centers in 55 universities. More than 24,000 students have enrolled in postgraduate (and select bachelors) degree programs. For example, the ACE in Coastal Resilience (ACECoR) in Ghana, is building technical and scientific capacity to develop integrated solutions to address coastal degradation. To learn more go to: https://blogs.worldbank.org/...

Nelly Ky (Moderator):
This concludes our event. Please stay tuned for the event recording, which will be posted on this web page.

Nelly Ky (Moderator):
Visit our websites for more information about the World Bank's Climate Change Action Plan:
Climate Change Action Plan (2021-2025)
World Bank Group President’s Statement on Climate Change Action Plan (mentions Paris Alignment)
Climate Change Action Plan Explainer
Story: Five Years of Climate Leadership (Bank's first Climate Change Action Plan)

Nelly Ky (Moderator):
Check out these factsheets:
10 Things You Didn’t Know About the World Bank Group’s Work on Climate Change
10 Things You Should Know About the World Bank Group’s Climate Finance
World Bank Group Is Leading the Effort on Methane Emissions Reduction with Impactful Projects and Initiatives

Nelly Ky (Moderator):
Tune in to these informative podcasts:
Financing Net Zero: Can Banks and Investors Help Prevent the Climate Catastrophe?
From Coal to Clean Energy: Protecting People Through the Transition
Financing Net Zero: Can Banks and Investors Help Prevent the Climate Catastrophe

Nelly Ky (Moderator):
Learn more about our Country Climate Development Reports:
Landing page: Country Climate and Development Reports
Video: How Can Countries Navigate Climate and Development Challenges?
Explainer: What You Need to Know About Country Climate and Development Reports
Blog: Getting it right on development: We do not have to choose between people and climate

Reports:
Nepal
Rwanda
Sahel
Türkiye
Vietnam

Nelly Ky (Moderator):
Again, thank you for participating!

Poll Results

What sector do you think could make the greatest difference in fighting climate change?

Energy
30% (158 votes)
Food, Land Use and Agriculture
35% (184 votes)
Industry
12% (64 votes)
Transport
18% (95 votes)
Water
4% (21 votes)
Total votes: 522

IMF World Bank Group Annual Meetings 2022 Livestreamed events

Join us for a series of live events on today’s pressing development challenges.

Oct. 10: Curtain Raiser
Oct. 11: Civil Society Townhall
Oct. 11: Inclusive Growth
Oct. 11: Food and Energy
Oct. 12: Ukraine Ministerial Roundtable
Oct. 12: Investing in Education
Oct. 13: Press Conference
Oct. 13: People and Planet
Oct. 14: Annual Meetings Plenary
Oct. 15: State of Africa Region
Oct. 15: Human Capital Conclave

Available with interpretation in ArabicFrench and Spanish.