The World Bank and other multilateral development banks have tried to position themselves at the forefront of financing climate change measures and to support a wide range of activities in low- and middle-income countries. They are now under pressure to show that all of their investments are helping to bring low-carbon countries and make the Paris agreement a reality. For more information on these and other announcements, see: www.worldbank.org/climate With the adoption of a global agreement on climate change on December 12, the World Bank Group is moving quickly to help countries meet the commitments made in Paris. The banking group is also looking for ways to encourage overall emission reductions by expanding and deepening carbon markets. Since the creation of the world`s first carbon fund, supported more than a decade ago, the group has raised $4.36 billion through 18 CO2 funds and initiatives and supported 145 active projects in more than 75 client countries. “We welcome the historic agreement just reached in Paris,” said Jim Yong Kim, President of the World Bank Group. “The world has come together to forge an agreement that finally reflects the aspiration and seriousness to preserve our planet for future generations. The World Bank Group is ready to help immediately and will do everything in its power to achieve this vision. It is difficult for GMOs to find institutional positions on what exactly the Paris agreement requires, as this can vary considerably from country to country, according to bank officials. The agreement is based on a system of “nationally defined contributions” so that what helps one country move towards a carbon-free economy could be a step in the wrong direction for another country. Last year, the World Bank committed to achieving important new climate goals, including doubling its climate funding over the next five years to about $200 billion and significantly increasing its support for climate change adaptation. While these commitments are welcomed by climate activists, they do not automatically mean that the Bank`s overall portfolio is in line with the objectives of the Paris Agreement.
For the Bank, this means that financing a project involving high CO2 emissions in a country could be in line with the Paris Agreement targets – depending on the allocation of the global carbon budget – while the same project could be summed up elsewhere to support a harmful INDUSTRY in CO2 emissions. The first challenge is to reach a common understanding of what “Paris harmonization” means for multilateral development banks.