According to the analysis “Climate and Development: An Agenda for Action,” investing an average of 1.4% of gross domestic product (GDP) yearly could reduce emissions in developing nations by as much as 70% by 2050 and build resilience.
- The analysis, “Climate and Development: An Agenda for Action,” collects and harmonizes findings from the Country Climate and Development Reports (CCDRs) of the World Bank Group (WBG), which cover more than 20 countries and are accountable for 34% of global greenhouse gas (GHG) emissions.
These 20 countries are: Argentina, Bangladesh, Burkina Faso, Cameroon, Chad, China, Arab Republic of Egypt, Ghana, Iraq, Jordan, Kazakhstan, Malawi, Mali, Mauritania, Morocco, Nepal, Niger, Pakistan, Peru, Philippines, Rwanda, South Africa, Türkiye, and Vietnam.
The report is being published ahead of the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) in Sharm El Sheikh, Egypt, where climate adaptation will be discussed.
Major Findings from the Analysis:
i.The research emphasized that developing and emerging economies have different investment needs.
- Low-income countries often have higher investment demands, requiring up to 8% of their GDP.
- Likewise, it is 5.1% in lower-middle-income countries and 1.1% in upper-middle-income countries.
- The report stated that both low-income and low-middle-income countries are unprepared to deal with the effects of climate change.
ii.The Sahel, Rwanda, Cameroon, and Pakistan will be unable to distinguish between climate-related demands and development needs unless infrastructure gaps are addressed.
- The Sahel is highly prone to climate shocks, such as droughts, floods, and land degradation.
iii.According to the report, “Access to capital markets and private capital is more limited in the nations that have contributed least to global warming and where climate-development financing needs are bigger as a percentage of GDP.”
- Türkiye will gain USD 146 billion (1% of GDP) from reduced energy imports and lower air pollution between 2022 and 2040, as the path to low-carbon and resilient economies necessitates major investments.
i.The CCDRs 2022 had focused on yet-to-be-commercialized technologies such as green steel, carbon capture and sequestration, and green hydrogen.
ii.Well-prioritized climate actions, strong private sector participation, significant global funding, and a fair transition can all contribute to favourable outcomes.
iii.While countries with poor credit ratings or high perceived risks receive minimal funding for mitigation measures, renewable energy projects in low-income and middle-income countries require enormous investments.
- The World Bank suggested strengthening institutions and policies to lower these risks, and access to concessional capital can stimulate private sector investment.
iv.High-income countries responsible for historical emissions must decarbonize promptly while increasing financial assistance to low-income countries.
Recent Related News:
In September 2022, Auguste Tano Kouamé, a citizen of Côte d’Ivoire, took charge as the World Bank’s Country Director for India with effect from 1st August 2022. He replaced Junaid Kamal Ahmad who recently completed a 5-year term. He has served as the World Bank’s Country Director for Türkiye.
About World Bank Group (WBG):
The World Bank Group consists of 5 organizations: International Bank for Reconstruction and Development (IBRD); International Development Association (IDA); International Finance Corporation (IFC); Multilateral Investment Guarantee Agency (MIGA); International Centre for Settlement of Investment Disputes (ICSID).
- Together, IBRD and IDA make up the World Bank (WB).
President – David Malpass