Mainstreaming Climate Change Considerations at the Multilateral Development Banks

This brief investigates the limited extent to which climate change issues have been included in the World Bank Group’s country assistance strategies, energy-sector loans and project lending and recommends structural reforms to improve Bank lending practices. In the last five years, more than 80 percent of all World Bank lending in the energy sector did not even consider climate change in project loans.

Additionally, the brief reviews national obligations under the Framework Convention on Climate Change (noting commitments by countries to develop national mitigation programs), as well as current actions being taken by key World Bank clients.

If multilateral development banks (MDBs) like the World Bank were to identify the additional costs of financing greenhouse gas emissions reductions, it would help mobilize the international community to finance these costs. To this end, the new WRI report recommends that the World Bank and other MDBs:

• Revise guidelines for country and sector strategies to explicitly integrate climate change considerations
• Develop a GHG accounting and options analysis framework
• Integrate the analysis framework into operations in key sectors, and
• Initiate pilot work to reduce GHG emissions at the sector level in partnership with interested client countries