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Muthukumara Mani
Senior Environmental Economist
World Bank
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 ]limate ]hange and Poverty
2 ]ontinuing climate change at current rates will pose
increasingly severe challenges to development (WDR 2010).
2 Poor countries and poor people in all countries will be most
affected by climate change and are also most dependent on
environment and natural resources .
2 To stabilize atmospheric concentrations of GHGs at levels
that may be considered ¶safe·, estimates suggest the additional
investment costs for mitigation could be anywhere between
US$200 billion to over US$1 trillion per annum.
2 At least tens of billions of U.S. dollars per year should be
added to finance the cost of adaptation due to the inevitable
amount of warming that the world would experience.

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Adaptation Financing Needs
˜
  

World Bank US$4±37 billion/annum
(CEIF) as
revised by
the Stern
Review

Oxfam US$8±33 billion

UNFCCC US$28±67 billion in 2030

UNDP US$86 billion/annum by 2016

(HDR 2007±
08)

WDR US$30-100 billion a year

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 Adaptation Financing
2 In a very real sense development is the best
adaptation ² investing in skills, health, knowledge,
better infrastructure and a more diversified
economy will render countries more climate-
resilient.
2 The traditional public sector role of investing in
human capital and infrastructure, creating the
enabling environment for private sector growth,
and providing public goods is, if anything, more
urgent in the context of climate change.
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 Adaptation Financing+
In addition, the public sector plays three key roles:

2 ¶climate-proofing· public infrastructure investments

2 providing public goods that will enable effective private actions on
adaptation (research and development on new technologies such
as drought-resistant crops, providing weather forecasts and climate
risk assessments, and agricultural extension services)
2 establishing the policy framework for adaptation, which sets the
incentive framework for private sector action.
u (i) pricing policies that encourage efficient use of energy, water,
agriculture and other natural resources;
u (ii) fiscal incentives for research and development to exploit existing
technologies or develop new ones in the energy, water-supply,
agricultural, forestry, and livestock sectors; and
u (iii) regulatory and insurance environment that convey the correct
incentives for adaptation.

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 A growing menu of climate finance instruments

Adaptation Mitigation

Pilot Program Global

The Adaptation for ]limate Environmental ]arbon Funds
Fund Resilience Facility (GEF)

Global Facility for

Special ]limate Disaster Risk ]lean Technology ]arbon Partnership
]hange Fund Reduction & Fund Facility
Recovery

Least Developed Risk Forest Investment Forest ]arbon

]ountry Fund Instruments Program Partnership Facility

Global Scaling Up
Environmental Renewable Energy
Facility (GEF) for the Poor

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New Resources of ]limate Finance
World Bank
2 ]limate Investment Fund $ÿ.2 billion
u ]lean Technology Fund $4.8 billion
u Strategic ]limate Fund $1.4 billion
x Forest Investment Program $350 million
x Scaling up Renewable Energy $200 million
x Pilot Program for $ÿ00 million
]limate Resilience

UNF]]]
2 Strategic Priority for Adaptation $50 million
2 Least Developed ]ountry Fund $172 million
2 Special ]limate Fund $91 million
2 Adaptation Fund $300 to $ÿ00 million


  

]limate Finance is a ]atalyst


 

   












 üFacilitate enabling policies, regulatory
   frameworks, institutions and markets in
support of adaptation and mitigation

ü]atalyze transformational private and

public investments and development
programs
† low-carbon technologies (renewable
energies, energy efficiency in industry, water
use, transport, buildings...)
† terrestrial carbon (agriculture and
forestry)
† climate resilience (change practices and
factor-in climate vulnerability in
infrastructure planning, in agriculture...)

üSupport research, development and

deployment of new technologies
99
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]arbon markets † Multiple and confidential primary transactions
(avg. 200ÿ-08) ÿ.ÿ † Actual payment and investment flows unknown

Resources under
UNF]]] (avg.) 0.4
]limate-specific † ]onsistency and double-counting issues (multiple
concessional funds (avg.) ~4 contributors and channels)
† Additionality
ODA † ]o-benefits of development activities, notably for
(avg. 2005-07) 3.ÿ 105.0 adaptation
† MDBs do not report yet, in a consistent manner
Non-DA] donor † Non exhaustive coverage (both sources and
recipients)
support ? ~7 † Purposes unclear
(2007)

Philanthropia † Non exhaustive coverage (both sources and

(2007) ? ~ 49 recipients)
† Purposes unclear
Domestic resources † Very scarce information, not harmonized
(core budget, fiscal, and pricing ? ?
reforms)
Underlying finance (2007) † Non exhaustive coverage
GF]F
? 3,990 † Purposes unclear 11

FDI ? 522
  

2 Increasingly reliable, comprehensive and transparent

reporting is needed to demonstrate that new climate
finance instruments are not introduced at the expense
of those targeting other objectives
2 Exact and comparable figures on additional
contributions to fund incremental expenses probably
not possible (additionality)
2 Need to continue to develop and improve Rio Markers
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2 Two-track monitoring system: in addition to improving
tracking at source, strengthen developing countries·
capacity to monitor incoming flows and develop
international standards
2 Non-DA] donors to consider establishing recording and
reporting systems comparable to OE]D DA]
2 MDBs to improve monitoring and reporting on mitigation
and adaptation action by refining Rio Markers
2 Around 2013-14, more comprehensive system needs to
be adopted based on experience gained
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   3!"#$!

2 Dedicated non-ODA climate funds

2 Dedicated climate funds from ODA
2 Share of climate co-benefits in core
development assistance in ODA
2 Share of climate co-benefits in MDB
funds

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 #% &" % !

 


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1. Monitoring ]limate finance and ODA
2. Making the Most of Public finance for ]limate
Action
3. Beyond the Sum of Its Parts ² ]ombining
Financial Instruments for Impact and Efficiency
Six more planned until June 2011
www.worldbank.org/climatechange

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 World Bank Portfolio Tracking: Status
† Tracking with appropriate granularity the WBG investments with
adaptation and mitigation co-benefits across the entire portfolio and all
core funding sources
Ô part of broader work on a Results Framework for climate action

† (: Following the sector/theme code model, introduce 2 new SAP

fields linked to existing sector codes
Ô based on investment activity typologies (to be vetted by respective Sector Boards),
TTLs will allocate what percentage of a project·s individual sector allocations could
be attributed as adaptation and/or GHG co-benefits

Ô tracking for GHG co-benefits is an interim solution and will be superseded by

GHG analysis, if and when that is approved for the WB

† Y3: GHG analysis already introduced; manual tracking of adaptation

investments given small number of projects
1ÿ
Portfolio Tracking: Next steps

† Pilot ready by December 2010

† ]oordination with IDB
† Workshop with MDBs, UNF]]], UNDP,
OE]D, etc. in Jan.-Feb. 2011

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Fast Start Finance

2 Transparency and delivery essential

for success in ]ancun
2 Need baseline and tracking system
2 www.faststartfinance.org consortium
and support group

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 Facilitating access to climate finance: joint UNDP-
UNDP-
WBG knowledge platform

Developing one vehicle for UN agencies and MDBs to provide information and
experiences on climate finance and track financial flows
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