Thank you, Prime Minister Madbouly, Dr. Shoukry for hosting this event on climate finance.
Developing countries are facing an economic crisis, heavy debt burdens, high inflation, and climate change. It is a crisis facing development itself.
The reversals in development are staggering. They extend to shrinking economies, extreme poverty, losses in education, stunting, limited access to electricity and clean water, high youth unemployment, and lack of infrastructure. The World Bank is deeply engaged in financing recoveries in all of these, and each reversal is made worse by climate change.
We have dramatically grown our financing to address climate disasters such as the flooding in Pakistan. And we have dramatically grown our climate finance. Including on major commitments to adaptation, we reached $32 billion in climate finance this past year, a record that was above our Glasgow target. I welcome and solicit your input on ways to increase our resources and commitment capacity.
We are approaching the climate crisis with action and impact. I was in South Africa over the weekend. I visited the Komati coal power plant that is being decommissioned and repurposed for renewable energy, with substantial attention on the social transition. The financing comes from multiple sources, including loans from IBRD and Canada and a grant from our ESMAP trust fund. Developing complex projects like this takes a long time as will implementation. That helps explain the key role played by the World Bank Group working with Eskom, the South African federal and local governments, and the JET-P partners as part of the country platform. With most parts of the world increasing their GHG emissions, the Komati repurposing is a hopeful sign, and the World Bank is proud to lead this successful approach to reducing GHG emissions.
We published the South Africa Country Climate and Development Report, or CCDR, last week, which shows how the pathway chosen for Komati makes sense for both the people and the planet. We have now published CCDRs for more than 20 countries, showing pathways to integrate climate and development. This was a major deliverable of Glasgow, and they show clear pathways to climate action and impact. The Prime Minister was kind enough to help launch the Egypt CCDR with me last night.
Climate action such as the Komati project provides a key global public good and demonstrates that it can be done. We want to dramatically increase the number and size of projects that reduce greenhouse gas emissions.
Yesterday I presented our new fund, called SCALE, which stands for Scaling Climate Action by Lowering Emissions. SCALE is a key non-fragmented avenue for the global community to take action on climate change and provide actual funding for GHG emissions reduction. It is a direct, transparent approach that avoids greenwashing.
SCALE will pool funding from the global community and provide grant payments on a results basis to client countries for lowering greenhouse gas emissions. The fund will also help countries build a track record of projects that unlock private sector funding through international carbon markets. We invite all partners here at COP27 to consider this approach to direct financing of climate action. It has to be a global effort, with common but differentiated responsibilities.
High-income countries will need to lead the way in the low-carbon transition. They can reduce their own emissions, reduce exports of high-carbon-intensity fuels, and increase their funding for climate action globally. Given the current inflation problem, they should adopt policies to increase production in sustainable ways to respond to the current shortage of food, energy and fertilizer.
Major current and future emitters in the developing world also have a key responsibility in reducing GHG emissions. They need to find low-carbon growth paths to provide reliable and affordable electricity to their people. And they should choose pathways that provide a just transition for society to lower GHG emissions.
As part of this, we also need to find better financing pathways for adaptation, including contributions from donors, foundations and the private sector.
At COP27, there have been recommendations for Multilateral Development Banks to significantly increase our climate finance. At our recent Annual Meetings, there was a broad recognition on the need to increase financing for global public goods, especially climate action. I warmly welcome these calls. Successful climate action to reduce greenhouse gas emissions will take a concerted global push, and we are committed to this effort.
Climate is a defining challenge facing development. It signals another important evolution for International Finance Institutions and the World Bank Group. I discussed this challenge with our governors at the Annual Meetings and with our Board of Directors at the end of October. Our management team has started preparing a Roadmap paper that will outline concrete actions for our shareholders.
The financing of global public goods is made more difficult by the depth of the other crises facing development. I’ll conclude with the assurance that the World Bank Group is committed to responding to all these challenges with action and impact. Thank you.