{"id":54457,"date":"2021-06-17T12:14:25","date_gmt":"2021-06-17T10:14:25","guid":{"rendered":"https:\/\/preprod.i4ce.org\/2021\/06\/17\/dici-la-cop26-les-banques-de-developpement-doivent-aller-au-dela-de-la-finance-climat-pour-saligner\/"},"modified":"2023-03-06T11:09:38","modified_gmt":"2023-03-06T10:09:38","slug":"by-cop26-development-banks-mut-go-beyond-climate-finance-to-align-with-paris","status":"publish","type":"post","link":"https:\/\/www.i4ce.org\/en\/by-cop26-development-banks-mut-go-beyond-climate-finance-to-align-with-paris\/","title":{"rendered":"By COP26 development banks must go beyond climate finance to align with Paris"},"content":{"rendered":"<p><strong>Today, all eyes are on the\u00a0forthcoming\u00a02021-2025 Climate Action Plan of the World Bank Group\u00a0as a proxy for\u00a0what the development finance community\u2019s\u00a0ambition for\u00a0COP26 in\u00a0Glasgow.The\u00a0Climate Action Plans of\u00a0Development Banks\u00a0up until 2020 have been structured around\u00a0climate finance commitments\u00a0focusing on increasing\u00a0their support for\u00a0climate-specific activities. However,\u00a0following up on\u00a0their commitments to \u201cAlign with the Paris Agreement\u201d,\u00a0these institutions\u00a0need to\u00a0develop\u00a0post 2020\u00a0strategies and actions plans,\u00a0which go a step\u00a0further\u00a0to meet the level of ambition of the Paris Agreement objectives.\u00a0The 2021-2025 Climate Action Plan of the World Bank is expected to set the tone for other\u00a0development banks\u2019\u00a0strategies and action plans currently being developed in the run up to COP26. Will it\u00a0build on and\u00a0go beyond\u00a0the traditional\u00a0climate finance\u00a0considerations?\u00a0<a href=\"https:\/\/www.i4ce.org\/team-details\/alice-pauthier-5\/\" target=\"_blank\" rel=\"noopener\">Alice Pauthier<\/a> from <strong>I<span style=\"color: #ff0000;\">4<\/span>CE<\/strong> comments on the\u00a0<a href=\"https:\/\/thedocs.worldbank.org\/en\/doc\/d06622e74a388000e2e440438d461b99-0020012021\/original\/CCAP-2021-25-Highlights.pdf?cid=ccg_tt_climatechange_en_ext\" target=\"_blank\" rel=\"noopener\">outline\u00a0of\u00a0the World Bank\u00a0upcoming\u00a0strategy<\/a>.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2 aria-level=\"2\"><span style=\"font-size: 24px;\"><b>Development Banks\u00a0can\u00a0build on their\u00a0existing efforts around\u00a0climate finance\u00a0to\u00a0rapidly\u00a0ensure\u00a0the consistency of all their activities\u00a0with the Paris\u00a0goals\u00a0<\/b><\/span><\/h2>\n<p><b><span data-contrast=\"auto\">The Group of Multilateral Development Banks (MDBs)\u00a0and\u00a0members\u00a0of the International Development Finance Club (IDFC)\u00a0\u2013 as well as\u00a0a number of\u00a0other public and private financial institutions\u00a0\u2013\u00a0\u00a0have\u00a0put\u00a0much\u00a0effort\u00a0into\u00a0\u201cclimate finance\u201d\u00a0\u2013 or\u00a0support for\u00a0transactions with direct\u00a0mitigation and adaptation\u00a0co-benefits.\u00a0<\/span><\/b><span data-contrast=\"auto\">Over the past year MDBs and\u00a0development banks\u00a0have announced\u00a0increased climate finance targets\u00a0post 2020 and the World Bank confirms this trend\u00a0in\u00a0its upcoming\u00a02021-2025\u00a0Climate\u00a0Action Plan, with a commitment to increase the percentage\u00a0of\u00a0the\u00a0Group financing\u00a0with\u00a0climate co-benefits\u00a0to\u00a035 percent.\u00a0Climate finance\u00a0represents\u00a0a major\u00a0contribution\u00a0in reaching the Paris goals\u00a0and should continue to be an investment priority\u00a0as part of Paris Alignment\u00a0approaches.\u00a0To support this,\u00a0IDFC and the\u00a0MDBs\u00a0can build on\u00a0their experience\u00a0in tracking and reporting\u00a0on their support for mitigation and adaptation\u00a0based on\u00a0the\u00a0<\/span><a href=\"https:\/\/www.mainstreamingclimate.org\/wp-content\/uploads\/2017\/10\/P4_MDBs.pdf\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">Common Principles for Climate Finance Tracking.<\/span><\/a><span data-contrast=\"auto\">\u00a0These efforts\u00a0provide a strong basis for\u00a0climate finance \u2013 and\u00a0the forthcoming update to the\u00a0Principles\u00a0is\u00a0hoped to provide\u00a0further guidance for\u00a0the internal alignment process.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b><span data-contrast=\"auto\">However,\u00a0when developing\u00a0Paris-aligned\u00a0strategies\u00a0development banks\u00a0must\u00a0look\u00a0beyond\u00a0the\u00a0\u201cclimate finance\u201d\u00a0in\u00a0their portfolios; they must\u00a0also\u00a0ensure that\u00a0all\u00a0activities\u00a0do\u00a0not\u00a0hinder the achievement of climate\u00a0objectives.\u00a0<\/span><\/b><span data-contrast=\"auto\">The first key\u00a0requirements for\u00a0Paris\u00a0alignment\u00a0is\u00a0that\u00a0all\u00a0new\u00a0projects,\u00a0clients\u00a0and counterparties\u00a0are\u00a0already or making credible efforts to be\u00a0consistent with\u00a0Paris-aligned national and international\u00a0socio-economic\u00a0pathways.\u00a0The World Bank\u00a0Action Plan\u00a0starts\u00a0to address\u00a0this aspect with the objective\u00a0to align all new operations by July\u202f1,\u00a02023\u00a0at the development bank level and\u00a0by July\u202f1,\u202f2025\u00a0at the group level.\u00a0This should be\u00a0a key priority as it is something new for internal teams and will\u00a0require\u00a0the use of\u00a0additional\u00a0alignment\u00a0assessments\u00a0at the project level\u00a0\u2013\u00a0as well as\u00a0at the counterparty,\u00a0country\u00a0and\u00a0sector\u00a0levels.\u00a0<\/span><a href=\"https:\/\/www.i4ce.org\/download\/operationalization-framework-on-aligning-with-the-paris-agreement\/\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">The Operationalization Framework on Aligning with the Paris Agreement<\/span><\/a><span data-contrast=\"auto\">\u00a0developed by\u00a0NewClimate\u00a0Institute and I4CE\u00a0for IDFC\u00a0provides an overview of the tools and approaches already available to\u00a0do it.\u00a0Further\u00a0work\u00a0is\u00a0however\u00a0needed to improve these methodologies and tools and mainstream their use in the financial institutions\u2019 community.\u00a0The development of\u00a0dedicated country climate and development diagnostic by the World Bank, as announced in the Action Plan\u00a0would represent a major step forward\u00a0for such assessments.\u00a0Moving forward,\u00a0actively\u00a0working whenever possible to support the alignment of\u00a0existing\u00a0assets within their portfolios and long-term counterparties should also be a priority.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2 aria-level=\"2\"><span style=\"font-size: 24px;\"><strong>To\u00a0maximize the contribution to climate goals by\u00a0public finance, development\u00a0banks\u00a0need to\u00a0focus on maximizing their\u00a0impact\u00a0\u00a0<\/strong><\/span><\/h2>\n<p><b><span data-contrast=\"auto\">As seen in <strong>I<span style=\"color: #ff0000;\">4<\/span>CE<\/strong>\u2019s Alignment Bulls Eye, aligned financial institutions should seek to as a minimum do no harm, and as much as possible support Paris consistent climate co-benefits and foster transformative outcomes.<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: center;\"><a href=\"https:\/\/www.i4ce.org\/wp-content\/uploads\/Figure-1.jpg\" class=\"laz_img\">Click on this button to see the image<\/a><\/p>\n<p>&nbsp;<\/p>\n<div class=\"vc_row wpb_row vc_row-fluid\">\n<div class=\"wpb_column vc_column_container vc_col-sm-12\">\n<div class=\"vc_column-inner\">\n<div class=\"wpb_wrapper\">\n<div class=\"wpb_single_image wpb_content_element vc_align_center\">\n<figure class=\"wpb_wrapper vc_figure\">\n<div class=\"vc_single_image-wrapper   vc_box_border_grey\">\u00a0<\/div>\n<\/figure>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"vc_row wpb_row vc_row-fluid\">\n<div class=\"wpb_column vc_column_container vc_col-sm-12\">\n<div class=\"vc_column-inner\">\n<div class=\"wpb_wrapper\">\n<div class=\"wpb_text_column wpb_content_element \">\n<div class=\"wpb_wrapper\">\n<p><b><span data-contrast=\"auto\">Given their limited resources, development banks should focus on\u00a0\u00a0the catalytic role they can play to achieve climate goals and aim to be \u201ctransformative\u201d\u00a0<\/span><\/b><b><span data-contrast=\"auto\">whenever possible (1).\u00a0<\/span><\/b><span data-contrast=\"auto\">A 2020\u00a0<\/span><a href=\"https:\/\/openknowledge.worldbank.org\/bitstream\/handle\/10986\/33917\/149752.pdf?sequence=2&amp;isAllowed=y\" target=\"_blank\" rel=\"noopener\"><span data-contrast=\"none\">World Bank report<\/span><\/a><span data-contrast=\"auto\">\u00a0noted that \u201ceven if all financing from the multilateral development banks (MDBs) was devoted to decarbonization and resilience, it would still meet less than\u00a0four\u00a0percent of finance needs for full climate transformation\u201d.\u00a0Public institutions\u00a0must therefore\u00a0prioritize activities with \u2018transformative outcomes\u2019 that reduce the barriers to and support the mobilization of public finance towards large-scale\u00a0and structural changes needed for the transition of economic, social and natural systems.\u00a0<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b><span data-contrast=\"auto\">In practice\u00a0this\u00a0will\u00a0require\u00a0as a first step that\u00a0institutions not only look at their inputs\u00a0and volume of funding allocated, but also at\u00a0the\u00a0impact\u00a0of finance.\u00a0<\/span><\/b><span data-contrast=\"auto\">MDBs and IDFC members\u00a0are working on the development of tools and methodologies to assess the\u00a0outcomes and\u00a0impact of their projects, especially\u00a0for\u00a0adaptation, which\u00a0is\u00a0more\u00a0context-specific\u00a0than mitigation\u00a0and requires\u00a0different assessment methodologies.\u00a0Moving forward\u00a0development banks\u00a0should\u00a0aim to\u00a0assess\u00a0and prioritize activities\u00a0\u2013 beyond project finance \u2013\u00a0based on the\u00a0additional\u00a0impact\u00a0they can have\u00a0as a public institution\u00a0to foster transformative outcomes and impact.\u00a0In this regard, the second priority of the World Bank Climate Action Plan to prioritize resources for impact is a major signal sent to the\u00a0development finance\u00a0community.\u00a0However\u00a0this is only a start;\u00a0while\u00a0the tools and actions in the\u00a0draft outline of\u00a0the\u00a0WBG\u00a0Action Plan\u00a0place the emphasis on impact over volume,\u00a0further\u00a0significant changes\u00a0in line with the World Bank\u2019s own 2020 report\u00a0will\u00a0be needed to be\u00a0truly\u00a0transformative.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span class=\"TextRun BlobObject DragDrop SCXW138933350 BCX0\" lang=\"FR-FR\" xml:lang=\"FR-FR\" data-contrast=\"auto\"><span class=\"Superscript SCXW138933350 BCX0\" data-fontsize=\"12\">(1)<\/span><\/span><span class=\"TextRun SCXW138933350 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW138933350 BCX0\" data-ccp-parastyle=\"Normal (Web)\">\u00a0<\/span><\/span><span class=\"TextRun SCXW138933350 BCX0\" lang=\"EN-US\" xml:lang=\"EN-US\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW138933350 BCX0\" data-ccp-charstyle=\"cf01\" data-ccp-charstyle-defn=\"{&quot;ObjectId&quot;:&quot;dd741bfb-66cf-4aa3-b06f-203f5bedc0a7|62&quot;,&quot;ClassId&quot;:1073872969,&quot;Properties&quot;:}\">Transformative climate finance is defined by the World Bank as climate finance with \u00ab\u202fpositive spillover effects beyond project boundaries to address systemic barriers to green development and induce additional financial flows even after public finance is exhausted.\u202f\u00bb\u00a0<\/span><\/span><a href=\"https:\/\/openknowledge.worldbank.org\/bitstream\/handle\/10986\/33917\/149752.pdf?sequence=2&amp;isAllowed=y\" target=\"_blank\" rel=\"noopener\"><span class=\"TextRun SCXW138933350 BCX0\" lang=\"FR-FR\" xml:lang=\"FR-FR\" data-contrast=\"auto\"><span class=\"NormalTextRun SCXW138933350 BCX0\" data-ccp-charstyle=\"cf01\">Source<\/span><\/span><\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Today, all eyes are on the\u00a0forthcoming\u00a02021-2025 Climate Action Plan of the World Bank Group\u00a0as a proxy for\u00a0what the development finance community\u2019s\u00a0ambition for\u00a0COP26 in\u00a0Glasgow.The\u00a0Climate Action Plans of\u00a0Development Banks\u00a0up until 2020 have been structured around\u00a0climate finance commitments\u00a0focusing on increasing\u00a0their support for\u00a0climate-specific activities. However,\u00a0following up on\u00a0their commitments to \u201cAlign with the Paris Agreement\u201d,\u00a0these institutions\u00a0need to\u00a0develop\u00a0post 2020\u00a0strategies and actions plans,\u00a0which go a step\u00a0further\u00a0to meet the level of ambition of the Paris Agreement objectives.<\/p>\n","protected":false},"author":1,"featured_media":51373,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[79],"tags":[],"class_list":["post-54457","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-post"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>By COP26 development banks must go beyond climate finance to align with Paris - I4CE<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.i4ce.org\/en\/by-cop26-development-banks-mut-go-beyond-climate-finance-to-align-with-paris\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"By COP26 development banks must go beyond climate finance to align with Paris - I4CE\" \/>\n<meta property=\"og:description\" content=\"Today, all eyes are on the\u00a0forthcoming\u00a02021-2025 Climate Action Plan of the World Bank Group\u00a0as a proxy for\u00a0what the development finance community\u2019s\u00a0ambition for\u00a0COP26 in\u00a0Glasgow.The\u00a0Climate Action Plans of\u00a0Development Banks\u00a0up until 2020 have been structured around\u00a0climate finance commitments\u00a0focusing on increasing\u00a0their support for\u00a0climate-specific activities. 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