The World Bank has provided developing countries with $83 billion in climate financing over the past five years and it intends to increase this amount over the next five years with an additional $50 billion to accelerate climate action for the sake of reaching zero carbon emissions by 2050, according to the President of the World Bank David Malpass.
Malpass made his comments during the Innovate 4 Climate (I4C) conference that kicked off on Tuesday and concludes on Thursday.
I4C, hosted by the World Bank Group, is an annual global conference on climate finance, climate investment and climate markets, attracting leaders focused on transformative and innovative action on climate change.
Launched in 2017, I4C is designed to bring together thought leaders interested in linking climate innovation with investment opportunities, transforming dialogue into action.
Malpass noted that the World Bank is the largest developer of climate action financing, particularly those headed to the developing countries, adding that the bank provides $100 billion annually for sustainable development.
He also said that World Bank dedicates 45 percent of its finances for adaptation to climate change.
Addressing the climate change issue, developing countries need to adopt carbon pricing mechanism that allows the governments to impose taxes and fees on projects that are not yet decarbonising, according to Malpass.
He explained that such an instrument is a win-win process for the governments that encourages businesspersons to reduce the use of carbon-based fuels, while benefiting the states’ budgets by increasing revenues.
Meanwhile, the CEO of USA-based BlackRock – a multinational investment management corporation– Larry Fink said that the goal of reaching carbon-neutral climate by 2050 will be impossible unless the whole globe and international financial institutions establish a unified action plan.
He added that public sector cannot carry out the climate action efforts alone, asserting the need to partner with the private sector to provide investment.
He also urged policy makers to adopt smart climate solutions to accelerate climate action.
In the same vein, the director general of the World Trade Organisation (WTO) Ngozi Okonjo-Iweala stressed that reaching an agreement on carbon pricing mechanisms will make the action easier, especially for the developing countries and low-income economies.
She noted the WTO is consulting with its members about the instruments and tools that could be used to further adoption of carbon pricing mechanisms.
On his side, the International Monetary Fund’s (IMF) Deputy Managing Director Tao Zhang said that adopting carbon pricing must be complemented by increasing green investments to avoid any kind of disruptions.
Meanwhile, the Director General of the International Labour Organization (ILO) Guy Ryder said that climate action is expected to create about 24 million new jobs, while causing other jobs to vanish.
In this respect, Ryder urged the governments, especially in the developing countries and low-income economies, to set up public programmes while implementing the transition towards a green economy.
The conference was punctuated with the launch of the World Bank’s annual report, State and Trends of Carbon Pricing, which showed that there are 64 carbon pricing instruments in operation globally with an increase of six instruments compared to 2020, which had 58 carbon taxes and emission trading systems (ETSs) in operation.
It also said that 21.4 percent of global greenhouse gas emissions are covered by carbon pricing instruments in operation, representing a significant increase to 2020, when only 15.1 percent were covered.
In 2020, carbon pricing instruments generated $53 billion in revenue, which is an increase of around $8 billion compared to 2019, largely due to the increase in the EU allowance price, according to the report.