Developing Countries Need Key Investments, Policy Reforms for Emission Reduction

CO2 emission rose in 2022

Investment to the tune of 1.4% of GDP annually could reduce emissions in developing countries by as much as 70 per cent by 2050 and boost resilience, said a new report from the World Bank.

The analysis, Climate and Development: An Agenda for Action, compiles and harmonizes results from the Bank Group’s Country Climate and Development Reports. It covered over 20 countries that account for 34 per cent of the world’s greenhouse gas (GHG) emissions.


In the report, the World Bank said investment needs are markedly higher in lower-income countries which are more vulnerable to climate risk, often exceeding 5% of GDP. It said that these countries need increased amounts of concessional finance and grants to manage climate change impacts and develop along a low-carbon path.

The report finds that this approach to climate action can help them manage the negative impacts of climate change, while generating positive impacts on GDP and economic growth, and delivering critical development outcomes such as reducing poverty. The key conditions for success include impactful reforms, improved allocation of public resources, higher mobilization of private capital, and significant financial support from the international community.

Achieving climate and development objectives must go hand in hand. Climate action is a key global public good, requiring significant new financing from the global community and mechanisms for inflows,” said World Bank Group President David Malpass, “Well prioritized and sequenced climate actions, strong participation of the private sector, substantial international support and a just transition are critical components for impact.”

The report also notes that while all countries have to increase their climate action, high income countries with their greater responsibility for emissions need to lead the way with deeper and more rapid decarbonization, as well as increased financial support to lower income countries. Major current and future emitters in the developing world also have a key role to play for the world to achieve the goals of the Paris Agreement. The report also examines the technologies and innovations needed for lower carbon intensity production of electricity, steel, cement, and manufacturing, and how the world will build green and efficient supply chains for a sustainable future.

Countries need to prioritize and sequence key investments and policy reforms, according to the report. These will deliver multiple benefits. And emission reductions can deliver immediate development outcomes such as reduced vulnerability to fossil fuel price volatility, improved trade balances and enhanced energy security, and better air quality and related positive health impacts. Early action can also avoid locking countries into high emitting infrastructure and systems, which will be costly or even impossible to transform in the future.

This analysis covers over 20 countries including: Argentina, Bangladesh, Burkina Faso, Cameroon, Chad, China, Arab Republic of Egypt, Ghana, Iraq, Jordan, Kazakhstan, Malawi, Mali, Mauritania, Morocco, Nepal, Niger, Pakistan, Peru, Philippines, Rwanda, South Africa, Turkey, and Vietnam. The findings from these analyses will inform Bank Group engagements with public and private sector clients and will feed into the Bank Group’s own country engagement frameworks and operational portfolio.


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