Investments of 1.4% of GDP May Cut Emissions by 70% by 2050: World Bank Report

Cover Image Attribute: Image by Aline Dassel from Pixabay Countries Could Cut Emissions by 70% by 2050 and Boost Resilience with Annual Inve...

Cover Image Attribute: Image by Aline Dassel from Pixabay
Cover Image Attribute: Image by Aline Dassel from Pixabay

Countries Could Cut Emissions by 70% by 2050 and Boost Resilience with Annual Investments of 1.4% of GDP Low- and middle-income countries can transition to low-carbon, resilient growth pathways if critical conditions are met with international support.


An average of 1.4% of GDP invested annually could reduce emissions in developing countries by as much as 70% by 2050 and boost resilience, according to a new report from the World Bank Group. 

 

The analysis, Climate and Development: An Agenda for Action, compiles and harmonizes results from the Bank Group's Country Climate and Development Reports, covering over 20 countries that account for 34% of the world's greenhouse gas (GHG) emissions. It shows that investment needs are markedly higher in lower-income countries, which are more vulnerable to climate risk, often exceeding 5% of GDP. As a result, these countries will need increased concessional finance and grants to manage climate change impacts and develop along a low-carbon path.

 

The report draws from the richness of the individual country reports and highlights lessons for countries on integrating climate and development objectives. It finds that this approach to climate action can help them manage the negative impacts of climate change while generating positive effects on GDP and economic growth and delivering critical development outcomes such as reducing poverty. The essential 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 must increase their climate action, high-income countries with greater responsibility for emissions must lead the way with more profound and rapid decarbonization and increased financial support to lower-income countries. Major current and future emitters in the developing world also have a crucial 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.

 

Country Climate and Development Reports combine the best available data, models, and tools and aim to provide policymakers with immediate and actionable recommendations to guide climate and development decisions today. They are a core element of the World Bank Group's Climate Change Action Plan, which outlines how the WBG will support climate action in developing countries.

 

According to the report, countries must prioritize and sequence critical investments and policy reforms. 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 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, the Arab Republic of Egypt, Ghana, Iraq, Jordan, Kazakhstan, Malawi, Mali, Mauritania, Morocco, Nepal, Niger, Pakistan, Peru, Philippines, Rwanda, South Africa, Türkiye, and Vietnam. The findings from these analyses will inform Bank Group's 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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IndraStra Global: Investments of 1.4% of GDP May Cut Emissions by 70% by 2050: World Bank Report
Investments of 1.4% of GDP May Cut Emissions by 70% by 2050: World Bank Report
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