Developing nations could cut emissions by 70% by 2050, says World Bank

Annual investment of 1.4% of GDP could reduce emissions in countries

A climate change activist in Washington.  AFP
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Investing an average of 1.4 per cent of gross domestic product annually could reduce emissions in developing countries by as much as 70 per cent by 2050 and boost their resilience, according to the World Bank.

Investment needs are higher in lower-income countries which are more vulnerable to climate risk, often exceeding 5 per cent of GDP, a report by the multilateral lender on Thursday showed.

These countries will need increased amounts of concessional finance and grants to manage climate change impacts and develop along a low-carbon path, it said.

The analysis, “Climate and development: an agenda for action”, compiles the results from the country climate and development reports that cover more than 20 countries accounting for nearly 34 per cent of the world’s greenhouse gas emissions.

“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,” World Bank President David Malpass said.

“Well prioritised and sequenced climate actions, strong participation of the private sector, substantial international support and a just transition are critical components for impact,” Mr Malpass said.

Clean energy investment in developing and emerging economies needs to increase by more than seven times — from less than $150 billion in 2020 to more than $1 trillion by 2030 — to put the world on track to reach net-zero emissions by 2050, according to a joint report by the International Energy Agency, the World Bank and the World Economic Forum.

The new report by the World Bank said the integration of climate and development objectives can help economies manage the negative impacts of climate change.

It will help to generate positive impacts on GDP and economic growth and deliver critical development outcomes such as reducing poverty, it said.

The conditions for success include “impactful reforms, improved allocation of public resources, higher mobilisation of private capital and significant financial support from the international community.”

The report found that while all countries must increase their climate action initiatives, high-income countries with their greater responsibility for emissions need to lead the way.

High-income economies have to accelerate their decarbonisation efforts and offer increased financial support to lower income countries.

Major current and future emitters in the developing world also have a key role to play to achieve the goals of the Paris Agreement, the World Bank said.

Countries need to prioritise and sequence key investments and policy reforms, the report said, adding that these will deliver “multiple benefits”.

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”, the report said.

Updated: November 03, 2022, 5:51 PM