In October, members of the International Development Association (IDA), the World Bank’s lending arm for the poorest countries, met in Washington, D.C. after Annual Meetings to continue discussing the vision for the 19th replenishment of IDA, aka IDA19. Their draft Deputies’ Report refines the plans that management proposed ahead of last June’s Addis Ababa meetings, including specific objectives that IDA should meet during the next three years. The IDA deputies will meet in Stockholm in December to finalize the Results Measurement System, policy commitments, and financing scenario whereby donors make their pledges.
Because IDA provides grants and concessional loans, its funds must be replenished by donor governments every three years. The replenishment process consists of a series of negotiations among the Bank, donor governments and borrower country representatives, which culminate in a lengthy agreement that includes dozens of policy commitments and indicators that IDA will use to measure its progress over the next three years.
Although climate change has been designated as a “special theme” for IDA for the last three replenishments, the commitments proposed for addressing climate-related concerns in IDA countries still do not meet the level of ambition needed from the world’s preeminent development finance institution. Given the urgency of the climate crisis, it is critically important that IDA19 policy commitments set much more ambitious goals for the World Bank’s operations in the 77 IDA countries. We hope to see these reflected in the final agreement for IDA19 — which will provide funding to countries that stand to suffer most from the effects of a changing climate.
IDA19’s Draft Climate Change Commitments
The policy proposals presented under the climate change white paper indicate that IDA’s guiding principles, revised for IDA19, include a welcome shift “from input-based to outcome-oriented commitments,” with those commitments to be “measurable and actionable.” IDA’s climate change agenda is also meant to focus on “long-term systemic impacts.”
Included in the IDA19 proposal for Addis (para. 68) (but not in the draft deputies’ report) is a remarkable acknowledgment and prediction.
“The 2018 New Climate Economy Report highlights that the decisions we take over the next two to three years are crucial because of the urgency of a changing climate and the unique window of unprecedented structural changes already underway.”
“IDA19 will support countries to enter a new era of economic growth that will deliver higher productivity, more resilient economies and greater social inclusion.”
Indeed, the next two to three years are crucial for climate change. Historically, the World Bank has been a leader among Multilateral Development Banks in paving the way for ambitious development goals. Given the level of influence that the World Bank has had in international and state economic policy reform around the world, IDA needs to be more ambitious in facilitating structural transformation — not just one project at a time, but through large-scale systemic policy reform.
However, the policy commitments outlined in Addis, and since revised, do not actually reflect these principles and instead fall short in the following ways:
- The commitment to increase IDA’s climate co-benefits has a proposed goal of 30% for FY21-23 (average). We are glad to see this bar raised since June, when management proposed the “goal” of 28%, which was already achieved in FY18. Still, IDA clearly can be more ambitious, and needs to be, in order to align its work with countries’ nationally determined contributions (NDCs) and Paris Accord goals overall.
- There is also a commitment to develop and pilot new resilience metrics and incentives for more effective climate adaptation in 20 IDA operations over three years. As the Board typically approves over 200 IDA projects per year, this commitment only applies to 3.3% of operations. Moreover, there is no indication of what these new incentives or metrics would look like. How will they be measured over time, how will they choose which projects, how can we follow up, and what is the timeline for rolling them out more broadly?
- Another commitment, to support 15 countries in updating their national action plans (CPFs and NDCs) with “climate-related objectives or results indicators,” fails to mention how this will be done — will the Bank draw from its own forest and climate-smart research and recommendations to do this? Will this be negotiated through country partnership frameworks with borrowers, where the Bank maps out a strategy for supporting each country’s own development vision and goals? Putting well-researched policy and investment plans into action could greatly increase the effectiveness and impact of the Bank’s efforts to integrate sustainable land management into these countries’ development.
Scratching the surface…
Alongside the policy commitments, a number of ambitions are expressed under each of the four “objectives” with positive intentions, but these miss an opportunity in their ambiguity. These would be more meaningful if they were time-bound (i.e. during IDA19 or before the end of FY23), quantitative commitments throughout, as implied by the statement that they are supposed to be measurable and actionable. A few examples of specific thematic areas that need more attention in IDA’s portfolio:
More Climate Finance. The goal to drive up climate financing totals (in addition to co-benefits within projects) and green bond markets fails to offer a target percentage increase in financing, which is needed for this to be meaningful.
Avoid Deforestation. The Bank should adopt a time-bound goal to end deforestation from all its projects, at least in old-growth and protected forests, and a policy mandating zero net deforestation as the default, rather than the vaguer term “avoid.”
Strengthening Coastal Resources and Adaptation. The importance of water management, combating marine plastics, and ecosystem-based adaptation has been noted in the plan, but without specific goals. The IDA19 objective of strengthening coastal resource-based livelihoods “such as tourism, aquaculture, and fishing” doesn't seem to be preceded by spatial planning and/or zoning in order to protect against cross-purposes. Tourism infrastructure, in particular, can displace people both physically and economically by making those other occupations impossible.
More Climate-Smart Agriculture. The white paper discusses the aim to increase the share of “climate-smart” projects in IDA’s agriculture portfolio. For this to be meaningful requires more specific commitments with the goal that in IDA19 all new agriculture investments are climate-smart, Especially with the release of the IPCC’s report on climate change and land use, it is clear that agriculture is fundamental in hitting global climate change goals… or not. By now, we know enough about what climate-smart agriculture is, that any new agriculture projects that are not fully climate-smart and sustainable are in fact doing harm.
Indigenous Peoples. The IPCC’s land-use report and the World Bank’s own research has recognized the value of indigenous land stewardship in environmental management and climate mitigation. The only mention of indigenous peoples in the climate change proposal is about how they are at risk or vulnerable. As a matter both of appropriate stakeholder engagement and natural resource management, the Bank should have indigenous peoples (where present) actively involved in the revision of the CPF in creating a plan for sustainable environmental management. This is in line both with ESS7 & 10.
Biodiversity. The Draft IDA Deputies’ Report proposes to “Support at least 15 IDA countries to implement and/or update their National Biodiversity Strategies and Action Plans (NBSAPs) covering terrestrial and marine biodiversity or similar national action plans through new IDA-supported activities during IDA19.“ This is welcome, but needs to be expanded to cover more countries. If this figure is pursued in every IDA, it would take 5 IDA cycles —15 years — to cover essentially all countries. A target of 25 would deliver IDA support to the full set of IDA countries in 9 years, appropriate for plans that should be updated at least every 10 years.
Further, the Tier 1 indicator, "Marine protected areas (% of protected areas)" is too vague, and possibly counterproductive, since the percentage of marine protected areas could be increased by decreasing the number of terrestrial protected areas. To make this more specific, one of the following additions (in bold) should be made:
- Marine protected or Marine managed areas (% of exclusive economic zone with sustainable management). This would ensure MPAs/MMAs are related to the marine area the nation controls. Or
- Marine and terrestrial protected areas (% of terrestrial and marine territory under effective protection). This would track the increase in overall area effectively protected.
The World Bank plays an important role in setting the standard for development, both serving as a knowledge hub of experts and by granting a stamp of approval to government project operations. We know that the poorest populations of the world are going to be the ones most harmed by the consequences of climate change. Two-thirds of the world’s extreme poor (500 million people) live in the 77 countries where IDA works; climate impacts could push an additional 100 million into poverty by 2030 (IDA19 Brochure). Most of IDA’s activity takes place in the tropics, where much of the world’s biodiversity lies as well. With a portfolio of large projects like agriculture, mining, or energy infrastructure in countries choosing their development pathways, it is important that the Bank begins to apply all IDA resources in a forest-smart, climate-smart way.