CLIMATE FINANCE
Interview with Sanjay Srivastava , World Bank
is felt much more severely in the developing world and particularly in Africa. There are more floods, droughts and coastal erosion. Climate-induced disasters are more frequent in the developing world, so many of our developing country clients are saying that our lending should focus more on enhancing their resilience to these climate-induced disasters. So, yes, it’s an evolving trend that more and more lending is focused on adaptation, while in parallel we work to reduce emissions on the mitigation side. I think the future of adaptation is going to be quite progressive in the developing world. There’s going to be more investment in climate-smart agriculture and in (re)building cities that can better handle flooding. There’s going to be better water resources management, so that agriculture can be sustained in drought-prone areas. Meanwhile we need to face the fact, however, that investments in switching from coal to renewable energy will be a slow process in the developing world. OFQ : How can we get more clarity on the development effectiveness and climate effectiveness of our operations? How can we get better data? SS: I think a lot of data, in terms of outcomes and results on the ground, still needs to be enhanced. It can be very anecdotal. It’s also clear, though, that the relevant institutions are working hard and investing time to create databases and a wider system that will be able to properly measure the climate impacts of our investments. The World Bank, for example, produces a lot of baseline data. That’s an essential part of project design in terms of clarifying how much GHG emissions are coming from our investments and then post-implementation how much GHG emissions have been reduced. Many countries are doing this already as part of their Nationally Determined Contribution (NDC) commitments under the Paris Agreement. That means in practice that many countries are setting those baselines and setting up data collection systems, so we’re starting to see better data availability, which will allow us to better inform development and future investments.
Practice Manager for Environment, Natural Resources and Blue Economy
Sanjay Srivastava
OFQ : What challenges and solutions did you discuss during the workshop in terms of aligning for the Paris Agreement? SS: Paris alignment revolves around two things over the short term and medium term: By how much will your investment cut back emissions and by how much will it add to emissions? At the World Bank we’re now required to inform our board about everything we do in terms of Paris alignment. Since July 2023 whatever we do has to be at least 85 percent Paris-aligned. Then from 2025 anything that’s not Paris-aligned will not go to our board. So we are very, very strict about it. We recognize that those requirements have not been agreed or endorsed by many other developmental partners. But we’re all heading in a similar direction, including the OPEC Fund. So that’s why we’re training people to take the same approach in their investments and working with clients. OFQ : In terms of climate financing, the development community is moving beyond mitigation measures and more into adaptation. How is that evolving? SS: Much of the developing world – the whole of Africa, a large part of South Asia and East Asia – contribute very little to global greenhouse gas (GHG) emissions. Barely 2-3 percent. The impact of increasing GHG, however, Leads the World Bank’s engagement in lending and advisory support to promote green growth, addressing air, water and land pollution; strategy to promote biodiversity and forest conservation, growing blue economy, and managing environmental risks. He is an environmental engineer and a global leader in sustainable development with more than 30 years of international experience.
OPEC Fund Quarterly : Our joint workshop on climate finance looked at various ways to agree a common methodology. Why is that important? Sanjay Srivastava: Different donor institutions do similar things. We’re investing in renewable energy, transmission systems, transport, water, agriculture and so on. But we often have different ways of calculating how much counts as climate-informed investment. Sometimes our calculations don’t cover everything we do; other times they’re overly complex. So to ensure consistency of measurement, we’ve agreed to converge and use the same methodology, which has now been adopted by all development institutions including the World Bank. The next task is to co- design our development interventions in such a way as to maximize their climate competitiveness.
“We’re starting to see better data availability, which
will allow us to better inform development and future investments.” Sanjay Srivastava, World Bank Practice Manager for Environment, Natural Resources and Blue Economy
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