The evidence is unequivocal: the climate is warming globally. As the Intergovernmental Panel on Climate Change (IPCC) made clear in its Fourth Assessment Report, the past century has seen widespread increases in air and sea temperatures and sea levels, along with shrinking sea ice, glaciers, and snow cover. At the same time, weather patterns have become more extreme, with more intense and longer droughts, more extreme precipitation events over many land areas, and more hot days and heat waves.
The risks include more frequent and dangerous floods and storms, greater stress on water supplies, a decline in agricultural productivity and food security, and a further spread of water-related diseases, particularly in tropical areas. These in turn could lead to population displacement, migration, and potential conflicts. An effective response to climate change must combine mitigation—to avoid the unmanageable—with adaptation, to manage the unavoidable.
Energy production and use are the biggest contributors to greenhouse gas emissions, and will remain so for years to come—with developed countries continuing to have higher energy use and emissions per capita. But the ground is shifting as poorer countries develop: non-OECD countries recently surpassed the OECD countries in absolute carbon emissions, reflecting their larger population and fast-growing role in the global economy. Bringing global emissions to the levels recommended by the IPCC will require significant reductions from developed countries and a slower rise in emissions from developing ones—as well as stabilization over the long term.
The World Bank helps clients mitigate climate change: our operations focus on energy, solid waste management, transport, and forestry. These efforts can also benefit from revenues through the carbon finance program or access to Global Environment Facility co-financing. Measures to improve energy efficiency can also benefit human health and livelihoods, especially for the poor, in addition to reducing emissions.
World Bank projects are helping developing countries move to low-carbon growth by encouraging cleaner sources of new energy. This effort includes policy reform, mainstream financing, and specialized financing through Carbon Funds and the Global Environment Facility.
Efficient transportation technologies are typically the lowest-cost means of reducing carbon emissions but are often not adopted. For supply companies and passengers, the reasons may include, price, speed, and reliability. Once these factors are identified and quantified, interventions can be designed to remove such barriers.
Land use changes in forestry and agriculture account for almost half of emissions in developing countries. Better forestry and agricultural techniques offer cost-effective mitigation with significant potential to improve livelihoods, reduce soil erosion, and protect biodiversity.
For the World Bank, climate change is a development and economic issue as well as an environmental issue. For example, carbon finance offers outstanding opportunities to address development and mitigation together, and we have taken a leadership role in the emerging carbon markets.
We are promoting the scaling up of mitigation efforts and sustainable development. Interventions can broadly be categorized:
- Adoption of compact fluorescent light bulbs, and work with energy agencies to support market transformation
- Setting of national geothermal development targets, with energy agencies
- Pollution reduction in air-conditioning and refrigeration sectors; collaborative efforts include the World Bank’s Montreal Protocol  operations team
- Deployment of household bio-digesters to capture methane emissions from animal waste, in partnerships with rural development agencies
- Reduction of gas flaring: public-private partnerships with the petroleum industry
- Technology upgrade and retooling of production facilities by bus manufacturers
- Coordinated city-wide GHG mitigation activities across waste, transport, and energy sectors, led by municipalities
- Promotion of efficiency of district heating systems led by energy suppliers and agencies.
- Accelerations of large-scale interventions, which experience shows succeed only if they simplify the application of methodologies, build our partners’ capacity, and enable participation of a broad range and large number of stakeholders. Examples:
Deforestation accounts for almost 20% of carbon emissions, and leaving forests standing is one of the most cost-effective ways to lower emissions. The World Bank is increasingly involved in sustainable forestry; our project portfolio increased from $149 million in fiscal 2001 to $540 million in fiscal 2007.
The BioCarbon Fund  is piloting innovative carbon payments; in Madagascar, a project is addressing deforestation by promoting sustainable livelihoods in a new protected area. The project is expected to avoid emissions of 8 million tons of carbon dioxide into the atmosphere.
Carbon Finance Assist (CF-Assist) is building capacity for carbon finance, helping ensure that developing countries and economies in transition are able to participate in the flexible mechanisms defined under the Kyoto Protocol. It has helped identify over 200 potential carbon mitigation projects in over 16 countries.
The Clean Technology Fund  is helping demonstrate how low-carbon technologies can contribute to sustainable development and achievement of the Millennium Development Goals. It includes programs in the energy and transport sectors, as well as energy efficiency in buildings, industry, and agriculture.