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The Paris Agreement sets out that tackling climate change is a common but differentiated challenge across signatory Parties and other actors. COP26 was the most recent focal point to monitor and commit to progress. Various leaders specifically called for carbon pricing to act as a barometer and price signal during COP26 to help shift the trillions in finance towards a lower carbon economy and to meet the Paris goals. Establishing and securing agreement on a global-level benchmark carbon price can be achieved by consolidating a range of carbon pricing initiatives (explicit, implicit and implied) into a single global platform that can be broken down into regions or sectors. This can then be compared against a target price corridor required to achieve the Paris Agreement goals. A benchmark serving these dual purposes can be embedded into financial markets via an investable or tradable price, which in turn can facilitate forward pricing capabilities. In addition, a user-defined data visualization framework can support a variety of stakeholder interests.

This report makes the case for a big investment push for EMDEs’ sustainable recovery and development, assesses the magnitude and composition of such investment, presents actions needed for an energy transition, looks at the role that innovations and state capacity can play in facilitating GRID, and proposes actions that governments, the private sector, MDBs, the IMF, and donors can undertake to mobilize financing at the large scale needed. The report summarizes the insights derived from the meetings of the High-Level Advisory Group (HLAG) on Sustainable and Inclusive Recovery and Growth, jointly led by Mari Pangestu, Ceyla Pazarbasioglu, and Nicholas Stern, and composed of experts from research institutions, the private sector, and governments, as well as senior World Bank Group and IMF staff members. The work of the HLAG, and thus this report, focuses on EMDEs and delves in greater depth into climate investment and financing, particularly for energy transition, as it is a less researched area. While doing so, it recognizes that policy and investment decisions in high-income countries, which accounted for only 16 percent of the global population in 2019 and yet for 32 percent of total greenhouse gas emissions (World Bank 2023a, 2023b), will be critical to whether the Paris Agreement goals can be reached. It also recognizes that these countries must play a key role in contributing financially to EMDEs’ transition to low-carbon economies.

Population growth and economic development, aggravated by climate change, will increase pressure on energy and water resources. Integrated planning can make the most of these two essential and scarce resources. Thirsty Energy, a World Bank initiative, helps countries address these issues and ensure sustainable development of both resources. This note focuses on the water needs of the power sector and particularly answers the following questions: Why is this issue important? Do power plants need all that much water? What about other types of plants? What are the challenges? and, What are our options?

South Africa has a comprehensive climate change response strategy to support the transition to a low carbon economy and a climate-resilient society. Improving the national Greenhouse Gas (GHG) inventory and implementing a carbon tax are but two elements that form part of this transition. Developing mandatory GHG reporting regulations will support not only the National GHG Inventory but also aid policy formulation, implementation, and legislation while allowing South Africa to meet its reporting obligations under the United Nations Framework Convention on Climate Change (UNFCCC).

Climate change presents risks and opportunities for the financial sector in both emerging and advanced economies. Financial institutions cannot afford to be outside of the transition path to low-carbon economies. Energy subsidies, emission standards, and carbon prices will all have a direct impact on the financial positions of these institutions’ clients, making climate risk an important element of any credit decision. Financial institutions will also need to understand the climate risks associated with their non-green assets and design measures to mitigate them. Yet there are also significant opportunities for financial institutions to provide innovative financing products for energy efficiency upgrades, renewable power generation, green buildings, green transport, and climate-smart agriculture and architecture. And there is a growing community of investors seeking new climate and environment friendly opportunities, which financial institutions can use to diversify their funding base and reduce their funding costs.

This policy brief presents the findings of a recent study focusing on two important aspects of forest ecosystems: how forest ecosystems help enhance people’s resilience to climate impacts, and how forest ecosystems support livelihood development for the poor.

Are you facing the challenge of installing solar at high altitudes with difficult terrain and climatic conditions? This Live Wire recommends practices for setting up solar installations in snowbound terrain, based on the Bank’s assessment of technical requirements for setting up a 1 GW solar power project in Spiti Valley, Himachal Pradesh. Possible technical solutions include bifacial modules and passivated emitter and rear cell technology, all with fixed mounting systems. With nuanced solutions, it is crucial to train staff and optimize equipment for site-specific risks like heavy snow loads. Both utility-scale projects for export, as well as small setups for supplying local communities, could potentially benefit from such solutions.

This Good Practice Handbook is designed to provide guidance to practitioners on taking rigorous and consistent approaches to assess hydropower project impacts on downstream river ecosystems and people, and determine their Environmental Flows (EFlows) commitments. The Handbook outlines a good practice approach for integrating EFlows into hydropower projects, emphasizing the selection of context-appropriate EFlows Assessment methods. Its structure follows the main steps of this approach: 1. Understand the context of river functioning and the provision of ecosystem values and services into which EFlows will be introduced (Section 2); 2. Understand the potential downstream impacts associated with hydropower development (Section 3) and how these can be mitigated (Section 4); 3. Align ESIA and EFlows Assessments and ensure data sharing and good communication between the assessment teams (see Section 5); 4. Apply a context-appropriate EFlows Assessment method (Section 6); 5. Conduct a comprehensive and appropriate stakeholder engagement program leading to a decision on EFlows and other mitigation measures based on the outcome of the assessment (Sections 7 and 8); and 6. Prepare an Environmental Flow Management Plan (EFMP2; Section 9). It also provides the following: A logframe for integrating EFlows into hydropower plants (Section 10); and Case studies to illustrate the main concepts addressed in the Handbook (Section 11).

This companion piece to the Fall 2022 ECA Economic Update provides an overview of the policy options available to countries to respond to the energy price shock and examines how this crisis could harness the clean energy transition to enhance collective energy security. The options to support energy markets, vulnerable households, and firms will vary, depending on specific country contexts, including exposure to gas and electricity supply risks and the fiscal space available to mitigate their impact. Well-coordinated and calibrated fiscal and monetary policies are needed to manage the impact of the price shock. Countries will also need to consider the implications of any policy choice on the transition to a greener economy and development trajectories. This note is organized as follows. Section 2 provides an overview of the broader economic impact of the energy price shock on economic growth, inflation, and public finances in the ECA region. Section 3 provides policy options to help countries adapt to the energy crisis related to managing both demand and supply. Section 4 presents a set of principles to guide the policy response for supporting vulnerable households. Section 5 presents a set of principles to guide the policy response for supporting firms. Section 6 concludes with a summary of recommendations for dealing with the crisis and transitioning to a greener economy.

Grid connectivity in rural Lao PDR yields widespread benefits: substantial improvements in household income, spending, ownership of durable assets, and children's education. Policymakers should consider extending grid-connectivity to households still off the grid. For connected households, reliability and quality of service should be improved. Grid power in Lao PDR is subject to seasonality due to its reliance on hydropower. Avoiding outages in the dry season can be temporarily solved by having households reduce their electricity consumption. A long-term solution will depend on increasing energy efficiency, adding generation capacity, and extending the grid.