The China-led Asian Infrastructure Investment Bank and other new multilaterals are becoming an important part of the development finance landscape. How they answer these five questions will have far-reaching implications.
multilateral development banks
Leaders at COP20 can explore a range of sources for financing low-carbon urban development including multilateral investment banks, private investors, and innovative initiatives like the Nationally Appropriate Mitigation Actions or climate-themed bonds.
Ownership and Accountability in Social and Environmental Safeguards
Global growth has not come without costs: Pollution, natural resource depletion, climate change, and the disruption of ecosystem services are now felt around the world.
This report aims at helping investors in developing countries develop effective social and environmental safeguard...
One of the biggest successes from 2009’s COP 15 conference was securing funding for climate change adaptation and mitigation in developing countries. Donor nations agreed to “provide new and additional resources […] approaching $30 billion for the period 2010–2012, with balanced allocation between adaptation and mitigation.” They also committed to mobilize $100 billion a year by 2020.
But the agreement left a key question unresolved: how should funding be “balanced” between adaptation and mitigation? Should the funding balance be 50/50 between adaptation and mitigation or should it based on each country’s needs? Should funding include both private and public sector investment? These are some of the questions that negotiators will need to address during COP 19 in Warsaw.
But whatever they decide as being a “balanced commitment,” one thing is clear: finance for adaptation needs to increase in the coming years.
U.S. public financing for overseas coal-fired power is likely coming to an end.
That’s the clear signal from the U.S. Department of Treasury’s announcement earlier this week. At institutions like the World Bank, where the United States is the largest shareholder, this decision holds real significance.
On July 16, 2013 the World Bank agreed to support universal access to reliable modern energy and limit the financing of coal-fired power plants to rare circumstances in an effort to address climate change concerns.
Few countries are unaffected by China’s overseas investments. The country’s outward foreign direct investments (OFDI) have grownfrom $29 billion in 2002 to more than $424 billion in 2011. While these investments can bring economic opportunities to recipient countries, they also have the potential to create negative economic, social, and environmental impacts and spur tension with local communities.
To address these risks, China’s Ministry of Commerce (MOFCOM) and Ministry of Environment (MEP)—with support from several think tanks—recently issued Guidelines on Environmental Protection and Cooperation. These Guidelines are the first-ever to establish criteria for Chinese companies’ behaviors when doing business overseas—including their environmental impact. But what exactly do the Guidelines cover, and how effective will they be? Here, we’ll answer these questions and more.
Developing countries, led by China and India, will build more urban areas between now and 2030 than humanity has throughout history. These 21st-century cities can drive social and environmental progress by embracing sustainable approaches to urban development, including transportation.
Recognizing this situation, the world’s biggest multilateral development banks (MDBs) pledged in June 2012 to provide $175 billion over 10 years to help fund sustainable transportation systems. EMBARQ played an important supporting role in the banks’ decision to invest this unprecedented sum into initiatives in emerging regions like Africa, Asia, Latin America, Eastern Europe, and the Middle East.
A Game Changer for Sustainable Transport
The banks’ announcement, made at the U.N. Sustainable Development Conference in Rio de Janeiro (Rio+20), will enable the scale-up of sustainable transport systems across the developing world. Equally important, it signals a critical shift in MDB investment policies, moving away from environmentally damaging transport infrastructure such as highways.
The financial institutions taking part are the African Development Bank, Asian Development Bank, CAF-Development Bank of Latin America, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, and the World Bank.
Over the next decade, their investments in initiatives such as improved mass transit systems and walking and cycling routes, should bring cleaner air, less congested roads, and safer transport to hundreds of millions of people. Other benefits will likely include improved mobility for the poor, safer roads, and reductions in transport-related climate impacts. Transport is responsible for about one-quarter of global carbon dioxide emissions.
The banks’ leadership is also likely to encourage national governments to adopt such transport projects, placing sustainability at the heart of urban development.
Making Change Happen: WRI’s Role
For four years, EMBARQ played a key public role in the discussions and preparatory processes that led to the banks’ joint declaration. For example, EMBARQ organized several Transforming Transportation conferences in partnership with the World Bank and Inter-American Development Bank, convening thought leaders to focus on MDB policy. EMBARQ helped found the Partnership on Sustainable Low Carbon Transport (SLoCaT), whose advocacy played a pivotal role in catalyzing the MDBs’ financial commitment. EMBARQ also advised and built close working relationships with influential decision-makers at the Asian Development Bank and Inter-American Development Bank, two institutions at the forefront of the shift in MDBs’ thinking. The attention paid to sustainable transport at Rio+20—not only by MDBs, but by governments, NGOs, and civil society—provides an unparalleled opportunity to scale up EMBARQ’s work at international, national, and local levels worldwide.
The High-Level Panel on the Post-2015 Development Agenda provided a welcome injection of energy and ambition into the future of development with its final report released last week. While the details will be parsed over the coming months, the report’s recommendations were at once bold and practical. The Panel sees that the promise of a world free of extreme poverty is within reach, and achieving this vision requires that sustainability and equity should be at the core of the global development agenda.
While there have been many such calls to move the world onto a more sustainable and equitable development path, if the Panel’s proposals are to be truly acted upon, the results would be transformational.
With that in mind, let’s look at how the report stacks up against the four “issues to watch” that we highlighted last week:
1) Will sustainability be on the margins or at the center of the post-2015 agenda?
This was a clear winner, as the Panel recognized that environmental sustainability and poverty eradication are inextricably linked. The report identified sustainable development as one of five essential “transformational shifts.” Unlike the Millennium Development Goals (MDGs), which relegated the environment to just one of eight goals, the panel offered four goals--on energy, water, food, and natural resources--that directly connect human well-being with care for the planet.