Are World Bank Group Projects Getting Cleaner, Greener, and More Resilient?
Highlights from the 2017 Results and Performance of the World Bank Group
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The World Bank Group has sought to mainstream environmental goals across its operations. Environmental sustainability has been a critical part of the World Bank Group’s high level corporate strategies. The Bank Group has committed to implementing its twin goals on poverty reduction and shared prosperity “in a sustainable manner”, including environmental sustainability. The Forward Look seeks to achieve these goals through inclusive and sustainable economic growth, and by fostering resilience to global shocks and threats. Climate Change is emphasized as a priority under the Climate Change Action Plan.
So, to what extent has the prioritization of environment in strategies led to changes in the composition and design of World Bank Group projects?
IEG answered this question and others in its recent report, the Results and Performance of the World Bank Group FY17, which had a special theme on environmental sustainability. By analyzing large samples of projects across all three institutions, and comparing newly approved projects in FY08-10 to those from FY15-17, we found that:
The World Bank Group’s environment strategy defines environmental sustainability in terms of Clean (climate change mitigation, pollution abatement), Green (natural resource management and biodiversity), and Resilient (climate change adaptation and climate disaster risk management.) We adopted this definition for our analysis, based on a detailed framework of potential environmental benefit types.
For the World Bank, there have been substantial increases in Resilient project components and a moderate increase in Clean project components, a trend driven largely by climate change mitigation. At the same time, support for Green project components has decreased, including in some traditional areas of environmental sustainability, particularly biodiversity conservation, water resource management, and irrigation efficiency improvements. These declines have been larger than increases in support for other Green activities such as forest and fisheries management. Energy efficiency support has also declined.
Share of World Bank project components with potential environmental benefits:
IFC investment project support for environmental sustainability has seen little change in composition over time, with support remaining focused on Clean activities and specific sectors. Key activities have been for climate change mitigation—largely renewable energy and energy efficiency—and water pollution abatement through wastewater treatment. IFC support for environmental sustainability has remained concentrated in the infrastructure sector and the manufacturing, agribusiness, and industry sectors.
Share of IFC investment projects with potential environmental benefits:
World Bank project support for environmental sustainability has been more common in higher-income countries, and this has widened further over time. The share of support for environmental sustainability is largest for upper-middle-income countries, followed by lower-middle-income countries, and finally low-income countries. Environmental activities in projects are concentrated in the 10 World Bank clients with the largest commitment volumes; collectively, projects in these countries include roughly one-third of all project components but comprise half of components with potential environmental benefits.
Share of World Bank project components with any potential environmental benefits,
by country income group:
Are these changes sufficient to deal with the worsening challenges posed by pollution, climate change, and environmental degradation? Are environmental benefits a priority for World Bank Group clients, amongst competing development challenges? Let us know what you think in comments.