Guest Article: Multilateral Development Banks and Climate Finance: More Words Than Action | SDG Knowledge Hub

By Dr. Ayse Kaya, Professor, Swarthmore College; Adjunct Professor, The Wharton School

Multilateral development banks (MDBs) dispense concessional and non-concessional funding for development to low- and middle-income countries. A growing obstacle in the way of development and poverty-reduction is climate change’s adverse impacts. In this context, the World Bank and its peer regional institutions, such as the Asian Development Bank (ADB) and the African Development Bank (AfDB), have an increasingly important role to play in channeling their financial resources for climate-related projects in member countries. Yet, they are lagging behind in the provision of multilateral climate finance and need to become more transparent and rigorous in their extant approaches.

Like other forms of climate finance, multilateral financial flows can help developing countries undertake low-carbon growth paths and reduce their emissions, while advancing their ability to resist the current impacts of climate change, namely facilitating adaptation and resilience. The World Bank, for instance, mentions the desire to deliver clean energy – where electricity is currently lagging – to facilitate green growth. Adaptation takes on different forms, but often requires expensive interventions, such as the building of new, more climate-resistant infrastructure. Thus, there is a great need for money, especially for the most vulnerable communities within the most impacted but poor pockets of…