Following disapproval from United States (bank’s largest shareholder), WB indicated to retire 45% climate co-benefits target and 35% target in the Climate Change Action Plan [CCAP].
- While agreeing to continue its CCAP plan, WB clarified its work on climate is and will remain firmly client driven.
About CCAP
- Genesis: Launched In 2016 after Paris Agreement as a five-year Climate Change Action Plan 2016–2020.
- Building on its achievements, the second CCAP covering 2021–2025 allocated 35% to climate finance.
- It was extended until June 30, 2026.
- Purpose: Increase financial and technical support to client countries and private sector clients for mitigation and adaptation.
Key Implications of WB Withdrawal
- Important Role of WB: In FY 2025, 48% of WB financing had climate co-climate benefits, with important projects in India targeting states like UP, Maharashtra, Kerala, etc.
- Climate Co-Benefits are financial resources which deliver positive benefits associated with climate change mitigation and adaptation.
- Difficulty Achieving Global Targets: New Collective Quantified Goal (NCQG) adopted at CoP29 of UNFCCC demands scaling up financing for developing countries to at least USD 1.3 trillion annually by 2035 from all sources.
- Existing Climate Finance Gaps: Adaptation financing needs in developing countries is 12-14 times as much as current flows (UNEP’s 2025 Adaptation Gap Report).
- India needs cumulative investment requirements of USD 22.7 trillion by 2070 (NITI Ayog).
- Energy Security as core driver of development: E.g., Iran war has cast doubt on viability of liquefied natural gas as ‘transition fuel’ demanding renewable alternatives.
