Adapting to Climate Change: Assessing the World Bank Group ...

CHAPTER 2ADAPTATION AT THE BANK GROUPoutcome) and on the ability of the borrower to service the debt (part of IFC’s investmentreturn). It does not consider impacts beyond this period, which is 10 years or less for 58percent of infrastructure projects, and 15 or less for 91 percent. 11 For instance, theappraisal of an investment in a large shipping canal, which uses prodigious quantitiesof freshwater to operate its locks, dismissed consideration of climate change impacts asbeing beyond the loan period. Similarly, IFC invested in two coastal resorts on lowlyingislands. In both cases, climate change risk was noted in the industry specialists’reports but was not considered in the final project design. (However, at least one of thehotels invested in desalination to avoid putting pressure on the island’s scarcefreshwater supply.) Of the 22 agribusiness investments made between FY05 and FY11,10 identified climate- or weather-related risks during appraisal either as a climate risk,agricultural risk, irrigation risk, or commodity price risk. Appraisal documents oftennote pre-existing mitigation against these risks, including geographic and productdiversification.2.23 In sum, climate risk identification at both IFC and the World Bank has been adhoc and almost entirely devoted to climate variability rather than climate change risks.IFC’s revised Performance Standard, however, takes a step forward by requiring riskassessment over the project’s entire life-cycle for projects in climate-sensitive areas. IFChas also formed a Climate Risk Working Group to address these issues.Country-Level Climate AdaptationCOUNTRY ASSISTANCE AND PARTNERSHIP STRATEGIES2.24 The SFDCC goal of supporting at least 10 country strategies has been exceeded.Of 56 CASs approved over FY09-11, 33 were identified by the Environment sector boardas explicitly supporting adaptation or increase climate resilience. IEG analysis of these33 CASs found that 21 demonstrated a significant focus on climate adaptation actions,while 12 demonstrated modest focus. 122.25 This represents an increase in attention to climate resilience. Of the 33 CASs thatcontained any reference to climate resilience, 24 demonstrated a significant change inBank policy relative to previous practice in that country. The remainder continuedearlier strategic attention to disaster risk management or adaptation.2.26 Most strategies promoted climate resilience through analytic work; informationproducts such as vulnerability assessment or identification of adaptation options,capacity building or support for adaptation, water, or disaster plans. Twenty-onestrategies supported implementation or execution of actions supporting climateresilience, and most of these were through disaster operations or mainstreaming20