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Issue Brief January 9, 2024

Climate change prioritization in low-income and developing countries

By Amin Mohseni-Cheraghlou and Henry Evans

The World Bank’s 2023 document Evolving the World Bank Group’s Mission, Operations, and Resources: A Roadmap, otherwise known as the “evolution roadmap,” sets a laudable goal to shift more focus and action onto climate change in low-income and developing countries (LIDCs). The language used throughout the report clearly reflects the Bank’s shifting priorities. The word “climate” was mentioned forty times in the evolution roadmap document, “poverty” was mentioned forty-two times, and prosperity was mentioned only twenty-one times. This shows a clear paradigm shift that is expanding from the World Bank’s “Twin Goals” of ending extreme poverty and boosting shared prosperity to also include issues related to climate change and financing.

In the evolution roadmap report, the World Bank Group (WBG) rightly identifies that the world has not only stalled, but regressed in achieving the prosperity and development goals set for this decade. Further, the WBG identifies that LIDCs are not prepared to face the development challenges of the modern world. One of the key development issues the WBG identifies is climate change, which has an outsized impact on LIDCs. In this regard, the WBG has already created frameworks to engage climate issues in LIDCs. The WBG’s Country Climate and Development Reports (CCDR) offer a comprehensive resource to support development and climate objectives at the country level. These public reports empower governments, private sector investors, and citizens to prioritize resilience and adaptation and reduce emissions without compromising broader development objectives. These goals can be achieved, the WBG estimates, with an investment averaging 1.4 percent of a given country’s gross domestic product (GDP)— though in some low-income countries that number can be between 5 percent and 10 percent.

While the CCDR gives nations the tools to achieve climate objectives without significantly compromising development, it does not bridge the gap between the increasing focus of the WBG and the developed world on climate change and the real priorities of LIDCs.

People in LIDCs do not place climate change among their top development priorities, despite the outsized impact of climate change on LIDCs. This is not to say that LIDCs are not concerned about combatting climate change, or uninterested in adaptation strategies. Rather, citizens of LIDCs typically prioritize other development goals ahead of climate change— particularly when working with multilateral development institutions such as WBG. Across forty-three WBG client countries surveyed, climate emerged as a top development priority for less than 6 percent of the respondents on average. It only ranked among the top two development priorities in Vietnam. It only broke into the top three priorities for six countries, none of which are International Development Association (IDA) borrowers. Clearly climate change —particularly among the poorest countries— is not a pressing development priority.

LIDCs are instead more focused on securing funding for development projects with more immediate results. Overwhelmingly, education and health (human capital) are most widely identified as top development priorities. Other areas of focus identified in this survey include:

  • Economic growth, agricultural and rural development, job creation and employment, and poverty reduction, which can be broadly categorized as economic development.
  • Natural resources, infrastructure and transportation, and energy, which can be broadly categorized as natural and physical capital.
  • Security, stability, and governance reform, which can be broadly categorized as governance related issues.

These areas of focus are confirmed by other surveys, such as the 2021 “Listening to Leaders” survey published by Aid Data, where climate change landed in the bottom quartile of responses.

The lack of emphasis on climate change makes sense for LIDCs. Climate change mitigation is a global endeavor, and thus far the richest economies have done little to commit to it despite being the largest per capita contributors to climate change. Given the negligible per-capita contribution of LIDCs to climate change— and the fact that they will not be major contributors in the near future— it makes sense for LIDCs to direct attention elsewhere. Second, development and poverty reduction are excellent resilience strategies for LIDCs. Impoverished communities are much more vulnerable to climate change than richer communities. Under the assumption that climate change will continue regardless of LIDCs’ mitigation and adaptation efforts, due to their limited impact; it makes sense for these countries to focus on lifting their populations out of poverty and developing resilient infrastructure, governance, and economies instead of allocating their dwindling resources to fight climate change.

Because environmental concerns are not among the top three priorities for the majority of WBG’s clients in LIDCs, the WBG needs to demonstrate the immediate and long-term benefits of climate adaptation and mitigation for these economies. This is especially true if the WBG aims to convince LIDCs to allocate over 5 percent of their GDP toward addressing climate issues while they contribute the least to climate change. Additionally, the WBG must persuade major contributors to climate change to drastically decrease their emissions and assist LIDCs with their direly needed adaptation efforts. Otherwise, LIDCs will have little to no incentive to reduce their emissions, as they will perceive such measures as having a negligible impact on reversing global warming and climate change.

This policy brief examines the impact of climate change on other development priorities, specifically education and health, that are among the top two in the WBG’s 2020-2021 Country Opinion Survey. One or more of these priorities ranks higher than climate change for the governments, aid agencies, media, academics, private sector, and civil societies of the countries in the survey, yet both of these are intrinsically linked to climate change. The remainder of the report goes through each of these priorities outlined by LIDCs in the World Bank survey and highlights the impact of climate change on each one of them.

Amin Mohseni-Cheraghlou is the macroeconomist with the GeoEconomics Center and an assistant professor of Economics at the American University in Washington, DC. He leads GeoEconomics Center’s Bretton Woods 2.0 Project.

At the intersection of economics, finance, and foreign policy, the GeoEconomics Center is a translation hub with the goal of helping shape a better global economic future.

Related Experts: Amin Mohseni-Cheraghlou

Image: Teacher Arnoldo Medrano works in a classroom after the educational authorities brought forward the end of the school year for students due to high temperatures, in Ciudad Juarez, Mexico July 10, 2023. REUTERS/Jose Luis Gonzalez