Why Is the World Bank Spending $12 Billion to Chase Less Than 0.5 Percent of Global Emissions?

As world leaders gather at COP29 to chart a path forward on financing efforts to address the global climate crisis, one critical issue demands their attention: the chronic underfunding of climate adaptation in low-income, low-emission countries.

Low-income countries, which contribute less than 0.5 percent of global emissions, are among the most vulnerable to climate change impacts such as extreme weather, food insecurity, and economic disruption. Yet, the World Bank and other multilateral development banks (MDBs) are significantly underfunding climate adaptation in these countries relative to climate mitigation. Across all multilateral development banks, 37 percent of $60.9 billion spent on climate finance in low- and middle-income countries in 2022 went to adaptation, while 63 percent went to mitigation. Here’s why this needs to change:

First, financing climate adaptation is not just a matter of climate resilience; it is essential for broader development in low-income countries. These nations face complex and overlapping challenges, including fragile and inadequate infrastructure, economic instability, and growing populations vulnerable to climate shocks. Investing in adaptation projects—such as improved water management systems, climate-resilient infrastructure, and sustainable agriculture—would not only protect against the immediate impacts of climate change but also contribute to long-term development. By prioritizing adaptation, multilateral development banks can help these countries stabilize their economies, reduce poverty, and create jobs, all while building capacity for sustainable growth.

Second, low-income countries are already burdened by unsustainable levels of debt, and climate finance misallocation only exacerbates this problem. Many of these countries are taking on new loans for mitigation projects—such as renewable energy or emission reduction technologies—that, while important globally, are less relevant to their immediate needs. Mitigation spending on its own is not likely to deliver the infrastructure and social services necessary to meet urgent development goals and may also strain national budgets. In Africa alone, external debt stands at $1.15 trillion, with $163 billion in debt servicing expected in 2024. MDBs must stop pushing vulnerable nations into further debt for projects that do not address their immediate climate and development needs.

Third, focusing climate finance on mitigation overlooks the fact that poor countries are not major contributors to global emissions. Ending extreme poverty in these countries will have a negligible effect on emissions. Low-income countries—the very poorest nations—are home to 8 percent of the world population and responsible for less than 0.5 percent of global emissions. Assuming they grow by 5 percent per year and their emissions grow proportionately, in 2035 they would still be responsible for only 1 percent of global emissions. Yet, between 2000 and 2024, the World Bank spent $12 billion to mitigate carbon emissions in low-income countries.

Next week at COP29, world leaders will face difficult decisions on how to allocate limited resources to tackle the global climate crisis. Mitigation projects should be limited to those with significant adaptation co-benefits (for example, public transportation). Grants and low-interest loans should be directed toward building resilient infrastructure, scaling energy access, improving essential services that strengthen countries’ ability to withstand climate shocks, and reducing the risk of future humanitarian crises. This isn’t just about climate protection—it’s about ensuring that the countries most vulnerable to climate change and least responsible for causing it have a chance to thrive in a world where climate impacts are inevitable. The time to act is now.