With the Paris Agreement, country governments have agreed to hold the increase in the global aver¬age temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C. Multilateral Development Banks (MDBs) have a critical role to play in helping countries meet the objectives of the Paris Agreement: MDBs are major finance providers to developing countries, including for infrastructure, much of which will be around for decades and therefore have a long-term effect on countries’ development trajectories, resilience, and future carbon emissions. The banks also directly or indirectly mobilize additional finance by acting as lead investors and attracting others to invest alongside them.
The project “Alignment of Development Finance with the Paris Agreement” funded by BMZ and implemented by Germanwatch, NewClimate Institute, and the World Resources Institute aims to support MDBs and other development finance providers in translating the Paris Agreement to their operations.
The MDBs have jointly committed to support the Agreement through aligning their activities, along six “building blocks” that cover the following areas:
- Alignment with mitigation goals
- Adaptation and climate-resilient operations
- Accelerated contribution to the transition through climate finance
- Engagement and policy development support
- Align internal activities
With this publication, the project consortium has elaborated inputs to each of the building blocks, in order to provide recommendations for an ambitious, robust yet practical implementation of the Paris Agreement. At COP25, the multilateral development banks (MDBs) have presented a framework to align their financial flows with the objectives of the Paris Agreement. They will road test their approach, starting in 2020 and refine criteria for the Paris Alignment over time. The discussion papers give concrete principles and recommendations that should be taken into account.
The discussion papers have been shared with all members of the MDB Group, as well as with reviewers from bilateral development banks and from think tanks and CSOs. Additional comments will be accepted until the end of 2019. We are thankful for the feedback and will incorporate it into the final version of our six memos to be published in early 2020.