The World Bank has been accused of drastically over-reporting its climate adaptation finance in a report published by CARE Denmark and CARE Netherlands in January, Climate Adaptation Finance: Fact or fiction? The report, which assessed climate adaptation finance reported by donors for 112 projects in six countries between 2013-2017, found that in 16 World Bank projects assessed there was a net over-reporting of $832 million.
The report raises uncomfortable questions for World Bank leadership about the credibility of the Bank’s climate finance accounting methods, as well as its commitments to scale up its climate finance between 2021-2025. The Bank previously committed to provide $100 billion in direct finance over this five-year period, with 50 per cent of this going to adaptation finance (see Observer Spring 2019).
As the report notes, there remains a transparency gap in adaptation finance reporting by the Bank and other multilateral development banks, as “their in-depth methodology and the evidence behind their climate finance figures remain unpublished.”
Two World Bank projects were profiled in the report. The World Bank committed $500 million to an Earthquake Housing Reconstruction Project in Nepal between 2015-2017, of which $428 million was reported as adaptation finance. However, in-country research conducted by Prakiti Resources Centre concluded, “The project’s objectives and stated outcomes focus overwhelmingly on earthquake-resilient reconstruction, and thus respond to a geohazard unrelated to climate change.” According to the report, the project over-reported adaptation finance by $328 million.
Similarly, a $600 million World Bank Rural Productive Safety Net loan in Ethiopia in 2017 included $313 million reported as adaptation finance. The report noted, “the project’s development objectives and outcome indicators provide no evidence that its design, implementation or review processes explicitly target adaptation or increase the resiliency of food production systems.” According to the report, adaptation finance attributed to the project was over-reported by $106 million.