The World Bank NDC Support Facility: Impacts and Lessons Learned Supporting NDC Implementation © 2021 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions, including from the NDC Support Facility (NDC-SF). The NDC-SF is a multi-donor trust fund created to facilitate the implementation of the Nationally Determined Contributions (NDC) pledged by countries under the Paris Agreement in 2015. It is funded with contributions by the German Federal Ministry of Economic Cooperation and Development. The findings, interpretations, and conclusions expressed by World Bank Staff or external contributors in this work do not reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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Cover Design: Stefan Wolf / World Bank Acknowledgements This paper was prepared by Shibani Pandey under the guidance of Marius Kaiser, Ana Bucher and Tom Witt in the Climate Change Group’s Advisory and Operations (SCCAO) team, in coordination and with inputs from other members of the NDC Support Facility team, including Stefan Wolf on cover design, layout and graphics. Marion Davis helped edit the paper. Furthermore, the NDC Support Facility team is grateful for the comments from Genevieve Connors and Luis Tineo. The team would like to thank the Task Team Leaders of the projects the NDC Support Facility has funded for a wealth of information and follow-on discussions. Special thanks to Tao Wang, Katharina Siegmann and Gillian Cerbu for providing comments on earlier drafts. 1 Acronyms CAPE Climate Action Peer Exchange CoFM Coalition of Finance Ministers for Climate Action COP Conference of the Parties GHG Greenhouse gas LTS Long-Term Low-carbon and Climate Resilient Strategy MRV Monitoring, Reporting and Verification NDC Nationally Determined Contribution NDCP NDC Partnership NDC-SF NDC Support Facility UNFCCC United Nations Framework Convention on Climate Change WBG World Bank Group 2 Table of Contents Acknowledgements 1 Acronyms 2 Executive Summary 5 1. Introduction 7 1.1 Driving Transformational Climate Action – the NDC Support Facility 8 1.2 Working with the NDC Partnership 10 2. Impacts of the NDC-SF and Key Lessons Learned 11 2.1 Support for Policy, Strategy and Legislation 11 2.2 Support with Budgeting and Investments 14 2.3 Support for Monitoring and Evaluation 18 3. Enhancing Support: The NDC Deep Dives 21 3.1 Colombia 21 3.2 The Caribbean 21 3.3 Philippines 21 3.4 Rwanda 22 3.5 South Africa 22 3.6 Vietnam 23 4. Ways Forward 24 3 4 Executive Summary Climate change and its impacts are accelerating, systems for NDC implementation and other climate making it more urgent than ever to transition to activities, including greenhouse gas (GHG) low-carbon and resilient economies, as envisioned inventories, which provide key data for in the Paris Agreement. Achieving this will require decision-making. It also supported data collection meeting the commitments made by countries in and management, which is crucial for the their Nationally Determined Contributions (NDCs), development of reliable climate and sustainability significantly increasing ambition as governments targets and to inform policy decisions (see Figure 1, update their NDCs in 2020/2021 and beyond. page 6). One of the many ways in which the World Bank In order to provide more intensive support with Group (WBG) is supporting climate action in its client NDCs, taking a whole-of-economy approach, the countries is through the NDC Support Facility NDC-SF also launched “Deep Dives” in Colombia, (NDC-SF). Launched in 2016, the NDC-SF works with Philippines, Rwanda, South Africa, Vietnam and the developing countries that are members of the NDC Caribbean. These support packages fund activities Partnership, a global coalition of countries and designed to scale up and accelerate climate- institutions working to reduce emissions and build informed development by engaging a broad range of resilience by channeling financial and technical sectors and stakeholders. For example, the NDC-SF resources and promoting cross-sectoral collaboration is helping Rwanda develop innovative financing and the engagement of diverse stakeholders. mechanisms to implement its NDC, while in This paper provides an overview of the NDC-SF’s Colombia, it is supporting efforts to green transport, work over the past three years, identifies key impacts promote energy efficiency and demand-side and lessons learned, and describes its way forward. management, and bolster climate finance through issuance of a sovereign green bond. Impacts of the NDC-SF Lessons from the NDC-SF’s Work The NDC-SF has funded analytics, advisory and training projects that provided information and to Date enabling frameworks to help governments achieve The Facility’s first three years have provided valuable NDCs. Through its support for NDC Implementation lessons that inform its current and prospective Roadmaps, it has also built technical capacity in activities and could be useful to others working on client countries, fostered the participation of a broad NDCs and their implementation. range of stakeholders, and promoted the sharing of In the context of supporting policy, strategy and best practices. legislation, key lessons include: The NDC-SF also provided support to countries in • Integrating and aligning NDC priorities into assessing the costs of NDC-linked activities and national development strategies and plans can finding ways to fund them. This involved strengthen buy-in from planning and sector mainstreaming NDCs in national budgets, creating ministries. NDC-aligned fiscal frameworks, and developing NDC investment plans to serve as the foundation for • Mainstreaming NDC implementation calls for a mobilizing innovative and scalable financing strategic approach that draws on time-sensitive solutions. opportunities inherent in countries’ development planning and budgeting processes Finally, the NDC-SF supported the design of and addresses stakeholder interests. monitoring, reporting and verification (MRV) 5 Figure 1 NDC-SF Thematic Pillars and their Key Focus Areas Polic , Str t & Bud tin & Monitorin & L isl tion Inv stm nts Ev lu tion • M instr min NDCs into • Int r tin NDC prioriti s into • Incr sin th tr nsp r nc nd lon -t rm d v lopm nt pl ns nd countri s’ n tion l bud tin ccount bilit of NDC l isl tion t th n tion l, proc ss s nd fisc l polici s; impl m nt tion; nd subn tion l nd s ctor l l v ls; nd • Informin nd pr p rin inv stm nts • Scopin out inv stm nt opportuniti s • En in nd li nin ch mpions nd pip lin s for inv stm nt; nd for clim t inform d proj cts. nd k st k hold rs. • Id ntif in nd ddr ssin inv stm nt b rri rs throu h polic r form. • Timely laws and regulations can be important to impacts. Working with the NDC Partnership, it will accelerate the uptake of low-carbon and also deepen support to countries, specifically climate-resilient infrastructure in countries. focusing on: • The use of an NDC Implementation Roadmap • Successful completion of ongoing NDC can be instrumental for stimulating the enhancements, which is especially important as participation of diverse stakeholders, including governments are now focused on economic national climate champions who are in key recovery after the COVID-19 pandemic. More institutions beyond the Ministries of work will be needed to highlight the impacts of Environment and Climate Change. COVID-19 on NDC implementation and help inform future NDC iterations. In the context of budgeting and investments, key lessons include: • Scaling up support for the development of Long-Term Low-carbon and Climate Resilient • NDC Investment Plans can help to identify policy Strategies (LTS), so that countries can make reforms that can align and unlock low-carbon better near-term decisions, setting the direction and climate-resilient investments from the of the iterative short- to mid-term NDCs. This private and public sectors. can drive the necessary shifts to limit climate • Transformative risk mitigation instruments and change, improve public health, promote social finance can be crucial to overcoming investment inclusion and lift people out of poverty. barriers for scaling up low-carbon technologies • Scaling up dedicated economic recovery and climate-resilient practices. support, such as the COVID-19 Green Response In the context of monitoring and evaluation, key and Recovery initiative, which provides lessons include: just-in-time support to ensure pandemic • Adapting national monitoring frameworks to recovery plans are green and climate- incorporate NDC-related MRV tools can help to compatible. It also provides targeted Sustainable systematically inform policy decision-making Recovery Technical Assistance, including and boost the transparency of climate action. through advisers embedded in ministries of finance, to support countries on specific • Strong governance structures and clearly technical issues related to a “green” recovery. delineated institutional roles can be important for scaling up NDC-aligned MRV systems. With this support, the NDC-SF aims to maximize the value it brings to its client countries in advancing their climate commitments to achieve net-zero Ways Forward emissions and bolster climate resilience in the The NDC-SF will keep supporting countries, drawing coming decades. on lessons learned to further improve outcomes and 6 1. Introduction Global climate action is falling far short of what is The first NDCs were submitted in the lead-up to needed to limit temperature increases to “well COP21 in Paris in 2015. Under the Paris Agreement, below” 2°C, as envisioned in the Paris Agreement – NDCs are to be updated regularly, increasing much less to 1.5°C.1 If catastrophic damage is to be ambition, and every five years there is to be a global avoided, urgent and substantive action is required stocktake to assess whether countries are making on several fronts: National governments must adopt sufficient progress, collectively, to meet their a holistic approach to “mainstream” climate action in agreed-upon goal (see Figure 2). their development strategies. The private sector Yet even as countries need to accelerate climate must decarbonize supply chains and transform its action, the COVID-19 pandemic threatens to slow it. business models. Financial institutions must redirect As it has spread around the world, COVID-19 has investment streams and instruments away from precipitated a humanitarian and economic crisis high-carbon activities and toward “green” that will result in a global economic recession, alternatives. Citizens must use their influence as increased poverty and social discontent, and a voters and consumers to drive climate action. mountain of debt for most countries. The current juncture is especially critical. Under the The economic responses and recovery efforts Paris Agreement, countries were slated to update undertaken by governments do present the chance their Nationally Determined Contributions (NDCs) to advance climate goals. Certainly, recovery and submit them to the UN Framework Convention packages and investments must avoid undermining on Climate Change (UNFCCC) by the end of 2020, long-term climate goals. They can also leverage the though the next UN climate summit (COP26) has socio-economic benefits of ambitious climate been postponed to late 2021 due to the COVID-19 actions, such as green infrastructure investments pandemic. Each country’s NDC reflects the efforts it with high job multipliers. In this context, NDCs can is willing to make to reduce greenhouse gas provide a multi-sectoral framework for a green emissions and adapt to the now-unavoidable economic recovery. Even if they fall short of the impacts of climate change. ambition needed to achieve the goals of the Paris Figure 2 The Paris Agreement’s Ambition-Raising Mechanism Ambition R isin M ch nism sin Am bition Incr Th P ris A r m nt r quir s ll P rti s to: put forw rd th ir b st fforts to r duc NDC Impl m nt tion NDC Impl m nt tion NDC Impl m nt tion GHG missions nd incr s r sili nc nd R vision nd R vision nd R vision throu h p riodic r vi w proc ss, nd 2015 2020 2023 2025 2028 str n th n th s fforts in th rs h d. r port r ul rl on th ir missions nd on Ev r 5 rs th r will b lob l stockt k th ir impl m nt tion fforts throu h to ss ss th coll ctiv pro r ss nd to inform furth r lob l stockt k . individu l ctions b P rti s. 1 IPCC. 2018. “Summary for Policymakers.” In Global Warming of 1.5°C. An IPCC Special Report on the Impacts of Global Warming of 1.5°C above Pre-Industrial Levels and Related Global Greenhouse Gas Emission Pathways, in the Context of Strengthening the Global Response to the Threat of Climate Change, Sustainable Development, and Efforts to Eradicate Poverty, edited by V. Masson-Delmotte, P. Zhai, H.-O. Pörtner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, et al. Geneva: Intergovernmental Panel on Climate Change. https://www.ipcc.ch/sr15/. 7 Agreement, NDCs are important official statements measures, discloses greenhouse gas (GHG) of countries’ commitment to climate action. They can emissions, and applies a shadow carbon price to thus help leaders to envision a post-COVID-19 future investments. The WBG is committed to supporting with accelerated job creation, improved public countries with the right tools to translate their NDCs health outcomes, less poverty, and also lower into sustainable development pathways. carbon emissions and greater climate resilience. Moreover, as countries work to contain the spread and impact of COVID-19, the WBG is moving quickly to provide fast, flexible responses. It will be 1.1 Driving Transformational Climate providing up to US$160 billion in financing tailored Action – the NDC Support Facility to the health, economic and social shocks countries are facing. As part of the Bank Group’s COVID-19 The World Bank Group is the largest multilateral response, lending may shift to development policy funder of climate investments in developing financing. Ensuring that this includes climate actions countries, having committed $83 billion to as part of a broader economic recovery package of climate-related investments over the last five years. reforms will be critical. There may also be In 2020, the WBG committed $21.4 billion to opportunities for greening the economic recovery, climate-related investments, surpassing targets for thereby effectively also supporting NDC the third year in a row.2 Initially guided by its implementation in countries. These efforts will 2016–2020 Climate Action Plan and currently under entail supporting interventions that address both a new, ambitious set of climate targets,3 the Bank short-term needs, such as job creation and Group is driving systemic change in client countries economic activity, as well as long-term goals, such as by stepping up support for adaptation and resilience increasing resilience, accelerating decarbonization on par with mitigation actions, leveraging public and and shifting to a sustainable growth trajectory. private finance, and creating markets for climate business. The WBG’s Action Plan on Adaptation and A key mechanism to drive transformational climate Resilience4 further reiterates a commitment to action, including during this pandemic, is the Bank’s supporting development approaches that are NDC Support Facility (NDC-SF), which seeks to compatible with the long-term goals of the Paris promote rapid, material action on implementation Agreement. and enhancement of the NDCs in client countries through national-level actions, while advancing the The WBG is increasingly using Systematic Country global Sustainable Development Goals (see Figure 3, Diagnostics (SCDs) to identify economic and policy page 9). constraints to climate action in countries, and to develop climate-informed Country Partnership Frameworks (CPFs). As part of mainstreaming climate considerations into its operations, it screens projects for climate risks and builds in risk mitigation 2 World Bank. 2020. “World Bank Group Exceeds 2020 Climate Finance Target for 3rd Consecutive Year - $21.4 Billion in Funding for Climate Action.” Website feature story, August 30th. https://www.worldbank.org/en/news/feature/2020/08/30/world-bank-group-exceeds-2020-climate-finance-target-for-3rd-consecutive-year-214- billion-in-funding-for-climate-action. 3 World Bank, IFC, and MIGA. 2016. “World Bank Group Climate Change Action Plan 2016–2020.” Washington, DC: World Bank, International Finance Corporation, and Multilateral Investment Guarantee Agency. http://hdl.handle.net/10986/24451. 4 World Bank. 2019. “The World Bank Group Action Plan on Climate Change Adaptation and Resilience.” Washington, DC: World Bank. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/519821547481031999/the-world-bank-groups-action-pla n-on-climate-change-adaptation-and-resilience-managing-risks-for-a-more-resilient-future. 8 Figure 3 The NDC Support Facility Quick F cts Th NDC Support F cilit (NDC-SF) is multi-donor As of Nov mb r 2020, th NDC-SF h s portfolio of 83 proj cts trust fund with k contribution b G rm n ’s in 50 countri s, cov rin div rs r n of s ctors in ll six F d r l Ministr of Economic Coop r tion nd r ions. This lso includ s “NDC D p Div s” in fiv countri s D v lopm nt (BMZ). nd r ion which provid s st mic support for full d c rboni in nd cr tin r sili nt conomi s. Th NDC-SF is m n d b th WBG Clim t Ch n Group. Th NDC-SF funds th op r tion of th S cr t ri t of th Co lition of Fin nc Minist rs for Clim t Action. It brin s Cr t d in 2016 s contribution to th NDC to th r fisc l nd conomic polic m k rs from ov r 50 P rtn rship, th NDC-SF provid s r nts to WBG countri s in l din th lob l clim t r spons nd in s curin t ms to support ctiviti s th t n bl countri s to just tr nsition tow rds low-c rbon r sili nt d v lopm nt. impl m nt nd nh nc th ir NDCs. NDC-SF Country Engagements NDC-SF Deep Dives NDC Partnership Member Countries IBRD 44604 | JUNE 2020 Support Ar s Th m tic Pill rs S ctors Environm nt An l tics & En r & Bud tin & A ricultur nd N tur l Knowl d Extr ctiv s Inv stm nts R sourc s Sh rin Fin nc , M cro conomics, C p cit Monitorin & Comp titiv n ss Gov rn nc Tr d nd Buildin Ev lu tion nd Innov tion Inv stm nt Cross-s ctor l Polic , Soci l, Urb n, Coordin tion Str t & Rur l nd Tr nsport W t r L isl tion R sili nc 9 1.2 Working with the NDC numerous developing countries, developed Partnership Plans to specify implementation Partnership priorities and identified implementing partners (including the WBG, intergovernmental A prerequisite for NDC-SF funding is for a client organizations, regional development banks and country to be an active member of the NDC multi- and bilateral development agencies) to Partnership. Launched in 2016, the Partnership is a provide support. coalition of 112 countries, 42 international institutions and 33 associate members, working With the second round of NDCs due to be submitted together to mobilize technical and financial support for COP26, the Partnership launched a Climate for the implementation of NDCs. Through a formal Action Enhancement Package (CAEP) in 2019 to help country engagement process (see Figure 4), it countries boost the ambition of their NDCs and leverages the skills and resources of its partners to accelerate their implementation. It also launched advance the goals of the Paris Agreement. It also several initiatives responding to COVID-19, including, maintains a knowledge exchange platform on most notably, economic advisory support on NDC-relevant topics. recovery measures that address climate change and sustainable development issues. Since its launch at COP22 in 2016, the Partnership has held intra-ministerial and donor dialogues in Figure 4 The NDC Partnership Country Engagement Process To support its m mb rs with th impl m nt tion of th ir NDCs th NDC P rtn rship und rt k s countr n m nt proc ss ! Countr r qu sts support throu h NDC P rtn rship Impl m ntin p rtn rs r spond to r qu st nd indic t WBG t m ppli s for support NDC Support F cilit r nt to r spond to Countr pr p r s P rtn rship Pl n* in clos r qu st in lin with th coll bor tion with P rtn rs countr n m nt proc ss. P rtn rship Pl n t k s ff ct to support nd cc l r t NDC impl m nt tion *P rtn rship Pl n: A r sults-b s d work pl n to support nd cc l r t countr ’s NDC impl m nt tion b l v r in r sourc s nd xp rtis from cross th NDC P rtn rship in coordin t d w . 5 More information is available at https://ndcpartnership.org. 6 As of April 2020. 10 2. Impacts of the NDC-SF and Key Lessons Learned The NDC Support Facility aims to drive country-level The NDC-SF’s focus in this realm can be action in three key areas: policy, strategy and summarized as: legislation; budgeting and investments; and • Mainstreaming NDCs into long-term monitoring and evaluation. In this section we development plans and legislation at the present the impacts of the NDC-SF in each of those national, subnational and sectoral levels; and areas, with specific examples, and distill lessons for future engagement with client countries. • Engaging and aligning champions and key stakeholders. Below we present examples from our country 2.1 Support for Policy, Strategy and engagement. Legislation To ensure NDCs are implemented and targets are Mainstreaming NDCs into long-term met, policies and laws need to be in place that development plans and legislation enable climate action especially in priority sectors Mainstreaming the NDC into Mozambique’s that have high GHG emissions and/or are vulnerable Five-Year Plan (2020–2024) to climate change. Strategies and roadmaps need to The NDC-SF supported the development of a outline the required actions, the key actors who roadmap for implementing key adaptation need to be engaged and a timeline for strategies and targets in Mozambique’s NDC, as well implementation. as a GHG inventory. The adaptation and mitigation NDC-SF projects have funded analytics, advisory and measures were then incorporated into the training that informed the development of sectoral government’s Five-Year Plan (2020–2024). Needs strategies and policies. They have provided assessments at the national and provincial levels information, enabling frameworks and helped produce quantitative targets and indicators, capacity-building to help countries achieve their making the NDC an integral part of national NDCs, including in the forestry, energy and transport development planning. The NDC roadmap was also sectors. The NDC-SF has helped countries to design instrumental in engaging key national low-carbon, resilient development pathways; decision-makers, such as the Ministry of Economy identify NDC priority actions and resource and Finance. constraints; assess the benefits and costs of Developing a National Action Plan for resilient achieving climate targets and goals and understand coastal areas in Georgia the relevant political economy. Georgia’s NDC prioritizes actions to boost the Furthermore, projects supported NDC resilience of its coastal areas, as it faces serious Implementation Roadmaps, which are crucial in threats due to sea-level rise and extreme weather enabling cross-sectoral coordination, a major events in its Black Sea Coastal Zone. A study of challenge for NDC implementation. Through the climate change impacts, combined with medium- Roadmaps, the NDC-SF builds technical capacity in and long-term economic models, informed policy client countries, stimulating the participation of a recommendations at the national, regional and broad range of stakeholders and the sharing of best municipal levels for climate-resilient urban planning, practices. They promote a long-term vision for infrastructure investments, delivery of municipal advancing rapid action on NDCs in line with a services, and tourism services. The study highlighted country’s development goals. the importance of implementing targeted monitoring schemes for tracking climate change 11 impacts, and of adopting a sustainable approach to experiencing erratic weather due to increased boosting adaptation and resilience using green climate variability, accompanied by lower crop technologies and natural solutions. yields and food insecurity. Data produced by this project will also help Guatemala to update its NDC, Integrating Bangladesh’s renewable energy NDC with strong stakeholder involvement. target into its power system master plan An NDC-SF project provided trainings and toolkits to Facilitating inclusive dialogue for NDC national power planners in Bangladesh, supporting implementation in Brazil them to update the power system master plan to The NDC-SF helped facilitate dialogues in Brazil in achieve the country’s NDC target of generating 10% line with the UNFCCC’s Global Talanoa Dialogue of its electricity from renewable resources by 2020. process, in which leaders from the public and This has reinforced national efforts to achieve the private sectors and civil society share stories and Sustainable Development Goal (SDG) of universal perspectives on climate action. The project’s electricity access by 2030. Bangladesh’s power sector assessment of the macroeconomic benefits of is among the fastest-growing in South Asia; it offers implementing Brazil’s NDC helped inform broader immense opportunities for lowering the country’s dialogue on revising the Brazilian National Plan of carbon footprint. The technical expertise gained Climate Change and the NDC Implementation through the project will be instrumental for planning Strategy, as well as including budgeting and financial investments in grid stability and storage, both of targets for the NDC in the Brazilian Pluriannual Plan which are crucial for scaling up renewable energy cycle. Moreover, the project has built and building a greener economy. multi-stakeholder support for developing policy tools to regenerate forest ecosystems and sustainably manage forests at scale. Lessons learned Integrating and aligning NDC priorities into national development strategies and plans can strengthen buy-in from planning and sector ministries. Such an approach emphasizes the co-benefits of climate action to achieve broader Photo: Dominic Chavez / World Bank development goals, so that a country’s medium- to long-term vision translates into a low-carbon and climate-resilient development trajectory. It can strengthen political buy-in and promote Engaging and aligning champions and key resource-efficient modes of collaboration, and stakeholders shared decision-making among sector and planning Supporting participatory NDC implementation in ministries, by identifying opportunities to work Guatemala towards shared goals. This is important for The NDC-SF has helped Guatemala adopt a roadmap systematically translating NDCs into concrete to achieve its NDC by bringing together stakeholders opportunities to deliver economic and development and promoting dialogue across institutions to benefits, including job and business opportunities, identify and cost out adaptation measures in priority improved health, market competitiveness, and sectors. This is aimed at strengthening climate sustained and inclusive growth. budgeting and financial management to achieve NDC targets. Widely recognized as highly vulnerable to climate change impacts, Guatemala has been 12 Mainstreaming NDCs requires seizing time- The use of an NDC Implementation Roadmap sensitive opportunities in countries’ development can stimulate stakeholder participation and planning and budgeting processes and addressing mobilize national champions in climate action. stakeholder interests. Implementing an NDC An Implementation Roadmap is a tool to prioritize entails not only identifying the right entry points, and sequence actions, assign roles and such as development plans, budget circulars and responsibilities, and understand budget needs for strategies, but also aligning actions with the implementing a country’s NDC. Such a structured timelines of national planning and budgeting approach can help identify gaps in market processes. These processes can be leveraged to information, financing, policies and technical elevate the profile of NDC-relevant initiatives and capacity that typically stall national climate action projects, by raising awareness of climate issues (see Box 1). A stakeholder mapping exercise can be among policymakers, the private sector and the used, for example, to identify champions who are public. It is also crucial to strategically address the high-ranking, in key institutions, beyond the incentives, motivations and influence of different Ministries of Environment and Climate Change, and stakeholders. The current discussions about able to shape the development of policies and COVID-19 economic recovery and how to incorporate programs to prioritize climate action in national climate and sustainability considerations are a case development. This entails integrating the interests in point. of diverse stakeholders and identifying shared challenges and solutions that support NDC goals. Box 1 An NDC Implementation Roadmap for Achieving Côte D’Ivoire’s 42% Renewable Energy Target Côte d’Ivoire has enormous potential for renewable champion and stimulated the creation of a new energy generation, but it faces significant market, renewable energy association, APERCI, with 22 policy and finance-related hurdles to decarbonizing member companies across the solar, hydropower its energy sector. This project, the first of its kind in and biomass sectors. In addition, the Bank has the country, brought together project developers, partnered with the government to launch a new regulators, policymakers, investors, donors and Scaling Solar Program comprising 60 MW of other stakeholders to develop a for achieving the grid-connected solar power infrastructure. country’s NDC target of 42% renewable energy generation by 2030. These interactions were crucial for identifying challenges in deploying specific technologies and unlocking investment opportunities, by enabling the private sector to clearly articulate its needs to policymakers. The Roadmap helped the Ministry of Energy draft a new renewable energy policy and strategy for off-grid electrification, and issue a new ordinance that has accelerated the deployment of renewables. Project developers and energy companies are now committed to helping the government achieve an electricity access rate of 60% by 2020. A new World Bank Development Policy Operation has reinforced the project’s Photo: IFC impacts. The project also identified a private-sector 13 Timely laws and regulations can be important to 2.2 Support with Budgeting and accelerate the uptake of low-carbon and climate-resilient infrastructure in countries. Investments Several NDC-SF projects have highlighted that the Ministries of finance, which play a key role in taking absence of necessary laws and regulations can stall action on climate change, need to have an coordination, for example, between national and understanding of the fiscal implications of climate sub-national governments as well as between line change and of the implementation of climate action agencies. Supportive policy and regulatory as presented in the NDC (see Box 2). Understanding frameworks are also important for incentivizing to what extent national budgets are already funding private sector participation in climate-smart (or under-funding) climate action yields key insights infrastructure development. The private sector is to inform spending. Mainstreaming NDCs into fiscal typically averse to investments that bear policy or policy considerations and public financial regulatory uncertainties and risks. Equally important management systems can ensure that the economic is the need for laws and regulations to be consistent and fiscal implications of the climate agenda are and streamlined across sectors and agencies. factored into growth and development strategies. Box 2 From Climate Action Peer Exchange to a Coalition of Finance Ministers for Climate Action So far the engagement of ministries of finance in economic policymakers from 52 countries in climate issues – including the development and leading the global climate response and in securing implementation of the NDCs – has been limited. a just transition towards low-carbon resilient However, this lack of engagement has shown to be development. Its Santiago Plan of Action provides a unfavorable for the planning and financing of roadmap to strengthening competencies for national climate action. By funding the Climate integrating climate into economic policymaking in Action Peer Exchange (CAPE), the NDC-SF supported Ministries of Finance. Members have signed on to the strengthening of the engagement of finance the ambitious Helsinki Principles, a positive signal ministries on climate change and national climate that ministers are becoming increasingly engaged change commitments. The objective of the in coordinating national responses to climate WBG-hosted knowledge exchange forum was to change across government agencies. help countries efforts to protect their development Important progress has been made under Helsinki and poverty reduction efforts in the face of climate Principle 6, where countries commit to “engage change, by ensuring that fiscal policy and public actively in the domestic preparation and financial management were also geared toward implementation of Nationally Determined addressing climate risks and impacts, besides sector Contributions (NDCs) submitted under the Paris policies. CAPE conducted a series of international Agreement.” Led by Uganda and Jamaica, a note has training workshops for finance ministries building been prepared on the role of ministries of finance in capacities of staff on topics including Fiscal Policy the preparation and implementation of NDCs, which and Reform for Climate Action, NDCs and Green aims to inform the ministries’ actions in the coming Investment, Environmental Fiscal Reforms for Low months as countries are preparing their NDCs.i Carbon Growth, Carbon Taxation and Climate Change Budget Tagging. Based on the initial work by the CAPE, the Coalition of Finance Ministers for Climate Action (CoFM) was established in 2019, bringing together fiscal and i Coalition of Finance Ministers. 2020. Ministries of Finance and Nationally Determined Contributions Stepping Up for Climate Action. World Bank, Washington, DC. https://www.financeministersforclimate.org/sites/cape/files/inline-files/Helsinki%20Principle%206%20-%20July%2015%202020%20update.pdf. 14 Despite having defined their climate priorities, many proposed fiscal reforms and initiatives have helped countries have yet to cost out their NDCs accurately the government prepare legislation to introduce and secure the finance required for their fiscal instruments to reduce emissions and implementation. In many instances, fiscal frameworks encourage public and private investment in climate and policies in countries favor fossil fuel-intensive mitigation and adaptation projects. The budget activities and create barriers for scaling up low tagging exercise helped the government issue the carbon and resilient investments. world’s first sovereign Green Sukuk (Shariah- The NDC-SF has supported studies on the costs of compliant finance products), amounting to US$1.25 NDC-linked activities, on mainstreaming NDCs in billion in 2018, opening a new channel for Indonesia national budgets and created NDC-aligned fiscal to tap into international climate finance.7 frameworks. It has also developed NDC investment The project also informed a Development Policy plans and pipelines of bankable projects in key Operation in the country focused on mainstreaming sectors such as agriculture, transport and energy. climate in budget tagging and on supporting fiscal Investment plans aligned with national, subnational reforms to help the government achieve its and/or sector development plans, a lack of which is a medium-term economic development and poverty frequently cited challenge, are crucial for developing reduction goals. As Southeast Asia’s largest transformative projects and mobilizing innovative economy, Indonesia aims to become a champion of and scalable financing solutions. green growth in the region and is incorporating low-carbon development policies in its The NDC-SF’s focus in this realm can be summarized medium-term development plan for the 2020–2024 as: period. • Integrating NDC priorities into countries’ national Aligning fiscal policies with Morocco’s NDC budgeting processes and fiscal policies; With NDC-SF support, Morocco worked towards • Informing and preparing investments and aligning its policies and expenditure frameworks pipelines for investment; and with NDC priorities in the water, energy and • Identifying and addressing investment barriers agriculture sectors, addressing some of the barriers through policy reform. to using public funds efficiently and to attracting private investment in low-carbon infrastructure. The Below we present examples from our country project found that adjustments to energy taxes and engagement. subsidies, combined with pollution taxes, would be effective at setting long-term price signals in the economy to catalyze investments in clean energy. Integrating NDC priorities into a country’s national budgeting processes and fiscal Supporting a budget tagging and expenditure policies tracking tool in Uganda A project in Uganda has underscored the critical role Enabling environmental fiscal reforms in that budget tagging plays for mainstreaming climate Indonesia considerations into government functions and key An NDC-SF project developed tools and methods to sector ministries. It is building the capacity of the help Indonesia’s Ministry of Finance and line Ministry of Finance, Planning and Economic ministries analyze the budgetary impacts of Development and line ministries to institutionalize a different NDC implementation pathways. The 7 World Bank. 2018. Case Study: First Corporate Green Bond in Indonesia Supporting Indonesia’s Efforts to Fight Climate Change. World Bank, Washington DC, World Bank. http://documents1.worldbank.org/curated/en/856781551372777380/First-Corporate-Green-Bond-in-Indonesia-Supporting-Indonesia-s-Efforts-t o-Fight-Climate-Change-Case-Study.pdf. 15 tracking and reporting system for climate and Scaling up resource mobilization for climate NDC-related expenditures. The government is action in the Pacific Alliance – Peru, Colombia, looking to generate robust analytics to identify Mexico and Chile upstream climate risks and vulnerabilities of public An NDC-SF project is extracting lessons-learned investments and integrate resilience building from Chile’s experience as the first sovereign issuer measures into the national budget and planning of labelled green debt in the Americas to finance processes. This will allow the Ministry to work closely sustainable investments, in line with the country’s with line ministries to plan and implement targeted NDC commitments. Chile’s experience will be investments in low-carbon and climate-resilient applied to the other sovereigns in the Pacific Alliance development projects, considering the timeline of to provide guidance on a path forward. The project national budgeting cycles. is enhancing the capacity of Ministries of Finance across the Alliance to understand how best the sovereign issuer can address both growing Informing and preparing investments and international interest in ESG-sensitive assets, as well pipelines for investment as the need to raise new funding to finance their NDCs. The sharing of these lessons learned is Developing Climate Smart Agriculture Investment expected to strengthen the debt management Plans (CSAIPs) in Namibia, Cote d’Ivoire, Mali, strategies and capacity of Pacific Alliance sovereigns Morocco and Nepal to tap the capital markets to fund NDC In Namibia, a CSAIP is under development to identify implementation at lowest cost. opportunities for climate-friendly policy reforms to catalyze financing for implementing sector-specific NDC goals relevant to agriculture, landscape and Identifying and addressing investment water management. barriers through policy reform CSAIPs developed as part of a regional NDC-SF Scaling up clean bus systems in Latin America project in Cote d’Ivoire, Mali and Morocco supporting A regional NDC-SF project in Latin America the Adaptation of African Agriculture initiative8 have researched the drivers and barriers to the uptake of enhanced the private sector’s access to data and cleaner transportation technologies in five cities: analyses on the profitability of investments in Buenos Aires, Mexico City, Montevideo, Santiago climate-informed projects. Quantitative modeling (Chile) and São Paulo. Given that the transport and assessments of climate change impacts were sector accounts for over 35% of GHG emissions in undertaken to identify and prioritize investment Latin America and the Caribbean, it is a priority opportunities in adaptation. sector in the NDCs of many Latin American In Nepal, a CSAIP is being developed to advance countries. The project recommended viable targeted policy actions and investment proposals for business models and financing instruments to scale the creation of a productive, resilient and up clean bus infrastructure, catering to the needs of low-emissions agriculture sector that enhances each city. Proposals included adopting concession agrarian livelihoods and food security outcomes. The models for electric buses, scaling up green finance, project is fostering multi-stakeholder dialogue and and exploring partnerships with electricity providers building the government’s capacity to operationalize to enable investments in local electricity distribution its NDC and the Agriculture Development Strategy networks and in fast-charging infrastructure to under the country’s new federalist structure. accelerate a transition to clean mobility. 8 More information is available at https://www.aaainitiative.org. 16 This project also paved the way for the development instance, NDC Investment Plans can stimulate the of another project in Chile on e-mobility that is design of fiscal transfers between national and providing technical support for assessing and subnational governments and between sector documenting options for the public transport system ministries to incentivize mitigation and adaptation in urban areas. Chile, which updated its NDC in 2020 actions. This can help align the investment choices with NDC-SF support, has ambitious targets on of different stakeholders, including national and decarbonizing its transport sector, including 100% subnational governments, the private sector and electric public vehicles by 2040. consumers, with green growth priorities. The Designing tariffs to scale up electric buses in financial analyses of climate investment Costa Rica opportunities embedded in NDC Investment Plans In Costa Rica, the NDC-SF contributed to an help address information barriers that often deter important national agenda on electrifying the private sector investment in low carbon and resilient transport sector, supporting the government’s solutions. They also enable countries to better plan formation of a multi-sectoral steering committee to policy reforms in favor of phasing out fossil fuel develop an electric transportation initiative headed subsidies, introducing carbon taxes, energy by Costa Rica’s President and First Lady. The country has one of the greenest electric grids in the world, efficiency and demand management measures. with over 98% of power from renewable sources, but Transformative risk mitigation instruments and its transport sector accounts for 60% of GHG finance can be crucial to overcoming investment emissions. Project activities included conducting barriers for scaling up low-carbon technologies technical analyses on the cost structures of electric and climate-resilient practices. According to a buses relative to conventional transport World Bank report,9 infrastructure investment of technologies and building the steering committee’s 4.5% of GDP can enable countries to stay on track to capacity to develop a strategy to set affordable keep global temperature increases below 2°C, and tariffs and identify financing sources. Costa Rica has to meet related sustainable development goals. also become the first Latin American country to assess the energy impacts of electrifying the Even though low-carbon pathways are more transport sector. cost-effective than conventional alternatives in the longer term, innovative risk-informed financing strategies supporting investments are required to Lessons learned stimulate investment in the near term. Factoring in NDC Investment Plans can help to identify policy climate risks in infrastructure planning is important reforms that can align and unlock low-carbon not only to avoid incurring damage to vital and climate-resilient investments from the infrastructure in the face of growing climate change private and public sectors. By mapping out impacts, but also to prevent stranded assets. Risk investment opportunities to implement priority mitigation and financing instruments include carbon actions associated with the NDC as well as pricing, insurance, guarantees and credit identifying financing sources, NDC Investment Plans enhancement measures, among others. can help unlock financing crucial for transitioning to a global low-carbon and resilient economy. For 9 World Bank Group. 2019. Beyond the Gap – How Countries Can Afford the Infrastructure They Need while Protecting the Planet. Washington, DC. https://www.worldbank.org/en/topic/publicprivatepartnerships/publication/beyond-the-gap---how-countries-can-afford-the-infrastructure-they- need-while-protecting-the-planet. 17 2.3 Support for Monitoring and Increasing the transparency and accountability of NDC implementation Evaluation Scaling up an MRV system to support low-carbon The monitoring and evaluation (M&E) of climate transport in Bangladesh action and finance is crucial for developing an In Bangladesh, the NDC-SF enabled the Ministry of evidence base of transformative climate action and Environment’s Forests and Climate Change to finance to accelerate a transition to lower carbon integrate a bottom-up inventory of waterway economies, build resilience and raise global emissions into its national GHG inventory and MRV ambition in line with the Paris Agreement. M&E for the first time. Inland water transport was frameworks allow countries to adjust their NDC identified as a key missing sector in Bangladesh’s actions and finance based on data-driven NDC dialogue, despite its huge potential for both monitoring of impacts and best practices. NDC-SF mitigation and adaptation. The project placed projects have helped identify and close data gaps emphasis on cross-ministerial cooperation to ensure and design specific instruments to scale-up efficient the sector’s emissions are captured in the GHG and transparent national monitoring, verification inventory and laid the groundwork for incorporating and reporting (MRV) systems consistent with low-carbon actions – particularly a modal shift from climate-friendly fiscal frameworks. highways to inland waterways – to be reflected in Strengthening national M&E systems is also forthcoming NDC reporting and updates. The important to enable countries to fulfill their creation of a robust MRV system helped build a reporting requirements to the UNFCCCC and broad coalition, engaging key government agencies address information barriers important for and the private sector for shared, transparent mobilizing climate finance. GHG inventory tools and decision-making to accelerate a low carbon and MRV systems enable countries to monitor and resilient transition in freight transport. report on the progress made towards NDC targets and priorities. These submissions inform the Paris Agreement’s goals for countries to raise their Scoping out investment opportunities for ambition over time, building trust and confidence in climate-informed projects global collective action towards achieving net zero Supporting an NDC update and M&E framework emissions by 2050 and climate neutrality thereafter. for adaptation actions in Rwanda The NDC-SF’s focus in this realm can be summarized The NDC-SF has successfully supported the 2020 as: revision of Rwanda’s NDC, quantifying targets and • Increasing the transparency and accountability identifying priority policy interventions.10 It has also of NDC implementation; and supported the creation of an M&E framework for NDC-linked adaptation and mitigation actions to • Scoping out investment opportunities for complement the government’s efforts to mobilize climate-informed projects. private and public resources for NDC Below we present examples from our country implementation. The project is tied to an NDC Deep engagement. Dive that the NDC-SF is also supporting in the country, focused on advancing innovative financing 10 Republic of Rwanda (2020) Updated Nationally Determined Contribution. Rwanda. https://www4.unfccc.int/sites/ndcstaging/PublishedDocuments/Rwanda%20First/Rwanda_Updated_NDC_May_2020.pdf 18 instruments for scaling up climate action. Project Lessons learned activities also inform the government’s revision of National monitoring systems that incorporate the Environment and Natural Resources Sector MRV tools for NDCs can enable transparent and Strategic Plan in line with the priorities set out in the climate-informed policy decision-making. new NDC. Integrated MRV systems are increasingly important Developing a web-based Geographic Information as countries move from discrete projects or System (GIS) in São Tomé and Príncipe interventions to systemically building low-carbon The NDC-SF supported the development of a and climate-resilient economies. It is pragmatic and web-based GIS to enhance São Tomé and Príncipe’s resource-efficient to design MRV systems that access to information on climate risks and to support and build on existing monitoring systems to monitor a national portfolio of projects focused on track progress towards complementary sets of climate resilience. The country’s NDC strongly priorities and targets. For instance, an integrated prioritizes improving capacities and tools for MRV system can track NDC-related targets on GHG disaster risk management and increasing the emissions reduction and adaptation, while also resilience of key sectors including agriculture, tracking the performance of actions under the SDGs fisheries and health. The platform has improved and gender-related goals. By collating and coordination between the government, the private streamlining data from different levels of sector and donors on NDC implementation. By government, sectors and stakeholders, integrated providing information on the scope and status of MRV systems can help identify bottlenecks, capacity different projects, it has also helped identify constraints and best practices for scaling up the opportunities for follow-on activities and co-benefits of climate action. With a streamlined investments. This project is aligned with the World approach, countries can accelerate the development Bank’s West Africa Coastal Areas Resilience of targeted policies and regulations and identify Investment Project in the country. It has helped pipeline projects with the potential for foster ownership of the climate agenda in key transformative impacts. sectors, and its linkage to that project was MRV systems that track climate finance in instrumental in securing financial support for the addition to mitigation and adaptation targets sustenance of the GIS platform. can help countries gain an understanding of financing gaps and expenditures. They have the potential to remove information barriers crucial for designing policies and regulations that incentivize investment from the private sector as well as government institutions at the national and sub-national levels. The increased transparency resulting from MRV systems helps to demonstrate the continuity of a country’s climate action, strengthening trust among donors and investors and enabling countries access to finance from a broader variety of sources. Photo: World Bank 19 Box 3 Implementation of an Integrated Climate Change MRV System in the Kyrgyz Republic With a 51% poverty rate, mountainous Kyrgyzstan of stakeholders have fostered collaboration and a is highly vulnerable to climate change impacts, results-oriented approach to mainstreaming NDC including droughts, erratic rainfall, and soil erosion implementation as part of development planning. and degradation. Climate change is causing The MRV system has helped establish a baseline to glaciers to melt, leading to water, food and energy identify and report on trends in GHG emissions insecurity. The NDC-SF has supported the levels, the impacts and costs of climate actions, and development of an MRV system to track the the use of international and domestic climate country’s progress on NDC targets and climate finance. The updated GHG inventory provides finance flows related to forestry and biodiversity, granular data to assess the impacts of low carbon and it has supported regular updates of the measures in different areas in the country, in full national GHG inventory. compliance with the UNFCCC MRV framework. Both the MRV system and updated GHG inventory A limited history of collaboration among different are important tools to enable Kyrgyzstan to comply ministries, combined with gaps in data and data with reporting and transparency requirements quality issues, initially created hurdles for the timely under the Paris Agreement and ultimately raising completion of project activities. However, enhanced its ambition. access to quality data and a wider network Strong governance structures and clearly instituting policies and regulations that require delineated institutional roles and accountability regular reporting on climate action and finance can be important for scaling up NDC-aligned MRV aligned with UNFCCC reporting timelines, countries systems. While robust technical design, data quality can increase accountability of NDC actions. M&E and strong indicators are important, MRV systems frameworks with strong institutional arrangements, need to have strong institutional and governance but flexibility to adjust to the evolving needs of frameworks in place, as well as guidelines that national climate action, are essential for accelerating specify the roles and responsibilities of the different evidence-based and results-oriented NDC stakeholders and “champions” at the strategic, implementation. operational and political levels (see Box 3). By 20 3. Enhancing Support: The NDC Deep Dives Informed by the NDC-SF’s experience since 2016, an 3.2 The Caribbean additional measure was established in 2019 to Though NDC planning and implementation are provide more in-depth support: NDC Deep Dives, nationally driven processes, the Organization of which have been launched in five countries and one Eastern Caribbean States (OECS) countries – Dominica, region so far, taking a whole-of-economy approach. Grenada, St. Lucia, St. Vincent and Grenadines, and These comprehensive support packages, slated to Antigua and Barbuda – have shared NDC priorities, be completed by the end of 2021, fund challenges and gaps in NDC implementation. This NDC country-specific and multi-sectoral activities to Deep Dive directly supports national efforts, but also accelerate climate-informed development across regional activities to advance NDC implementation. It different sectors. Given the multi-faceted challenges takes an economy-wide approach, focusing on of accelerating NDC implementation and raising strengthening governance, institutional, legal and ambition, Deep Dives seek to scale up system-wide regulatory frameworks; identifying cost-effective impacts by engaging a broad scope of sectors and policies and investment operations; and improving stakeholders. Given the timing, the Deep Dives are climate finance readiness. also being informed by the economic landscape affected by COVID-19. Measures are therefore being Support is directed at identifying policies, and more taken for the work to contribute to sustainable importantly, investment options that deliver the recovery. desired climate outcomes, in the context of each country’s economic and social goals and overall development context. By improving climate finance 3.1 Colombia readiness, the Deep Dive also seeks to build capacity In Colombia, the NDC Deep Dive focuses on for accessing climate finance for NDC implementation. enhancing technical capacity, institutional readiness It is engaging ministries of environment, finance and and cross-sectoral coordination to advance NDC their equivalents in the OECS countries, with special implementation, specifically in the energy, transport, attention to building governments’ capacity to access industrial, solid waste and green finance sectors. It climate finance. It also complements the NDC-SF’s aims to deliver transformative impacts by support for Antigua and Barbuda on the development supporting activities such as national programs on of an investment plan and pipeline of projects to boost green urban mobility and on modernizing and the resilience of the countries’ energy sector. greening the trucking fleet; a national program to promote energy efficiency and demand-side management; the issuance of Colombia’s first 3.3 Philippines sovereign green bond; and designing a solid waste The NDC Deep Dive in the Philippines seeks to management and reuse pilot program. enable key climate adaptation and mitigation investments and introduce best practices to support Lessons from these initiatives at the national and the implementation of the current NDC and increase local levels are expected to inform an update of ambition in the upcoming revision. It encompasses Colombia’s NDC and the development of a long-term agriculture, coastal resilience, energy, transport, strategy for climate resilience and low-carbon finance and the environment, with support to the growth. Importantly, a prospective WBG COVID-19 relevant ministries. The work builds on three recovery package in the country is also informed by mutually reinforcing pillars to: this work. Multiple government ministries are being engaged and supported. 21 • Support reforms to the Risk Resiliency Program Thereby the work will strengthen Rwanda’s resilience to strengthen the achievement of national and help to reduce the probability of the country adaptation priorities through multi-sectoral being affected by multiple national emergencies, public planning and budgeting processes; including pandemics, at the same time. • Mainstream adaptation in key sectors, The project will support Rwanda’s Green Fund strengthening analytics and tools for identifying (FONERWA) and Ministry of Finance and Economic and integrating key climate adaptation Development (MINECOFIN) in mobilizing finance measures in the agricultural, coastal and through the development and piloting of new infrastructure sectors; and instruments and institutional structures. The work is led by FONERWA, in collaboration with the Ministry • Support climate mitigation efforts using of Environment, sectoral agencies, MINECOFIN, and carbon-pricing instruments, as well as support Rwanda’s Development Bank. These activities and engagement with the private sector on key areas the flagship projects they produce will also of climate action. complement Rwanda’s revised NDC, submitted in Opportunities are being explored for the Deep Dive May 2020 with NDC-SF support, which raises to contribute to aligning the NDC economy-wide ambition for both mitigation and adaptation. transition plan that is expected to be prepared by 2022 with the country’s upcoming Development Plan (2023–2028) as planned, as well as to informing a 3.5 South Africa prospective COVID-19 economic stimulus package. The NDC Deep Dive in South Africa supports the government’s implementation and update of its NDC, engaging multiple sectors, including energy, transport, water, urban development, finance and environment, and supporting the corresponding ministries as well as the National Treasury. Activities are built on three pillars: • Supporting transformative policy by integrating climate change into macro-fiscal planning and budgeting processes and translating the NDC into concrete actions, with a focus on carbon budgets, sectoral emission targets and a national carbon tax; Photo: Dominic Chavez / World Bank • Closing the financing gap by assessing the infrastructure investment needed to achieve South Africa’s NDC and vision for 2050, and by 3.4 Rwanda building capacity to enable the country to access In Rwanda, the NDC Deep Dive is focused on and monitor the use of international climate enhancing the government’s capacity for financial finance; innovation to accelerate action on both mitigation • Sectoral and spatial priorities, with a roadmap and adaptation. The NDC-SF is helping to identify, and implementation plan that targets sectors at design and operationalize financial instruments and the nexus of land use, water and energy, as well initiatives to leverage private sector climate as geographical “hotspots” that have been investments in a broad range of sectors: prioritized in the country’s 2050 vision. transportation, water, waste, energy, forestry, and disaster risk management and risk financing. 22 The Deep Dive is well positioned to support a investments for NDC implementation by leveraging sustainable and resilient recovery by enabling a the Bank’s sectoral engagements on four critical green fiscal policy response and just transition in transitions: low-carbon energy, low-carbon and critical areas such as agriculture, energy and water. resilient transport, climate-smart landscapes, and It will also help drive investments across sectors in green and resilient urban development. That work is low-carbon infrastructure that is resilient to climate complemented with tools to support a change, pandemics and other shocks. whole-of-government approach, particularly through improvements to investment planning and budgetary processes, the application of fiscal levers, 3.6 Vietnam and strengthening of overall coordination and accountability processes. Multiple government This Deep Dive builds on the NDC-SF’s sustained ministries are being engaged and supported. engagement in Vietnam since 2016, supporting the country’s Plan to Implement the Paris Agreement. It is still too early to analyze the full impact of the Previous work focused on expanding green NDC Deep Dives. However, we can already see that transport infrastructure, strengthening multi- they have been invaluable in supporting countries stakeholder coordination for NDC implementation, to tackle the cross-sectoral challenge of climate and pilots and policy reforms to scale up change by improving the coordination and eco-industrial parks. The Deep Dive will focus on the integration of climate action across sectors. energy, transport and urban development, finance Furthermore, Deep Dives have shown to be and environment sectors. instrumental in leveraging wider World Bank activities, including for a green recovery, in order to The NDC-SF is informing the design, budgeting, support national climate action. coordination and monitoring of policies and 23 4. Ways Forward Meeting the goal of keeping the global temperature international resources and economic growth increase well below 2°C is contingent on overcoming trajectories, may need to be reconsidered in the light the challenges that countries currently face in of the pandemic. More work will be needed to highlight accelerating climate action. Governments urgently the impacts of COVID-19 on NDC implementation and need to address policy, market and financing barriers help inform future NDC iterations. to achieve their NDCs. They also need to raise Supporting the development of Long-Term ambition to achieve net-zero emissions by the second Low-carbon and Climate Resilient Strategies half of the century, and they must build resilience not (LTSs): The NDC-SF is already supporting the only to climate change impacts, but to other major development of LTSs under the Paris Agreement, or threats and uncertainties. elements thereof, in several countries, and is looking Right now, however, governments’ most urgent to further increase its engagement in this realm. By priority is to respond to the COVID-19 pandemic and laying out a long-term vision for climate-informed its economic fallout. As the WBG supports countries, it development, countries can make better near-term is crucial to ensure that recovery efforts keep decisions, as captured in the NDCs, and drive the advancing progress towards sustainability and necessary shifts to limit climate change, improve achieving the Paris goals. public health, promote social inclusion and lift people Working with the NDC Partnership, the NDC-SF will out of poverty. The LTS development process can deepen its support for countries to fully integrate NDC engage sectors and actions that may not yet be priorities with their national development strategies, covered in NDCs, including hard-to-abate sectors, planning and budgeting, including COVID-19 recovery, urban development, transformative technologies and and unlock new investment opportunities. It will also innovation, agriculture, education, gender and health. help countries enhance transparency by tracking Supporting sustainable recovery: The NDC-SF is national GHG emissions levels, climate finance flows, adjusting its existing projects to help countries and the impact of NDC actions, to draw out lessons respond to the COVID-19 pandemic and build back and best practices. Engaging ministries of finance in stronger and greener. Moreover, the Facility is scaling climate action, through the CoFM and beyond, will up dedicated recovery support. It has set up a COVID remain a crucial part of this work. 19 Green Response and Recovery initiative to provide Specifically, the NDC-SF is looking to focus on: just-in-time support to ensure pandemic recovery plans are green and climate-compatible, bringing to Supporting NDC enhancement: The NDC-SF is bear a strategic comparative advantage of the WBG. It supporting the revision of NDCs in several countries. is also providing targeted green recovery technical Chile, Rwanda and Jamaica, for example, have already assistance, by embedding economic advisers and submitted enhanced NDCs at the time of writing.11 We capacity-building for country recovery strategies and aim to inform efforts to increase ambition and stimulus packages. promote more holistic climate action aligned with Achieving the long-term goals of the Paris Agreement national development planning and processes. Where requires substantial and urgent action from multiple countries are considering or actively integrating stakeholders. The NDC-SF will continue to expand the climate change aspects into their economic recovery leverage of the WBG’s extensive experience in packages, NDCs may serve as valuable resource to countries in advancing their climate commitments to develop such green investment plans. At the same achieve net-zero emissions and bolster climate time, the assumptions countries are making to develop resilience in the coming decades. their NDCs, including the availability of domestic and 11 The updated NDCs are available at: https://www4.unfccc.int/sites/ndcstaging/Pages/Home.aspx 24