It is hoped that the bank will lead a coordinated and robust response to climate challenges, the lawmakers said in a letter to the bank president
Citing India's successful expansion of its solar industry, a group of top American lawmakers has urged World Bank President Ajay Banga to increase investment in climate projects.
"We are heartened to see that you recognise the urgency of this problem and hope that the bank will lead a coordinated and robust response to these challenges," the lawmakers said in a letter to Banga on Wednesday.
The letter was signed by senators Martin Heinrich, Brian Schatz, Peter Welch, Sheldon Whitehouse and Edward Markey along with Congressman Katie Porter.
"It is imperative that the World Bank increases investment in projects that advance climate adaptation and mitigation goals, provide clear and transparent metrics on what projects the bank funds to meet these goals, and efficiently leverage private resources to expand the reach of these climate efforts," the letter said.
The lawmakers urged Banga to leverage the new Country Climate and Development Reports to guide lending decisions and prioritise mitigation and adaptation actions while integrating climate change, resilience and development priorities.
"We also encourage the bank to build upon the range of successful climate projects over recent years like the expansion of the Indian solar industry, the development of climate-smart agriculture in Uruguay and the efforts to expand electrification in parts of Kenya," they said.
With increased climate funding, the bank can expand this work, provide leadership globally and look to examples in other multilateral institutions, like the IMF's Resilience and Sustainability Trust, to supercharge these efforts, they said.
Historically, the wealthiest nations bear the responsibility for most atmospheric carbon emissions and it makes no sense to overburden poor and climate-vulnerable nations with unpayable debts as part of the solution, the lawmakers said.
The bank, they said, must make every effort to extend credit on the most favourable possible terms and rely as much as possible on grants rather than loans.
"We echo our Congressional colleagues, the Biden administration and many other shareholder governments in urging you to deploy the existing capital of the World Bank strategically and for maximum effect," they said.
The lawmakers also strongly urged the World Bank to clearly define what qualifies as climate finance and climate action, and to be transparent about how it chooses climate-related projects.
Identifying these methodologies will also position the bank as a leader in this rapidly growing investment space, they said.
"Additionally, while the World Bank increases climate financing, it must stop investing in fossil fuel projects. Fossil fuel investments still totalled more than USD 14.8 billion since the adoption of the Paris climate agreement in 2015; though, this amount has been falling over time.
"Aggressive action to bring this total to zero is needed immediately so that the bank does fund the irresponsible creation of these stranded assets that will be left behind by the transition away from fossil fuels," the lawmakers said.