US pressure puts World Bank’s climate plan at risk

The World Bank’s climate agenda faces significant uncertainty as closed-door negotiations over its successor to the Climate Change Action Plan (CCAP) have stalled amid pressure from the United States. The US, the bank’s largest shareholder, is advocating for the removal of green targets and increased support for fossil fuel infrastructure in developing countries. This shift threatens to reverse progress made under the CCAP, which has driven a near doubling of the World Bank’s climate funding from $21 billion in 2021 to $39 billion in 2025 and embedded climate considerations across its lending practices. The CCAP, introduced in 2021, committed the World Bank to allocate 45% of its annual budget to projects with climate benefits, supporting emission reduction efforts and vulnerable communities impacted by climate change. However, US Treasury Secretary Scott Bessent criticized the plan as “distortionary” and claimed it hinders poverty reduction and economic growth, calling for the bank to abandon its climate finance targets. Bessent’s remarks also challenged the scientific consensus on human-driven global warming, signaling a broader push to shift the bank’s focus away from climate priorities. The negotiations have exposed divisions among the World Bank’s shareholders. European countries and other climate-conscious nations are pushing to extend a version of the climate plan, while fossil fuel-dependent countries such as Russia and Gulf States have aligned with the US position. The final decision rests with the bank’s management, but shareholder governments wield significant influence over the outcome. Experts warn that diluting the World Bank’s climate commitments could undermine global efforts to address climate change, particularly in developing countries that rely heavily on the bank’s financial support for sustainable development. This impasse comes at a critical moment as the World Bank is the largest international financier of climate action in developing nations. The outcome of these negotiations will shape the institution’s role in global climate finance and its ability to support the transition to low-carbon economies, with far-reaching implications for international climate goals and sustainable development efforts worldwide.