Final draft 29 September 2009

World Bank Annual meeting statement

To be held 6 October 2009

Statement by Hon. Ulla Toernaes

Governor of the Bank for Denmark

on behalf of the Nordic and Baltic countriesMr. Chairman, Ladies and Gentlemen,

It is with great pleasure that I am addressing the 2009 Annual Meetings on behalf of theeight Nordic and Baltic countries. I am honoured to represent a constituency, whichconsistently has supported the World Bank’s development mandate. Let me begin bythanking the Government of Turkey and in particular the city of Istanbul for hosting theAnnual Meetings. We are all aware of what a huge task it is to host such big internationalgatherings. As an upcoming host for the international climate change negotiations – theCOP15 – my own country is particularly appreciative of the efforts you have put intoorganizing these Annual Meetings.

Our constituency has decided to focus this statement on one theme only: Climatechange - and how it interlinks with other key development issues. I strongly believe, thatwe still need to stress that climate change represents an unprecedented challenge todevelopment, growth and poverty reduction. However, if done right climate changeefforts can also reinforce development objectives.

Climate change and the economic crisis

The current economic crisis presents us an opportunity for change. We need to moveaway from the notion that carbon emissions are an inescapable by-product of economic1

growth. We do have alternatives. In the humanitarian field you have an expression - to“Build Back Better” – meaning that reconstruction after a disaster should be of betterquality compared to what was destroyed, to prevent similar damages in the future. I seea clear parallel to our current economic crisis and recovery: For me to “Build BackBetter” in this context means to “Get Greener Growth”.

I do realize that the path to greener growth is not without serious obstacles. Hugeamounts of dollars have been invested in finding, transporting and using fossil fuels.Renewable energy sources and techniques need yet to be scaled up in order to offer aviable alternative - not least to developing countries. However, we all know by now thatthe cost of inaction on climate change is higher than the cost of action – actually, Iwould argue costs are so high, they can hardly be estimated in economic terms. We alsoneed to ensure that investments made today are sustainable in a tomorrow’s climate, thatthey are adapted to a changing climate.

As governments we have the responsibility to set the path and lead the way for greenergrowth. We have seen some interesting initiatives in many of the stimulus packages. Butwe need more than that. We need to include those countries not able to afford stimuluspackages. We need public-private partnerships. We need to activate the markets; and weneed to attract more venture capital to make the kind of large scale investments in low-carbon energy that will truly change our energy patterns, and thereby the way wegenerate economic growth. We also need sustainable forest management and agriculturewhich can contribute significantly towards carbon emissions reductions.2

The World Bank has a key role to play in this endeavour both as provider of finance andas distributer of knowledge and capacity building. We have already seen proof of theBank’s ability to mobilize climate finance through the Climate Investment Funds. TheCIF and its governance structure provide us with important lessons for the futureclimate finance architecture under the guidance of the UNFCCC. On the capacitybuilding side we commend the Bank for its accelerated climate activities, which areespecially needed on the adaptation issues. It is encouraging to note that 60% of thisyear’s new Country Assistance Strategies substantively address climate-related activities.This bears witness to the fact that climate change is being built into nationaldevelopment efforts – the best way to ensure long term, sustainable economic growth.

Climate change and energy

As I have already highlighted green growth is closely connected to energy policies. Andwhen it comes to energy policy advice the World Bank has a key role to play. We doacknowledge that the Bank now seems to move into a less-carbon intensive energyportfolio. We strongly support this process and would like to stress the urgency of thematter, since energy investments usually have a long lifespan and thereby “lock” energypatterns for years to come. We thus welcome the Bank`s initiative to establish a TrustFunds under CIF to increase the dissemination of less carbon intensive technologiesand scale up renewable energy in low income countries.

We also do recognize that the World Bank’s financing for renewable energy hasincreased over previous years and that its target set in 2004 has been successfully met.3

However, now is the time to set new and more ambitious targets. We would like to seean even more accelerated growth in renewable energy investments. In fact, we wouldlike to see the Bank reverse its portfolio of energy investments within the next 3 to 4years so that renewable energy reaches an average for all countries well above thecurrent 40%. . The Bank should be a vanguard of renewable energy investments -leading the way for large scale investments from the private market. In this context theBank’s policy advice should also focus on removing distortionary price signals andincreasing energy efficiency. Such changes adapted to each country’s particularconditions are important both for development and the climate.

However, despite an increase in the Bank`s investment in renewable energy, we knowthat the global energy mix still will be heavily dominated by coal and other fossil fuels inthe foreseeable future. Thus the Bank also needs to explore and support cleantechnology options to make coal plants and heavy industry plants cleaner.

We commend the Bank on the new Agricultural Action Plan, putting operationalactivities behind the World Development Report we discussed two years ago. With foodprices reaching a peak last year we are perhaps hearing less about the food crisis today.But the impact at country level is becoming more and more visible – and it hasyet to4

be taken as an integral part of each country’s development strategy. We are lookingforward to working closely with the Bank in setting new standards for integrating landand water resource management in the wake of climate change to help buildingresilience among the poor and vulnerable communities in the developing countries.There are potential controversies between sustainability and productivity. We need toaddress this in a manner where we don’t jeopardise future generations’ access to foodproduction. Agricultural productivity must therefore be increased while minimizing theassociated environmental damage.

Climate change and gender

In many developing countries women provide up to 80% of agricultural labour andproduce 45-90% of domestically consumed food. As managers of household resources –such as water, food and fuel – women are often at the forefront experiencing climatechange affecting daily life. This makes women vulnerable, but it also often provideswomen with first-hand knowledge and solutions regarding climate change.

On the mitigation side, discussions are often of a more technical nature whererecognizing gender implications seem to be an intellectual challenge. However, womenoften play a central role in determining their household’s emission pattern., as they make70 percent of households purchasing decisions. They decide on what kind of fuel that is5

used. How much meat that is consumed. Also women have proven over the years to becrucial players regarding the conservation of forests, reforestation and management oflocal resources. It is therefore important to ensure that women are included in thedecisions on utilizing new green technology.On the adaptation side, links to gender seems more evident since there is focus on theeffects of the most vulnerable (and usually poorest) people. However, there seems to bea need for a more systematic compilation of adaptation solutions created by women atcommunity level. The World Bank could play a lead role here.

We also need to build gender aspects into existing tools related to climate change. Aconcrete proposal would be to more systematically incorporate gender into nationalactions for adaptation and mitigation – the so-called NAPAs and NAMAs. The WorldBank could be helpful in this matter. So far only Bangladesh and Uganda have includedgender in their NAPA.

Before concluding I would like to stress that an important condition for achieving anambitious agreement at COP15 in December is the recognition of the need to supportthe poorest and most vulnerable countries in their efforts to adapting to climatechanges. It is essential that we unleash significantly scaled-up finance and action onadaptation, both now, up-to and beyond 2012. The Nordic-Baltic constituency is alreadyproviding substantial contributions in the area of climate change, to initiativesadministered by the World Bank and beyond.

Mr. Zoellick, on behalf of our constituency, I would like to thank you for your energeticleadership of the World Bank Group. We have had many close areas of cooperation -not least regarding women’s economic empowerment, where you championed theMDG3 campaign so enthusiastically. I appreciate your hard work on the climate changeagenda and I am confident that with the help of you and your skilled organisation wewill make major progress when we meet again for the climate summit in Copenhagen.