8 December 2014: In a speech to the Council on Foreign Relations in Washington DC, US, World Bank Group President Jim Yong Kim called on countries to price carbon, eliminate fossil fuel subsidies, create conditions favoring renewable energy and invest in projects that can withstand extreme weather events. He said a 2015 agreement must send signals to investors and financial markets that could help transform economies toward achieving zero net emissions of harmful pollutants before 2100, in order to keep temperature below 2°C. According to Kim, economic policy will be key to achieving this goal.

Paris must “speak as loudly about economic transformation as it does of carbon emissions targets,” according to Kim. He said high ambition would send a strong message regarding the demand and profitability of long-term investments in clean energy and transport systems, sustainable agriculture and forestry and resource-efficient products.

He said every country, regardless of its development level, is capable of decarbonization, and could, inter alia: implement energy efficiency and renewable energy targets; implement performance standards for buildings, vehicles and appliances; remove fossil fuel subsidies; and redirect spending to the poor. He also emphasized adaptation and mainstreaming disaster risk management (DRM), noting the World Bank will help raise a “one-time injection of funds,” strengthen insurance coverage for those most at risk and build resilience.

Kim outlined four components for a successful 2015 agreement: binding language that reinforces collective ambition and provides a clear pathway to zero net emissions before 2100; country contributions that address how to use fiscal and macroeconomic policy levers to “get prices right,” increase efficiency, incentivize decarbonization and address resilience; a financial package that recognizes that public development funds and climate finance should be used to catalyze innovative financing for adaptation and mitigation, and carbon markets based on market mechanisms, taxes and enabling environments; and working coalitions of governments, private enterprises, countries, cities and CSOs, including to support actions to reduce deforestation, build low-carbon cities and establish climate-smart agriculture (CSA). He stressed sufficient financing as a critical component of the Paris agreement.

To achieve net zero emissions before 2100, the World Bank will, among other things, support clean transportation and the building of low-carbon, livable cities, particularly in developing countries, and CSA, Kim said.[World Bank Press Release] [World Bank News Story] [Transcript of Kim Speech and Q and A Session]