World Bank scraps climate finance targets after U.S. criticism

Published 1 July 2026 · india

Following disapproval from the United States administration, the World Bank Group (WBG) has indicated that it would do away with its funding target for climate-centric

Following disapproval from the United States administration, the World Bank Group (WBG) has indicated that it would do away with its funding target for climate-centric projects. Also read | Extreme weather conditions can harm Indian cities: World Bank report “We will complete our shift from inputs to outcomes to maximise development impact. We will retire the 45% climate co-benefits target and the 35% target in the Climate Change Action Plan [CCAP]. We have done significant work in answering client demand and needs,” the World Bank said in its June 29 statement on its CCAP. Launched in 2020 and over a five-year period ending 2026, the CCAP mandated the WBG to allocate 35% of its total financing for projects that reduced emissions or helped communities adapt to climate change. The goal was increased to 45% in 2023. The latest announcement by the World Bank may impact projects in developing countries, including India.

In April, the United States – the WBG’s largest shareholder – expressed its strong disapproval at the CCAP funding target. “The World Bank must maintain focus on its core mission of reducing poverty and increasing economic growth…It also means jettisoning the Group’s 45% climate finance target that breeds inefficiency, distorts economic decision-making, and moves the Bank away from its core mission. At the same time, we expect greater efficiency, discipline, and accountability so that every dollar delivers more impact,” said U.S. Treasury Secretary Scott Bessent. U.S. President Donald Trump, who has labelled climate change a “con job”, has withdrawn the country from the Paris Agreement, the 2015 pledge that binds countries to reduce greenhouse gas emissions in a way that it leads to global temperature not exceeding two degrees Celsius over the pre-Industrial Age temperature by 2100. Much of the subsequent climate action and the global thrust to shield against ongoing damage from climate change – including the World Bank’s – draws from this principle.

Despite the global move towards renewable energy sources, developing countries say they have yet to receive adequate financial support from developed countries – despite commitments – to accelerate the transition. Several projects on In India, the World Bank’s climate-focused projects include electrified freight rail and inland waterways to cut transport emissions; forest restoration and biodiversity conservation in Madhya Pradesh and Meghalaya; climate-resilient agriculture for smallholders; rehabilitation of ageing large dams; community-led groundwater management under Atal Bhujal Yojana; mangrove restoration along both coasts; flood forecasting and embankment strengthening in Bihar’s Kosi basin; solar parks and rooftop solar systems; green hydrogen for hard-to-abate industries; battery storage paired with renewables in Chhattisgarh; Kerala’s post-2018-flood resilience overhaul; and the “One Health” livestock disease programme guarding against zoonotic spillover. The Hindu has reached out to the World Bank spokesperson, asking whether the latest development would impact India-based projects. The spokesperson has not responded so far.