China will need to install around 10,000 gigawatts (GW) of wind and solar capacity to reach carbon neutrality by 2060, according to new Chinese government-endorsed research.
This huge energy transition – with the technologies currently standing at 1,408GW – can make a “decisive contribution” to the country’s climate efforts and bring big economic rewards, the China Energy Transformation Outlook 2024 (CETO24) shows.
The report was produced by our research team at the Energy Research Institute of the Chinese Academy of Macroeconomic Research – a “national high-end thinktank” of China’s top planner the National Development and Reform Commission (NDRC).
The outlook looks at two pathways to meeting China’s “dual-carbon” climate goals and its wider aims for economic and social development.
In the first pathway, a challenging geopolitical environment constrains international cooperation.
The second assumes international climate cooperation continues despite broader geopolitical tensions.
We find that, under both scenarios, China’s energy system can achieve net-zero carbon emissions before 2060, paving the way to make Chinese society as a whole carbon neutral before 2060.
However, the outlook shows that meeting these policy goals will not be possible unless China improves its energy efficiency, sustains its electrification efforts and develops a power system built around “intelligent” grids that are predominantly supplied with electricity from solar and wind.
(Carbon Brief interviewed the report’s lead authors at the COP29 climate talks in Baku last November.)
- Trends governing China’s energy transition
- Scenarios for carbon neutrality
- Pathway to achieving “dual-carbon” targets
- Innovation and market forces for energy transition
- Focusing on enabling forces
Trends governing China’s energy transition
China’s rapid economic growth over the past decades has driven a massive increase in industrial production, particularly energy-intensive industries such as steel and cement, requiring vast amounts of energy.
To meet the high demand for energy, the country has built up a coal-based energy sector.
In 2014, Chinese president Xi Jinping introduced the concept of “four revolutions and one cooperation”, which calls for a drastic change in how energy system development is thought about.
The following 13th “five-year plan” (2016-20) – an influential economic planning document – required a shift from maintaining and developing a system based on fossil fuels to creating a system that is “clean, low-carbon, safe and efficient”.
This led to the announcement of China’s “dual-carbon” targets in 2020, which positioned achieving a peak in emissions by 2030 and carbon neutrality by 2060 as integral to China’s economic development in the future.
As part of this, policymakers are working towards a “new type of energy system”, in which low-carbon technologies will simultaneously provide energy security and affordable energy prices, as well as addressing environmental concerns.
In the past few years, however, electricity demand has grown rapidly due to increased production of goods after the Covid-19 pandemic and the impact of heatwaves.
Furthermore, the supply of hydropower has been hampered by the lack of water because of droughts. This has led to a push for new investments in coal power, despite a massive deployment of solar and wind power plants.
The challenge today is related to this transformation’s speed – how China can vigorously accelerate renewable energy deployment to cover growing energy demand and substitute coal power.
Scenarios for carbon neutrality
CETO24 looks at two scenarios for its analysis of China’s energy transformation towards 2060. The first – the baseline carbon-neutral scenario (BCNS) – assumes geopolitics continues to constrain low-carbon cooperation.
The second – the ideal carbon-neutral scenario (ICNS) – assumes climate cooperation avoids geopolitical conflict.
Both scenarios envision that China will reach peak carbon emissions before 2030 and achieve carbon neutrality before 2060, against a backdrop of the growing urgency of global climate change and increasing complexity and volatility of the international political and economic landscape.
The BCNS assumes that addressing climate change may become a lower priority globally, but that China still meets its “dual-carbon” goals. The ICNS assumes that other countries prioritise accelerating their domestic energy transformation and cooperation on climate change, despite occasional political or economic conflicts.
The outlook models the two scenarios and analyses the transformation of end-use energy consumption in different sectors, such as industry, buildings and transportation.
The CETO model suite, used in the outlook, is illustrated in the figure below. For example, the electricity and district heating optimisation model (EDO, blue box), looks at power, heat and “e-fuel” production in great detail with an hourly resolution, in order to capture the fluctuations in variable renewable energy output at provincial level.
EDO looks at the least-cost pathway to reach the dual-carbon goals for the whole power system, including the production, storage and transport of electricity.
On the demand side, the end-use energy demand analysis model (END-USE, black box) allows for different modelling approaches in the different sectors. The model also includes the processing of fossil fuels and biomass.
The EDO and END-USE models are supported by a socioeconomic model (red box), which looks into the macroeconomic impact of the energy transformation and vice-versa.
The results from the models are used in the summary model (yellow box), which shows the primary energy consumption, the energy flows for the whole energy system and the investments and operating costs for the supply sectors, as modelled in the EDO model.
Our strategy for developing the new type of energy system, based on the models shown above, consists of:
- Focusing on efficient use of energy in the end-use sectors, with an emphasis on a shift from fossil fuel consumption to the direct use of electricity (electrification).
- Transforming the power sector to a zero-carbon emission system, mainly based on wind and solar.
- Ensuring that the grid management system – the system of transmission, distribution and storage of electricity – is able to deal with the fluctuations in production and demand. This includes more focus on flexible demand, as well as digital, intelligent control systems to manage system integration, cost-efficient dispatch of supply and demand, as well as energy security in the short- and long-term.
The approach of the model is to promote system-wide optimisation for the two scenarios. This allows for the analysis of the complex interaction between demand, supply, grids and storage, seeking to optimise the whole system, instead of optimising subsystems on their own.
The approach is based on a least-cost modelling of the power system, along with the production and distribution of low-carbon fuels, such as green methanol, green hydrogen, e-fuels and so on.
The demand-side modelling allows for flexible methodologies for the different end-use sectors, with “soft links” to the power and low-carbon fuel optimisation model.
The models are constrained to ensure that China’s dual-carbon goals are met. In other words, the energy system’s carbon dioxide (CO2) emissions peak before 2030 and reach net-zero before 2060.
Other assumptions built into the models include a moderate economic growth rate and a shift in China’s economic structure to focus more on high-quality products and services instead of heavy industry, which has much higher energy consumption per unit of economic output.
Pathway to achieving ‘dual-carbon’ targets
The analyses for both scenarios in CETO24 confirm that China’s energy system can achieve net-zero carbon emissions before 2060, paving the way to make Chinese society as a whole carbon neutral before 2060.
Shown in the figures below, in both scenarios, primary energy consumption peaks before 2035 and declines thereafter, despite the assumption that China’s economy will grow between 3.3 to 3.6 times its 2020 level in the period until 2060.
Both scenarios underscore the importance of energy conservation and efficiency as prerequisites for energy transition.
This is because without effective energy conservation, China’s energy transition would demand significantly greater deployment of clean energy sources, making it difficult to achieve the necessary pace to hit the dual-carbon targets.
Sustained electrification drives carbon neutrality
In order to reach carbon neutrality, CETO24 suggests that the use of fossil fuels in the end-use sectors should be substituted by clean electricity as much as possible.
Furthermore, electricity should also be used to produce synthetic fuels or heat supply to satisfy end-use demands for energy.
In 2023, China’s electrification rate was around 28%. The report’s figures, illustrated below, show that electricity (light blue) accounts for as much as 79%-84% of the total end-use energy demand in 2060.
In both scenarios, the transportation sector is expected to experience the fastest growth in electrification, while the building sector achieves the highest overall electrification rate.
Some fossil-fuel-based fuels would still be needed to support certain industries, such as freight transport and aviation, by 2060.
Nevertheless, both scenarios indicate that China’s end-use energy demand would peak before 2035, followed by a gradual decline, with the 2060 value being roughly 30% lower than the peak.
(It is important to note that end-use energy demand is not the same as useful energy services, such as warmer buildings or the movement of vehicles. The replacement of fossil fuels by electricity results in a more efficient use of energy in the end-use sectors, since the losses of energy from burning fossil fuels are removed. Hence, it is possible to reduce final energy consumption even as demand for energy services rises.)
The short-term growth in the end-use energy demand is due to the rapid increase in electricity demand.
As shown in the graphs below, the share of electricity demand from traditional end-use sectors (blue) – mainly from industry, buildings and transport – would decrease from 89% in 2022 to 68%-72% by 2060.
In contrast, an increasing share of electricity is expected to be used for new types of demand such as for hydrogen production (light green), electric district heating (pink) and synthetic fuel production (dark blue).
Building a power system centred on wind and solar
CETO24 finds that decarbonising the energy supply is a lynchpin of energy transformation – and replacing fossil fuel power with non-fossil sources is the top priority.
In 2023, non-fossil sources comprised 53.9% of China’s power capacity. In the report’s scenarios, as shown in the figures below, the total installed power generation capacity could reach between 10,530GW and 11,820GW by 2060 – about four times the 2023 level.
The installed capacity of renewable energy sources – including solar (yellow) and wind (blue) – would account for about 96% of the total in 2060.
The installed capacity of nuclear power (dark pink) and pumped storage power (in hydro, dark blue) could reach 180GW and 380GW, respectively. Bioenergy with carbon capture and storage (BECCS) (dark green) would have an installed capacity of more than 130GW.
In addition to dominating installed capacity, wind and solar could account for as much as 94% of China’s electricity generation by 2060, as shown in the figure below.
Energy transformation in China adheres to the principle of “construction new before destruct old” (先立后破). (The principle is also translated as “build before breaking”. See Carbon Brief’s articles from 2021 and 2022 for background.)
As new low-carbon energy capacity grows and power system control capabilities gradually improve, coal power will gradually shift to a regulating and backup power source, with older and less efficient capacity being decommissioned as it reaches the end of its life.
Building an intelligent power grid
The construction of a new power system is a core component of China’s energy transformation.
CETO24 suggests that a coordinated nationwide approach would be the most efficient way to facilitate this. It would integrate all resources – generation, grid, demand, storage and hydrogen – to create a power grid that enables large-scale interconnection as well as lower-level balancing.
This coordinated nationwide approach would involve three key elements.
First, an optimised electricity grid layout, with the completion of the national network of key transmission lines by 2035, enabling west-to-east and north-to-south power transmission, with provinces able to send power to each other. By using digital and intelligent technologies, the grid would be able to adapt flexibly to changes in power supply and demand.
By 2060 in both of CETO24’s scenarios, the total scale of electricity exports from the north-west, north-east and north China regions would increase by 140% to 150% compared to 2022 levels.
Second, this approach would see continuous improvements in the construction of local electricity distribution grids, allowing them to adapt to large-scale inputs of distributed “new energy” sources such as rooftop solar.
As part of this element, China would need to promote the transformation of distribution grids from a unidirectional system into a two-way interactive system. It would also need to focus on providing and promoting local consumption of renewable energy sources for industrial, agricultural, commercial and residential use.
The creation of numerous zero-carbon distribution grid hubs would be needed to provide strong support for the development of more than 5,000 GW of distributed wind and solar energy, which is a feature of CETO24’s modelled pathways.
Third, the multiple energy networks would need to be combined, fully integrating power, heat and transportation systems. This would create a new-type energy network where electricity and hydrogen, in particular, serve as key hubs.
Under both scenarios, the scale of green hydrogen production and use could reach 340-420m tonnes of coal equivalent (Mtce) by 2060. Hydrogen and e-fuel production through electrolysis would become an important means to support grid load balancing – using excess supply to run electrolysers – and to facilitate seasonal grid balancing, with stored hydrogen being used to generate power when needed.
Battery energy storage capacity could reach 240-280GW and the number of electric vehicles could reach 480-540m, with “vehicle-to-grid” interaction capacity reaching 810-900GW, providing real-time responsiveness to the power system.
Innovation and market forces for energy transition
The development of “new productive forces” is a distinctive feature of China’s energy transformation.
Low-carbon, zero-carbon and negative-carbon technologies, equipment and industries, such as electric arc furnaces for steel production, hydrogen-based steelmaking furnaces, high-efficiency heat-pump heating systems, among others, offer broad market potential and present significant investment opportunities.
From the perspective of energy equipment demand, the scenarios show that by 2060 China’s installed wind and solar power capacity would reach approximately 10,000GW.
In the scenarios, the annual investment demand for wind and solar power equipment in China would grow from approximately two trillion yuan ($270bn) per year in 2023 to around six trillion yuan ($820bn) per year by 2060, with cumulative investment needs over the next 30 years exceeding 160tn yuan ($22tn).
The energy transformation will also require China to update or retrofit energy-using equipment across various sectors over the next 30 years, including industry, buildings and transportation.
While playing a smaller part than electrification and efficiency, CETO24’s modelling also points to an essential role for technologies such as carbon capture and storage (CCS) and industrial CO2 recycling, if China is to reach carbon neutrality.
In order for these technologies to be deployed at scale on the timelines needed, more and greater research and planning would need to begin now.
If it is to contribute to the dual-carbon goals over the next 30 years, China’s energy system will need to enter an accelerated phase of equipment upgrades and retrofits, with the scale of demand for such improvements continuing to grow, providing a sustained driving force for economic growth.
Strengthening international cooperation on energy transformation would also help China and other countries reduce the manufacturing, service and usage costs of new energy transformation technologies, enabling both China and the world to achieve carbon neutrality sooner and at lower cost.
Last but not least, a complete legal system for energy is likely to be a key requirement for a successful energy transition. China’s new energy law came into force in the beginning of 2025. More reforms in the legal system, carbon pricing, as well as data management would add significant support to energy transition.
Focusing on enabling forces
In summary, CETO24 demonstrates that there are technically feasible solutions for China’s energy transformation. However, it is still a long-term and challenging societal project.
China would need to reach peak carbon emissions by the end of this decade and then cut them to net-zero within 30 years, far more quickly than the trajectories envisaged by developed economies.
In order to be successful, policymakers will need to face the challenges head-on, find solutions and seek clarity amid uncertainty, to ensure that China’s energy transformation stays on track and progresses steadily.
Our research suggests their solutions could aim to address five areas: electrify energy consumption and improve energy efficiency; decarbonise energy supply; enhance interaction between energy supply and demand; industrialise energy technologies; and modernise energy governance.
At the same time, strengthening international cooperation on energy transformation and exploring pathways together with the global community would allow China to both ensure the smooth progression of its own energy transformation and contribute significantly to the global effort.
The post Guest post: China will need 10,000GW of wind and solar by 2060 appeared first on Carbon Brief.
Guest post: China will need 10,000GW of wind and solar by 2060
Climate Change
DeBriefed 3 July 2026: US faces scorching Independence Day | Record ocean temperatures | Vietnam’s EV surge
Welcome to Carbon Brief’s DeBriefed.
An essential guide to the week’s key developments relating to climate change.
This week
Heating up
NOT FREE FROM HEAT: “Dangerous, record-breaking” heat altered plans for 4 July celebrations across the US this weekend, reported the Associated Press. New York and Boston hit 100F (37.8C) on Thursday, said the newswire. CNBC reported that temperatures of up to 105F (40.5C) are forecast in central and eastern parts of the country, with “daily, monthly and all-time records possible”.
TEMPERATURES SOAR: Heat that hit western Europe last week spread east to “scorch” Germany, Hungary, Romania, Poland and others, said Bloomberg. Red warnings for extreme heat were issued in a number of nations, noted the outlet, adding that the heat “underscores how climate change is transforming summers in the world’s fastest-warming continent”. The Independent said last month was confirmed to be England’s hottest June on record.
HEAT DEATHS: June’s extreme temperatures caused more than 2,000 excess deaths in Spain and France, reported the Guardian. The countries are bracing for further heat that “could bring temperatures of 44C (111F) over the coming days”, said the newspaper. Deaths in France rose almost 30% at the heatwave “peak” on the week of 22 June, according to Le Monde. Last week’s conditions also led to around 480 excess deaths in the Netherlands, reported Reuters.
BOILING: Global ocean temperatures reached record levels for this time of year, reported NBC News, “fuelling fears of more dangerous heatwaves this summer and fanning concerns over the escalating global climate crisis”. Scientists told the Financial Times that this could lead the world towards “uncharted territory”. The newspaper said global average sea surface temperatures reached 20.96C on 21 June, exceeding June records for 2023 and 2024.
Around the world
- GOAL DROPPED: The World Bank will “abandon” its goal to devote 45% of annual lending resources to climate-related projects, reported Reuters. Carbon Brief explored what it could mean for global climate action.
- FIVE-YEAR PLAN: China plans to invest more than 20tn yuan ($2.9tn) in “key energy projects and new business models” over the next five years, according to International Energy Net.
- DRILLING: The Guardian said UK Labour politicians “urged” the likely next prime minister Andy Burnham to ignore “deluded” calls to develop the Rosebank oil field located in the Atlantic north of Scotland.
- PLASTIC TALKS: Countries and activists feared key issues could be sidelined at “critical” talks on a global treaty to curb plastic pollution in Kenya, said Climate Home News. A treaty could have “important implications” for climate change, reported Carbon Brief in 2024.
- CANADA PIPELINE: Canadian prime minister Mark Carney announced plans to build an oil pipeline to supply Asia with up to 1m barrels per day, reported the Financial Times. Earlier this week, Carney called the previous government’s climate plans “expensive” and “divisive”, said CBC News.
63
The number of UK newspaper editorials calling for more oil and gas extraction in the North Sea so far in 2026, according to Carbon Brief analysis.
Latest climate research
- Including emissions from permafrost thaw raises the likelihood of the Arctic becoming a net-carbon source by more than 50% at 2C of warming | Earth System Dynamics
- Net-zero scenarios relying less on carbon dioxide removals lead to fewer residual emissions, which offers greater health improvements for “non-white and low-income groups” in particular | Nature Climate Change
- Agricultural plots of land in sub-Saharan Africa owned by women face heat impacts 2-2.5 times higher than those owned by men | Nature Sustainability
(For more, see Carbon Brief’s in-depth daily summaries of the top climate news stories on Monday, Tuesday, Wednesday, Thursday and Friday.)
Captured
Wind and solar were the world’s largest source of new energy in 2025, according to Carbon Brief analysis of the latest Energy Institute statistical review of world energy. Wind and solar also saw the fastest growth, up by 18% in 2025. Nevertheless, every source of energy – including coal, oil, gas, nuclear and hydro – also reached global all-time highs last year.
Spotlight
Vietnam’s EV surge
Carbon Brief explores the reasons behind soaring electric-vehicle sales in Vietnam.
Motorbikes are a constant fixture on streets across Vietnam. They pollute the air in cities and make crossing the road a feat of endurance.
But, increasingly, people are moving away from petrol-powered vehicles to save money and reduce air pollution.
Sales of electric motorbikes, scooters and mopeds more than doubled in Vietnam last year, according to a recent report from the International Energy Agency (IEA).
This identified that Vietnam has the largest electric vehicle (EV) market in south-east Asia.
Nearly one-in-five of the two-wheeled vehicles sold last year were electric, it noted, in a nation with 102 million people and 77m motorbikes.
This is “particularly impactful” given they are the main mode of transport in Vietnam, said Lam Pham, Asia energy analyst at thinktank Ember. He told Carbon Brief:
“Electrifying road transport is essential for Vietnam to achieve its net-zero target by 2050. Road transport accounted for around 86% of transport-sector emissions in 2022.”
The nation has just 6.8m cars, but this number is also climbing, partly due to EVs, with nearly 40% of new car sales being electric.
This is “above levels seen in most European countries”, noted the IEA. (The UK’s figure is around 30%.)
EV incentives
Fuel costs surged in south-east Asian countries earlier this year after the energy crisis caused by the US-Israel war on Iran.
This “accelerated” discussions from “why use EVs” to “why keep paying more for fuel”, said Dr Tham Nguyen, a lecturer at the Ho Chi Minh City campus of Australia’s Royal Melbourne Institute of Technology (RMIT) University, who has researched Vietnamese public attitudes to EVs.
But the surge is “not driven by fuel prices alone”, noted Pham.
Increased EV sales can also be attributed to a “convergence of affordability, convenience and sustainability”, Nguyen said:
“Vietnamese consumers buy EVs because they see real value with immediate personal benefits, such as cost savings and energy security, alongside long-term environmental gains.”
Government policies have also incentivised sales through registration fee exemptions and tax cuts for EVs.
Another factor is affordable EVs sold by Chinese companies and Vinfast, a Vietnamese manufacturer. The IEA report noted that Vietnam is the only country in south-east Asia with “sizeable” domestic production of accessible EVs.
Vinfast reported a 219% year-on-year increase in orders for electric motorbikes and e-bikes in the first quarter of 2026, but the company has yet to turn a profit.
Pham noted that “growing public awareness of air pollution” has also “dramatically strengthened” public support for EVs.
Future plans
Vietnam’s major cities also have plans to get drivers to go electric or turn to public transport.
The capital city Hanoi announced that it would ban fossil-fuel-powered motorbikes from a central zone this month, but this has been postponed until 2028.
Ho Chi Minh City, the nation’s largest city with more than 9.5 million people, intends to introduce low-emission zones and swap 400,000 petrol-powered motorbikes to electric by 2028.
The city’s green transport plans focus on metro lines, electric buses and e-bikes, explained RMIT associate professor Catherine Earl. She noted that walking and cycling are currently “not popular, accessible or safe for many residents in Ho Chi Minh City’s hot and humid climate”.
Looking ahead, Pham said Vietnam could focus on “purchase subsidies, financing schemes and adequate charging or battery-swapping infrastructure, to ensure lower-income riders, including delivery and ride-hailing drivers, are not negatively affected”.
Watch, read, listen
‘JUST 1%’ OF EMISSIONS: The Guardian debunked arguments that climate actions from smaller countries are “insignificant”.
DRILLING RISKS: Mongabay reported on the possible impacts oil drilling in the Amazon could have on a “little-known reef”.
HEATING UP: The BBC Climate Question podcast discussed the weather pattern El Niño and its links to climate change.
Coming up
- 7-10 July: AI for good global summit, Geneva, Switzerland
- 7-15 July: UN high-level political forum on sustainable development, New York
- 8-10 July: Ninth meeting of the board of the fund for responding to loss and damage, Manila, Philippines
Pick of the jobs
- Green Alliance, senior partnerships officer | Salary: £42,748-£47,346. Location: London
- World Vision, environment and climate action senior adviser | Salary: Unknown. Location: Kenya
- Nature Energy, interim associate or senior editor | Salary: Unknown. Location: London or Milan
- Climate Analytics, senior communications manager – climate policy (maternity cover) | Salary €60,605-€66,880. Location: Berlin
- Carbon Exchange, researcher | Salary: Unknown. Location: Hong Kong
DeBriefed is edited by Daisy Dunne. Please send any tips or feedback to debriefed@carbonbrief.org.
This is an online version of Carbon Brief’s weekly DeBriefed email newsletter. Subscribe for free here.
The post DeBriefed 3 July 2026: US faces scorching Independence Day | Record ocean temperatures | Vietnam’s EV surge appeared first on Carbon Brief.
The World Bank has abandoned a target for 45% of the funding it gives developing countries to be “climate finance”, following months of pressure from the Trump administration in the US.
However, a concerted effort by developed- and developing-country shareholders has seen the bank hold onto its “action plan” for tackling climate change.
The multilateral development bank (MDB) – which is headquartered in Washington DC – is the single largest provider of climate finance globally, distributing $39.2bn in 2025 alone, primarily as loans.
Amid widespread aid cuts by developed countries, the World Bank and other MDBs have previously pledged to significantly scale up their climate finance over the next decade.
Despite scrapping its central target, the bank says it will continue to support the demands of its “clients”, many of which have explicitly stated their need for climate-related investment.
Here, Carbon Brief looks at the likely impact of the World Bank’s policy shift and whether it is – as one expert puts it – “mostly a symbolic victory” for the US.
- How does the World Bank support climate action?
- Why has the World Bank abandoned its climate-finance target?
- Why is the World Bank important for international climate finance?
- How will these changes affect global climate action?
How does the World Bank support climate action?
The World Bank is the oldest and largest MDB. It is tasked by its 189 member governments – the bank’s shareholders – with supporting development projects around the world.
The US is the bank’s largest shareholder, followed, in order, by Japan, China, Germany, France and the UK.
Every year, the bank provides billions of dollars – predominantly as loans – to developing countries.
(One part of the World Bank, the International Development Association – IDA – specifically distributes grants to lower-income nations, as well as lower-interest loans.)
Through its financing, the World Bank also has an important role in “mobilising” private investments in developing countries.
In recent years, the bank has increasingly focused on helping developing countries to cut emissions and adapt their economies for climate change.
The World Bank provided $164bn in what it calls financing with climate “co-benefits” between 2020 and 2025.
The largest share of this funding – roughly one-fifth – went to clean energy and electricity access projects. Smaller shares went to areas such as public transport, water supply and sustainable farming.
As the map below shows, the largest recipients of the bank’s climate funds since 2020 have been emerging economies, such as Turkey ($10.3bn), India ($9bn) and Nigeria ($6.3bn).
Among the largest World Bank projects in recent years are two extensive programmes in India, totalling nearly $3bn, supporting renewables and green hydrogen.
Others include $1.7bn for a Pakistan hydropower project, $926m for Iraq’s railways and $803m to boost “green development” in Colombia.
Despite the bank’s major role in providing climate finance to developing countries, it has faced heavy scrutiny from climate advocates.
In particular, they have noted the dominance of loans that push developing countries further into debt. The World Bank has also been criticised for a lack of transparency around how it classifies projects as “climate-related”, as well as “over-reporting” of climate finance.
Why has the World Bank abandoned its climate-finance target?
When World Bank president Ajay Banga – nominated by former US president Joe Biden – took over the institution in 2023, there were widespread calls for MDB reform.
Many of the bank’s shareholders wanted to see billions more dollars being channelled to support climate action. Later that year, Banga announced that the bank would ensure that 45% of the bank’s funding was climate finance by 2025.
This replaced an existing target of 35% for climate finance between 2021 and 2025, which had been set out in the bank’s second climate change action plan (CCAP).
The CCAP is intended to “mainstream” climate action in the bank’s work. With it in place, the World Bank’s climate finance more than doubled from $17.2bn in 2020 to $39.2bn in 2025.
As the chart below shows, this meant the World Bank exceeded its 2025 goal, with climate-related projects making up a 48% share of total funding that year.
When Biden was replaced by Donald Trump as president in 2025, the US administration turned against international cooperation, including climate finance.
However, the US did not walk away from the World Bank, where it exerts considerable power as the largest shareholder.
With the CCAP due to expire in July 2026, the US has spent months pressuring the bank and its shareholders to weaken or abandon the plan altogether.
US Treasury secretary Scott Bessent issued a statement during the 2026 World Bank and International Monetary Fund (IMF) spring meetings in April 2026, in which he called for “jettisoning” the 45% climate-finance target. More broadly, he said:
“We welcome the coming expiration of the CCAP and…expect the bank to immediately shift its myopic focus on climate and financing volumes to one that emphasises high-quality, durable projects.”
This vision involves a push for the World Bank to finance more fossil-fuel projects, including drilling for new gas. (The bank has committed since 2019 to stop funding upstream oil and gas projects.)
The decision on whether to continue with the CCAP was negotiated behind closed doors by the board of directors – representing national shareholders. There were reports of “deep divides”.
A joint statement from 19 of the 25 directors last year affirmed the need for both a plan and a target. The US, Russia, Kuwait and Saudi Arabia all declined to sign up, while Japan and India abstained, according to Reuters.
There were reports of European nations championing a climate plan, bolstered by support from the developing countries that would stand to receive climate finance. The US call to drop the 45% target entirely was reportedly backed by Saudi Arabia and Russia.
Ultimately, the day before the CCAP was due to lapse, the World Bank announced what appeared to be a middle ground. It would drop both the 45% target and the 35% goal it had replaced, while also “extend[ing]” the CCAP.
UK development minister Jenny Chapman told a committee hearing in the House of Commons the next day that this marked a “compromise”. She said:
“It wasn’t clear we were going to get a CCAP at all and a bank without an action plan on climate is a problem for us – so that’s a good outcome.”
Supportive shareholders had been pushing for a one-year extension of the plan. While the World Bank did not initially define the length, Chapman confirmed on LinkedIn that the plan had, in fact, been extended “indefinitely”.
The bank said it would also engage an “independent evaluation group” to assess the CCAP, in line with a board request.
Gaia Larsen, director of climate finance at the World Resources Institute (WRI), tells Carbon Brief that this evaluation will likely be “relatively free from political ideology” and could be “focused on how to make the CCAP more effective”.
Why is the World Bank important for international climate finance?
Under the Paris Agreement, developed countries – including major World Bank shareholders in Europe and elsewhere – are obliged to provide climate finance for developing countries.
This includes a target of $300bn a year by 2035, which is expected to largely come from developed countries. One significant way these nations can contribute to this goal is via their support for MDBs, particularly the World Bank.
The World Bank has described itself as “by far the largest provider of climate finance to developing countries”. Each year, it oversees half of all climate finance from MDBs and far more than any single donor country.
Many developed countries have, therefore, enthusiastically backed the World Bank’s climate efforts, as well as a “bigger” role for MDBs in development more broadly. The bank can lend sums that far exceed the amount of new public finance that individual nations are willing to commit.
This is particularly significant, given many of these nations, including the UK, Germany and France, have announced large cuts to their aid budgets in recent years.
Carbon Brief analysis suggests that roughly a fifth of the international climate finance provided and “mobilised” by developed countries in recent years can be attributed to their World Bank contributions, as the chart below shows.
(This only accounts for the World Bank financing that can be linked to developed-country shares in the bank. Developing countries, such as China, also have significant shares, which are not included in the chart below.)
MDBs – including the World Bank – have committed to providing $120bn in climate finance to developing countries by 2030.
This was set to come from greater shareholder contributions, combined with a programme of reforms to free up capital.
If the World Bank continued to provide half of the MDB total, it would need to increase its climate finance by around 50%, from $39.2bn today to $60bn in 2030.
Therefore, experts see a “key” role for the World Bank in achieving not only the $300bn target, but also the more aspirational $1.3n target that countries agreed as part of the “new collective quantified goal” (NCQG) on climate finance at COP29 in 2024. This includes the private capital it could “unlock” through its lending.
Joe Thwaites, international climate finance director at Natural Resources Defense Council (NRDC), tells Carbon Brief that these “NCQG politics” are “quite important”. He says:
“The maths of the $300bn does not work if the MDBs pull back and so I think that’s why you’re seeing developed countries taking a stand.”
How will these changes affect global climate action?
To date, the World Bank has only released minimal details about its new climate plans. As such, experts say the impact on future climate finance remains uncertain.
Jon Sward, environment project manager at the Bretton Woods Project, tells Carbon Brief:
“They have said they are going to retain all the same processes about climate-finance reporting. So, of course, there is a world in which, actually, climate finance continues to increase like it has been.”
Some of the World Bank’s internal organisations will, in fact, keep their climate-finance goals for the time being. For example, the IDA’s largely grant-based funding retains a 45% target for its current round, which will last until 2028 – the year of the next US presidential election.
However, WRI’s Larsen tells Carbon Brief that the changes, from a bank that was previously a “champion for climate action”, remain significant:
“This reality, reinforced by the elimination of the 45% goal, means that it would not be surprising to see a reduction in climate investments.”
In a statement, the World Bank said its “work on climate is and will remain firmly client driven”, noting that it supports nations undertaking their Paris Agreement climate plans.
Therefore, its climate focus may come down to whether there is demand for climate action from “client” countries receiving finance.
At an April event in discussion with the climate sceptic Bjørn Lomborg, Bessent said that global financial institutions should focus on growth, characterising climate action as an “elite belief”.
The implication from the US Treasury secretary was that recipient countries are not interested in climate action. However, as reported by Devex, a group of World Bank shareholders representing nearly 100 developing countries, wrote a letter that appeared to push back against this framing.
This “G11+” group, led by Brazil and China, said the bank “must remain firmly client-driven”, noting that countries are “following nationally determined pathways toward climate action”. NRDC’s Thwaites tells Carbon Brief:
“It’s one thing for the Europeans to talk about climate…This was the client countries [100 developing countries] saying: ‘No, we want this.’”
Recent research by the ODI thinktank found that 79% of developing-country officials polled wanted to see MDB investment in solar projects, 54% wanted hydropower and 47% wanted wind power. Only 13% wanted investment in gas-power plants.
Rishikesh Ram Bhandary, a senior development researcher at Boston University, has stressed the need for an “enhanced CCAP”, which could be supported by the bank’s new independent evaluation. Among other things, he tells Carbon Brief:
“The bank needs to make a more convincing case about how climate change is being integrated into development priorities rather than competing with them.”
Thwaites says he is hopeful that the outcome is “mostly a symbolic victory for the US”.
However, he says major shareholders from Europe and elsewhere should make it clear to the bank that it is not “the only game in town” when it comes to climate finance. He says:
“If [the World Bank] are going to cave into one shareholder, when the vast majority of the other shareholders are supportive of continuing climate action, they can take their money elsewhere.”
The post Q&A: How will the World Bank’s abandoned finance goal affect climate action? appeared first on Carbon Brief.
Q&A: How will the World Bank’s abandoned finance goal affect climate action?
Rich Wilson is CEO of the Iswe Foundation and co-founder of the Global Citizens’ Assembly.
The numbers are stark. According to the 2026 Global Report on Food Crises, 266 million people across 47 countries experienced high levels of acute food insecurity last year, nearly double the figure recorded a decade ago.
Meanwhile, disruptions to oil, gas and fertiliser flows through the Strait of Hormuz drove a 46% month-on-month spike in urea prices early this year, sending agricultural price indices up 8% and raising the spectre of a global affordability crisis.
This is not a blip. It is a new baseline. The EAT-Lancet Commission concluded that food systems now account for roughly 30% of total greenhouse gas emissions and are the largest single contributor to the climate crisis. The science has been clear for years.
Now some of the solutions to the problem are becoming socially acceptable too.
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Earlier this year, people from more than 60 countries and territories, selected not by vested interest, but by lottery, spent seven weeks examining the evidence on food and climate for the latest Global Citizens’ Assembly. They heard from scientists, farmers and industry. They worked through 42 hours of structured deliberation, engaging with some difficult trade-offs.
They were not asked to endorse a predetermined conclusion. They were asked an open question: what changes, if any, should we make to how we grow, share and eat food, so that everyone has enough to nourish themselves while tackling the causes and impacts of climate change?
Phase down industrial animal farming
Their answer was unambiguous. They voted to protect forests. They voted to phase down industrial animal food production. They voted for supply chain reform and corporate accountability, explicitly rejecting the idea that the burden of change should fall on individual consumers. All 22 of their Calls to Action passed with over 85% support, a super-majority of randomly selected people from every region of the world, in agreement.
Consider what the assembly was actually being asked to decide. Industrial animal food production is the primary driver of tropical deforestation. Protecting more land as forest and ecosystem means less land available for the expansion of industrial production. That is a real trade-off, with real consequences for real livelihoods. Politicians have spent years avoiding it.
These randomly selected people looked at the evidence, deliberated across time zones and cultures, and chose the forests, with 64% in strong support and a further 20% in favour. People from livestock farming communities voted for change. Not because they were told to. Because deliberation led them there.
We estimate there have now been more than 7,000 citizen participation initiatives worldwide in the last decade. They have been organised because, as our 2025 report: People in the Lead demonstrated, people are now consistently and significantly ahead of politicians on issues ranging from climate to AI governance.
The people know best
What the research consistently shows is that ordinary people, given proper evidence and time, produce recommendations that are more effective and more aligned with public values than what emerges from elected legislatures. The gap in global governance is no longer primarily between science and the public. It is between citizens and their political leaders.
That gap matters for more than procedural reasons. When policy treats people as passive recipients rather than active participants, it leaves out the very actors whose behaviour, trust and consent the transition depends on. Institutions that speak only to other institutions, and negotiate only with state actors and industry lobbies, are missing out on the trust and energy of the people they are supposed to serve.
Governments, left to their own devices, are not moving fast enough to prove that argument wrong. At COP30 in Belém last November, countries failed to agree on a fossil fuel phaseout roadmap, and even full implementation of every submitted national climate plan still leaves the world on course for 2.3 to 2.8C of warming.
Citizens’ track at COP
But the Brazilian presidency grasped something important. Among the conference’s more significant outcomes was the formal launch of a Citizens’ Track within the UNFCCC process, a mechanism for connecting the global participation field to intergovernmental climate negotiations. Türkiye and Australia, who together hold the COP31 presidency in Antalya this November, now have the opportunity to strengthen and institutionalise what Brazil began.
In Guatemala, Indigenous women build climate resilience with old and new farming methods
The question before us is no longer whether citizens can contribute to solving these problems. Across the world, in local food networks, in community assemblies and in participatory planning processes, they already are, quietly generating more ambitious and more legitimate solutions than those emerging from formal diplomatic channels.
What is required now is the political courage to connect people to power. Not to consult citizens and file the results. Not to invite them to observe while the real decisions are made elsewhere. But to recognise the public as partners in perhaps the most consequential governance challenge of our time.
The post As food shocks spread, citizens are showing more leadership than governments appeared first on Climate Home News.
As food shocks spread, citizens are showing more leadership than governments
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