The World Bank has officially expanded its mission to include climate change, while pushing ahead with reforms that could unlock additional funding and cheaper loans for green projects.
In his first major speech since taking office, President Ajay Banga said a set of measures to stretch its balance sheet could allow the bank to increase lending by up to $15.7 billion a year.
The extra funding would support the implementation of the bank’s new vision statement approved by its governing body on Thursday.
The historical objective to “end poverty” should now be achieved “on a livable planet”. The new mission will give the lender the formal mandate to tackle a whole range of global challenges, among which climate change is seen as the most urgent one.
Banga said this will widen the aperture through which the bank looks at its task in the future. “If you can’t breathe and cannot drink clean water, there is little point in eradicating poverty,” he added.
Year-long reforms
Announced at the lender’s annual meetings in Marrakech, Morocco, the changes come a year after a group of its biggest shareholders, led by the United States and Germany, called for its fundamental shake-up to deliver more climate finance.
The overhaul quickly picked up pace. Former chief David Malpass resigned early, after sparking an outcry with climate sceptic comments, and was replaced by Banga, a former Mastercard CEO, who promised far-reaching reforms.
Banga is seeking to create a “better and bigger” bank capable of plugging a few more of the huge gaps in the provision of climate finance to developing countries.
But a lack of appetite to inject fresh funds into its coffers directed the focus on financial tweaks to make the existing capital go further. The reforms mainly concern the International Bank for Reconstruction and Development (IBRD), the lending arm for middle-income countries.
Accounting tweaks
The first concrete step came in April when the bank lowered its equity-to-loan ratio from 20% to 19%, freeing up $4 billion a year.
The lender is also creating a programme of guarantees backed by shareholders, which would step in to cover potential losses if borrowers cannot repay their loans. The measure would offload some of the risk currently shouldered by the World Bank to its donors, allowing the bank to channel those reserves into more new lending.
Another option under development is the launch of a hybrid capital mechanism, which allows shareholders to inject new funds by investing in special bonds issued by the World Bank.
US Treasury secretary Janet Yellen at the World Bank annual meetings in Marrakech. Photo: World Bank / Franz Mahr
Taken together, this suite of tools could boost the bank’s lending capacity by $157 billion over the next decade, Banga said on Friday.
He added that the plans have been “met with enthusiasm and generosity”. But, crucially, their potential will only be realised if shareholders fork out the money.
Saudi Arabia, Russia urge World Bank to keep funding fossil fuels
The US government favours the guarantees plan and wants Congress to approve $2.1 billion in new funding that could unlock $25 billion in new loans. Germany has become the first country to pledge 305 million euros ($321 million) of “hybrid capital”.
Cheaper energy loans
Another element of Banga’s blueprint is the extension to middle-income countries of the cheap loans that are currently exclusively offered to low-income ones. The concessional resources currently available “are insufficient to deliver on the new vision and mission”, a paper outlining the bank’s reforms said.
The rollout of clean energy in high-emitting countries is one of the primary areas the lender would be targeting with these measures.
“We’re investigating if we can reduce interest rates to incentivize exiting from coal as part of energy transitions,” said Banga, “and find ways to encourage a renewable energy transition by increasing concessional finance in the mix.”
Danny Scull, an analyst at E3G, said this is a welcome step as incentivising countries like India and Brazil to take out cheaper loans for climate action will benefit the whole world.
Amid all the optimism, the World Bank chief added words of caution on how far his organisation can go without external help.
An influential panel of experts commissioned by the G20 said in July that development banks need to triple their lending levels by 2030 if they want to make a serious dent in the trillions of dollars of climate finance needed by developing countries.
Appeals for more capital
“The World Bank is merely an instrument that reflects the ambition of our shareholders,” said Banga, “the progress we aspire to achieve requires our resources and capital to be commensurate with our vision.” In other words, governments need to inject more money into the bank to fulfill this new mission.
But support for a direct capital increase is limited. The UK is the only major Western country in favour of the idea, which is strongly championed by developing nations, China and India above all.
For the US and Japan – the bank’s biggest shareholders – these discussions prompt a headache. They would need to contribute most to a capital increase, if they are to avoid their percentage ownership of the bank being watered down, perhaps as the share of geopolitical rival China rises.
Private sector engagement
Among rich countries, the preferred solution is to get the private sector to stump up more money.
Banga agrees, saying the lender needs “the scale, resources, and ingenuity of the private sector”. But he also acknowledged that “meaningful, sustainable progress has evaded us” on that front.
To change that equation the World Bank has set up a forum with a group of CEOs from some of the world’s biggest companies.
Banga said the initiative is initially focused on increasing private investment in renewable energy and the energy transition in developing countries.
The post World Bank approves green reforms, appeals for more money appeared first on Climate Home News.
Climate Change
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Climate Change
Guest post: How a record-high ‘energy imbalance’ is driving global warming
The planet is heating up more quickly than ever before.
For decades, greenhouse gas emissions caused by human activity have been building up in the atmosphere and trapping ever-higher levels of heat.
The resulting asymmetry between incoming solar energy and energy radiated back out into space – known as “Earth’s energy imbalance” – provides a direct measure of the extent to which humans are disrupting the Earth’s climate system.
This imbalance is growing and in 2025 its 10-year average reached a record high, indicating that global temperatures could increase at even higher rates in the future.
This is among the headline findings of the latest “indicators of global climate change” (IGCC) report, published in the journal Earth System Science Data, which tracks changes in the climate system on an annual basis.
The report, now in its fourth iteration, has been produced by dozens of scientists from around the world.
Its findings are designed to fill the gap between Intergovernmental Panel on Climate Change (IPCC) science reports, which are published every 5-7 years.
In this article, we unpack the IGCC report, which explores how human activity is driving a growing energy imbalance and why monitoring systems to track global climate are so crucial.
(For more on previous IGCC reports, see Carbon Brief’s coverage in 2023, 2024 and 2025.)
Greenhouse gas emissions remain at an all-time high
Global greenhouse gas emissions are continuing to increase, mostly as a result of the use of fossil fuels. However, deforestation, agriculture and industrial processes also play an important role.
Over the most recent decade (2015-24), emissions stood at the equivalent of 54.6bn tonnes of carbon dioxide equivalent (GtCO2e) per year. In 2024, the most recent year for which we have complete data, emissions reached 56.8GtCO2e.
As the chart below shows, these emissions have pushed up atmospheric levels of CO2, methane and nitrous oxide. In 2025, concentrations of these gases reached 425.6 parts per million (ppm), 1936.3 parts per billion (ppb) and 339.4ppb, respectively.
This represents a rise of 3.8%, 3.8% and 2.2%, respectively, since the 2019 levels reported in the IPCC’s sixth assessment report (AR6).

At the same time, declines in emissions of aerosols such as sulphur dioxide, partly as a result of efforts to tackle air pollution, are increasing the Earth’s energy imbalance. This is because aerosols have a cooling effect on the Earth’s climate, counteracting warming from CO2 and other greenhouse gas emissions.
(Tackling sulphur dioxide, alongside other particulate emissions, remains critical because the immediate health and environmental damage they cause far outweighs their short-term cooling effect on the climate.)
The Earth’s energy imbalance is rising rapidly
The Earth’s energy imbalance has long been recognised as a key indicator of how the climate is being affected by human activities.
However, it is only in the last few decades that scientists have been able to record temperature changes deep enough in the ocean to accurately quantify it.
Earth’s energy imbalance measures how quickly excess heat is accumulating in every part of the Earth system, primarily in the ocean, but also in land, ice and atmosphere.
Through this accumulation of heat, the energy imbalance influences the rate of sea level rise and ice melt across the world, as well as increasing the frequency and intensity of extreme weather events, such as storms, floods and droughts.
Without human influence, the Earth’s energy imbalance would be close to zero.
But, as greenhouse gas emissions have built up in the atmosphere, the imbalance has been growing since the 1970s. Recent increases to Earth’s energy imbalance have outpaced those projections made by climate models — indicating the planet could see more warming than expected in the future.
As the right-hand chart below shows, the imbalance is now at a record high, having more than doubled over the past two decades.
It has increased by around 40% since 2019, from an average 0.79 watts per square metre (Wm2) over 2006-18, according to IPCC AR6, to 1.12Wm2 over 2013-25.
The left-hand chart shows how heat is accumulating in the ocean (blues), ice (grey), land (orange) and atmosphere (purple).

Global temperature rise
The excess heat building up in the climate system from the energy imbalance is pushing up global temperatures at a record rate of 0.27C per decade.
We estimate that human-induced warming – the amount of observed global surface
temperature increase attributable to both the direct and indirect effects of human activities – reached 1.37C in 2025. This has risen from 1.0C in 2017, as reported in IPCC AR6.
While natural variability in the climate system – such as El Niño or La Niña events – can also influence temperatures year-to-year, the upward temperature trend we are seeing is being driven by the persistent imbalance in energy.
We now expect global temperatures to exceed the Paris Agreement limit of 1.5C above pre-industrial levels around the year 2030.
This is significant because 1.5C has been identified as the critical dividing line between manageable climate risks and catastrophic, potentially irreversible damage to global ecosystems and human societies.
Heat accumulating throughout the Earth system
While heat is accumulating throughout the Earth system, it is not being distributed evenly around the globe.
Since the 1970s, around 90% of this heat has been taken up by the ocean, affecting marine ecosystems, ocean circulation patterns, sea level rise and climate extremes.
For example, the number of marine heatwave days – periods of unusually high sea surface temperatures – has more than tripled globally since the early 1990s. The year 2025 alone saw 65 days of marine heatwaves – meaning they occurred, on average, more than one day a week.
Meanwhile, the cryosphere – the portion of the Earth made up of frozen water, including glaciers, ice sheets and permafrost – is experiencing widespread ice loss and thawing in response to the growing energy imbalance. This affects ecosystems, sea level rise and infrastructure in polar and high-latitude regions.
Rapid warming has also resulted in record extreme temperatures over land, with average maximum temperatures for any single day over 2016-25 around 1.92C above pre-industrial levels). This is an increase of almost half a degree compared to the previous decade (2006-15).
Sea level rise and the energy imbalance
Sea level rise provides one of the clearest long-term signals of a changing planet.
It is closely linked to Earth’s energy imbalance. As heat accumulates in the ocean, water expands, raising sea levels. Meanwhile, a warming land and atmosphere means addition of water to the oceans through melting of glaciers and ice sheets, also adding to sea level rise.
Over the long-term, sea levels have been rising, on average, at a rate of around 1.8mm per year since 1901, totalling a record 23cm in 2025. This is increasing the risk of coastal flooding, erosion and habitat loss in many low-lying areas around the world.
This rise can be seen in the left-hand chart below, which shows observed global sea level changes from tide gauges (grey and blue dashed lines) and satellites (red dashed lines) since 1901. The solid lines indicate the average across multiple datasets.
Sea level rise is accelerating consistent with the observed increase in Earth’s energy imbalance. Over 2006-25, sea levels have risen at a rate of 3.67mm per year – more than double the rate of 1.69mm per year seen over 1976-95.
This increasing rate is shown in the right-hand figure below, which shows four successive overlapping 20-year periods and the most-recent decade.
(Last year’s transition from El Niño to weak La Niña conditions affected global rainfall patterns and led to a small and temporary fall in global average sea level in 2025. This explains the slight decrease in rate of sea level rise for the most recent decade, which is affected more than the 20-year period 2006-25.)

The bigger picture
Despite greenhouse gas emissions not increasing as rapidly as in the 2000s, this year’s IGCC findings continue to show how far and how fast the climate is changing due to human activity.
A significant increase in decarbonisation efforts in the second half of this decade is required to slow down the rate of human-caused warming and limit the escalation of climate risks and impacts.
These findings, like many others produced by scientists across the globe, rely on international expertise, partnership and the maintenance and availability of global climate datasets and the global observing programmes that underpin them.
This year’s edition of IGCC used more than 40 global datasets produced by research teams around the world, including the NASA satellite record of the Earth’s energy imbalance and the ARGO deep ocean float network.
However, a number of long-term monitoring programmes could be threatened by funding decisions made by governments around the world, most notably the Trump administration in the US.
Local meteorological data and weather balloon measurement programmes in many countries have declined in recent years, especially in Africa, the west Pacific and South America. This reduces scientists’ ability to monitor and understand key indicators of climate change.
This is not just an issue for climate science. Many of these observations are key to weather forecasts and systems that provide early warning for extreme weather. For example, media reports have suggested that recent reductions in weather balloon measurements in Alaska led to a lack of warnings for a recent winter storm.
The continuity and integrity of the climate observations that scientists use to understand how the climate is changing depends on effective and sustained coordination by international organisations, such as the Global Climate Observing System, the World Meteorological Organization and World Climate Research Programme.
Without this data and its coordination, future assessments will be much more difficult at a time when urgent climate action is needed.
The post Guest post: How a record-high ‘energy imbalance’ is driving global warming appeared first on Carbon Brief.
Guest post: How a record-high ‘energy imbalance’ is driving global warming
Climate Change
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