Correcting the World's Greatest Market Failure

The report argues that Multilateral Development Banks (MDBs) fail to systematically incorporate climate risk and emission mitigation into their strategies, with over 60 percent of energy sector financing ignoring climate change. It calls for MDBs to internalize environmental and social costs by measuring GHG emissions, revising country strategies, and increasing support for low-carbon technologies in emerging economies.

• Multilateral Development Banks (MDBs) have not systematically integrated opportunities to reduce climate risk or mitigate emissions into their project development and strategies, with more than 60 percent of energy sector financing failing to consider climate change.
• To address the market failure of climate change, MDBs must adopt several operational changes, including measuring GHG emissions across relevant sectors, revising guidelines for country and sector strategies to include climate variability and vulnerability, and increasing investment in low-carbon technologies for rapidly growing emerging economies.
• A previous World Resources Institute analysis conducted before the 2005 G8 Gleneagles Summit indicated that less than 20 percent of the World Bank's energy sector lending had considered climate change.

APA

World Resources Institute (n.d.). Correcting the World's Greatest Market Failure. https://www.wri.org/research/correcting-worlds-greatest-market-failure

Chicago

World Resources Institute. Correcting the World's Greatest Market Failure. n.d. https://www.wri.org/research/correcting-worlds-greatest-market-failure.

Wikipedia

{{cite report |author=World Resources Institute |title=Correcting the World's Greatest Market Failure |url=https://www.wri.org/research/correcting-worlds-greatest-market-failure |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{worldresourcesinstitutendcorrecting, author = {{World Resources Institute}}, title = {{Correcting the World's Greatest Market Failure}}, institution = {World Resources Institute}, url = {https://www.wri.org/research/correcting-worlds-greatest-market-failure}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }