Options Paper: Reducing Climate Risk in IDB Operations

This paper explores options to minimize threats posed to IDB-financed physical investments by the impacts of climate change. A large proportion of projects are implemented in climate-sensitive sectors (e.g., agriculture, water resources, and transport). In these cases, the norm is to consider historic climatic trends for guiding project conceptualization and design. However, there is growing realization among international development agencies including the IDB that this may not be sufficient; many multilateral and bilateral development agencies now recognize the need to also consider future changes in long-term trends of climatic variables, as well as the possibility of an intensification or increased frequency of extreme climatic events such as floods, droughts, and hurricanes.