Financing Responses to Climate Migration: The Unique Role of Multilateral Development Banks
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Highlights
Multilateral development banks are uniquely positioned to finance climate migration responses but must build knowledge, data, and partnerships to act effectively at scale.
- Climate change drives internal displacement and circular migration far more than permanent emigration; most affected people move to cities or stay immobile due to resource constraints.
- Multilateral development banks (MDBs) can fund climate-resilient infrastructure—housing, water, and schools—in host communities, but grant financing is needed since governments rarely borrow for non-national beneficiaries.
- Livelihood investments work best when benefits are status-blind, reaching both migrants and host-community residents; targeting migrants exclusively risks social tension and political backlash.
- MDBs should review existing portfolios for climate-migration links, share data and modeling, and provide upstream technical assistance to client governments.
As climate change increasingly contributes to migration and displacement in many parts of the world, there is a pressing need for measures that build resilience and prevent displacement as well as those that help climate-affected people move to safety and support receiving communities. Multilateral development banks (MDBs) are critical, if sometimes overlooked, players because of their ability to invest in large-scale projects that contribute to sustainable development, primarily in low- and middle-income countries.
This report explores the unique role of MDBs in the climate finance landscape and highlights opportunities for migration, humanitarian, and other key actors to partner with them on projects that effectively target climate-related migration and displacement. After reviewing the evidence on the complex linkages between climate and mobility, the report examines MDBs’ climate-related work to date, challenges they face to scaling up these efforts, and strategies to begin to address hurdles. These recommendations include learning from past MDB investments that have touched on climate migration, funding data collection or sharing to strengthen understanding of climate migration trends, and developing partnerships to support policy and project development, financing, and implementation.
Table of Contents
1 Introduction
2 Reviewing the Evidence on Climate Change, Migration, and Displacement
A. Why Do People Move?
B. How Do People Move?
3 Challenges to MDB Financing for Climate Migration Projects
A. A Need for More Context-Specific Data and Knowledge
B. Limited National Policy Frameworks and Client Demand
C. A Dearth of Concessional Financing and Grant Funding
D. Underdeveloped Internal Coordination and Capacity
4 Prevention: Targeting Climate Displacement Hotspots
A. The What: Investments to Reduce Exposure to Climate Impacts
B. The How: Technical and Financial Tools
5 Preparedness: Supporting Host Communities, Migrants, and Displaced People
A. Building Migrant-Inclusive, Climate-Resilient Infrastructure
B. Enhancing Private-Sector Development and Livelihood Opportunities
6 Conclusions
About the Global Program
The Global Program bridges policy advice, research, and candid dialogue to design effective migration policies, drawing on global evidence and anticipating the forces reshaping how people move.
