World Bank President Jim Yong Kim says he is determined to make a difference in the world’s response to global warming. In a major report last year, the bank warned that the globally agreed-upon goal of limiting the planet’s temperature increase to 2 degrees Celsius was slipping away, and that the more likely 4-degree rise would devastate some countries and plunge more people into poverty.

But what can the bank do about it?

Are there things the World Bank can do to fight global warming besides funding hydroelectric power? (Reuters)

One emerging reaction is a return – in force – to the construction of large-scale hydroelectric plants in an effort to power up poorer African and Asian countries without boosting their use of fossil fuels to developed world levels. Beyond that, the bank is exploring a number of options. In recent interviews, Kim and Rachel Kyte, the bank’s vice president for sustainable development, discussed a number of options:

Carbon markets. Advocates of carbon trading as a way to reduce emissions have been dispirited by the collapse of Europe’s system. But Kim still sees the development of a global price for carbon as key. Kyte speaks of carbon as “one of the currencies of the 21st century,” and said the bank is exploring how it might patch together the many local and national carbon markets that are being developed. The general aim is to treat carbon as its own asset class – you pay to use it and reap rewards for saving it – and create systems so that, for example, timber companies or nations are compensated for extending forest cover, and farmers get paid for growing crops or adopting management techniques that bury greenhouse gases in the soil.

“The world needs a robust carbon price and we are trying to work out the best role for us to play to catalyze it to happen,” Kyte said.

Ending carbon subsidies. Allied with the International Monetary Fund, the World Bank wants to see the price of fossil fuels reflect the true cost, including that of the environmental damage caused by a warming planet. The IMF has estimated governments subsidize fossil fuels by $1.9 trillion a year – some of it through direct cash payments to keep fuel cheap, some indirectly by allowing the cost of “externalities” to be absorbed by society at large in the form, for example, of increased pollution. Both institutions want to see the practice ended, and are leaning hard on nations like Egypt to end fuel and electricity subsidy programs, while asking countries like the U.S. to raise fuel taxes to account for the social cost of carbon use.

Agriculture. Kim and Kyte talk about farming and plant genomics as among their most promising areas of focus. Both say they are optimistic that technological breakthroughs could produce major benefits. No-till farming, for example, keeps carbon buried in the soil that would otherwise be churned into the atmosphere during planting. In addition, scientists are working on plant strains that fix more nitrogen into the soil, and have a larger root structure that keeps more carbon underground. Plant scientists caution that a “magic bullet” may be elusive: Some of the wheat or sorghum strains that bury more carbon do so at the expense of food yield. Kyte said she is convinced that “we are on the edge of real technological change.” It is not just development agencies such as the World Bank that are involved. Agribusinesses and food companies are also focused on how major crops can be altered to live with less water, hotter temperatures – and perhaps pull more carbon out of the atmosphere as well.

Urban planning.  Kim said Chinese officials have appealed to him directly for help in urban transit and other issues that might relieve the country’s pollution problems. Kyte said transportation is a particular focus, and she says she has a list of mayors in several dozen major cities working with her on ways to curb auto use. She quoted one as saying “success … is not when the poor start driving cars but when the rich start using mass transit.”