This internal background paper has beenprepared to help inform the 2010 environment strategy withrespect to a proposed way forward on use of country systems.The World Bank Group environment strategy is built on threepillars: leveraging natural resources for growth and povertyreduction; managing the environmental risks to growth anddevelopment; and transforming growth paths. As part of itsexploration of these three pillars, the strategy considersthe question of environmental co-benefits of climate changeactions. In particular, it poses the question of potentialtrade-offs between actions to address climate change andother local and regional environmental priorities, andconsiders how to maximize co-benefits arising from climateaction. The primary objective of this background paper is toassess the potential for climate change mitigation andadaptation actions to provide environmental co-benefits,particularly in the quality of environmental media, flow ofecosystem services, and maintenance of biodiversity. Toaccomplish this, the paper is organized in five sections:section one gives provision of an organizing framework toidentify and classify potential co-benefits; section twogives summary of the external literature on co-benefits;section three gives review of examples from the World Bankportfolio; section four presents initial thoughts oncreation of enabling conditions for co-benefit provision;and section five gives review of implications for theenvironment strategy.