The Challenge of Low-Carbon Development - World Bank Internet ...

Table 5.2Comparative Success at Registrationof CDM Projects, WBG versus OtherSponsors and PurchasersWBGOtherRegistered projects, Oct 2009 69 1,765Ratio of rejected to registered 0 0.07Ratio of validation negative, terminated orwithdrawn to registered0.26 0.34Ratio of in process to registered 0.65 1.58Source: IEG tabulation, UNEP Risoe center as of October 2009.Note: CDM = Clean Development Mechanism; WBG = World BankGroup.The CFU has been more successful insecuring CDM registration than othernon-WBG applicants.However, like previous observers, this evaluation finds thatthe size and timing of carbon credit purchases is far toosmall, in many cases, to plausibly constitute a make-or-breakinfluence on the decision to undertake a project. Instead,carbon funds constitute a mild additional inducement toinvestors that, statistically over the set of projects involved,may have contributed to some additional reductions.Poverty focusAs noted, the 2005 objectives called for ensuring thatsmaller, poorer countries benefited from the carbon market.This was inherently difficult, because these countrieshave very low levels of energy-related emissions to abate,but their deforestation and agriculture-related emissionsare ineligible under Kyoto rules.This mission was carried out largely by the BioCarbonFund and Community Development Carbon Fund,which comprise 8 percent of the overall portfolio. Thesehave placed 39 percent of their purchases in low-incomecountries, as opposed to 0.3 percent for the other carbonfunds (table 5.3). However, these demonstration-orientedfunds experienced high preparation and supervisioncosts, along with implementation problems. Outside thelow-income countries, some projects (such as JepirachiWind Farm) provided benefits to indigenous or lowincomecommunities.The BioCarbon Fund and CommunityDevelopment Carbon Fund put 39 percentof their purchases in low-income countries;the other funds put 0.3 percent intolow-income countries.Table 5.3Carbon Projects with Signed Purchase AgreementsPCF CDCF BioCarbon Fund National + umbrella TotalTotal project cost, a ($ millions) 975 781 265 5,246 7,266ERPA volume, million tons CO 2e 23 9 7 168 208Total volume, million tons CO 2e 60 17 70 515 663ERPA tons breakdown by country group (%)China 34 15 12 84 73JI (transition countries) 13 0 0 5 5Low income 2 42 35 0 3Lower middle income 25 41 38 6 11Upper middle income 26 3 14 5 8Total 100 100 100 100 100Total tons breakdown by country group (%)China 55 10 3 81 69JI (transition countries) 10 0 0 7 7Low income 1 49 74 0 9Lower middle income 12 36 21 5 8Upper middle income 22 5 2 5 7Total 100 100 100 100 100Source: World Bank CFU data.Note: CDCF = Community Development Carbon Fund; CO 2e = carbon dioxide equivalent; ERPA = emissions reduction purchase agreement;PCF = Prototype Carbon Fund. Totals are not exact due to rounding.a. “Total project cost” refers to the investment cost of establishing the project, not to the purchase amount of carbon offsets.76 | Climate Change and the World Bank Group