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Conclusions and RecommendationsEconomic life and GHG emissions have been closely intertwined. This evaluation hastraced some of the most important parts of that large and complex knot, assessing theimpacts of WBG attempts to disentangle the threads. Table 6.1 summarizes the sectoralfindings. This chapter draws conclusions that cross-cut those diverse sectors andpresents recommendations.The Congruence of Mitigation andDevelopmentGHG mitigation directly contributes to development andpoverty reduction. But it does so by managing long-termrisks at the global level. Thus, countries are rightly concernedabout potential trade-offs between long-term, globallyshared benefits and short-term, local benefits.IEG finds that there are many important areas of action thatcombine significant global benefits with high local ones.Figure 6.1 plots indicative estimates of the local economicreturns and global mitigation returns of some of the interventionsdiscussed in this evaluation. These estimates mustbe taken with extreme caution, as they are based on possiblyoveroptimistic appraisals or on sometimes inconsistentor poorly documented monitoring reports.But this evaluation suggests that energy efficiency and BRToffer local ERRs that exceed most development projects,with GHG as a significant side benefit. At current valuationsof carbon reduction, the domestic benefits are muchlarger than the carbon benefits. There was insufficient informationto compute returns to forest interventions, butthere are large deforestation reductions (and therefore largeemissions reductions) from forest protection projects, especiallywhere local sustainable use is allowed, and evengreater reductions from the establishment or maintenanceof indigenous forest areas. This suggests a combination ofsocial, biodiversity, and carbon gains from these projects.A Systems View Is EssentialAs emphasized in Phase I of this evaluation (IEG 2009), asystems view is often necessary to assess interventions’ impactsand to appraise alternatives. A narrow project-levelfocus can fail to account for positive or negative indirecteffects, fail to identify important complementary efforts,and become mired in controversy uninformed by a considerationof alternatives.For instance, the WBG’s involvement in coal projects hasbeen a lightning rod for debate. If there were an internationalagreement that clearly set out how to achieve theUNFCCC goal of climate stabilization, with assigned rolesand responsibilities, such a debate would not be necessary.In the existing vacuum, the SFDCC set out criteria thatwould restrict support to cases that are least cost, that optimizeenergy efficiency options, and for which no financeablelow-carbon alternative exists.A study for Kosovo illustrates a way to apply these criteria.It employs a systemwide model to show that even in thepresence of €10/ton of CO 2charges or credits, and takingaccount of the damages from air pollution, it would still beadvantageous for Kosovo to build a large coal plant, whileclosing smaller, older ones. However, it is essential that suchmodels incorporate the scope for efficiency improvementsas an alternative to new power generation and considerhigher levels of carbon payment.Similarly, assessment of the costs and benefits of largehydropower plants should be made in the context of asystems model that identifies the advantages and disadvantagesof different sites (as in the Nile Equatorial Lake StrategicEnvironmental Assessment). The model should alsoconsider the social and environmental impacts of alternativemodes of power provision.In the area of forests and land use, forest conservationneeds to be accompanied by sustainable agricultural intensification.Increased agricultural profitability by itselfcould motivate added deforestation; increased forest protectionin one area could deflect pressures to another inthe absence of a compensating supply of food, timber, andjobs. Likewise, the benefits of improved urban transit canbe quickly eroded as cars expand into freed-up roadways;80 | Climate Change and the World Bank Group
Figure 6.1800Economic and Carbon Returns to InvestmentsPanel AProject ERR700600500400300200100CFLsEnergy efficiencyPanel B00 20 40 60 80 100 120 140 160Lifetime CO 2 emissions / investment cost (kgCO 2 per $)T&D Off-grid solar Energy efficiency HydropowerWind CFL BRT160Panel B140120CFLsProject ERR100806040SHSBRTT&DEnergy efficiency20WindHydropower00 20 40 60 80 100 120 140Lifetime CO 2 emissions / investment cost (kgCO 2 per $)Source: IEG.Note: Estimates—all adapted from WBG project documents—are mostly based on ex ante appraisals, could be overly optimistic, andare selected on the basis of availability. They are not produced with consistent methodologies or rigor. See appendix I for a fullerdescription of data limitations. BRT = bus rapid transit; CFL = compact fluorescent light; ERR = economic rate of return; SHS = solarphotovoltaic home system; T&D = transmission and distribution.a comprehensive system of transport demand managementis necessary for sustained gains.RecommendationsThe WBG’s resources are small compared with the capitalcost of providing low-carbon energy to developing andtransition economies—to say nothing of broader developmentneeds. To make a difference for the planet, the WBGneeds to leverage its resources as far as possible. It can dothis through four interlinked lines of action:• Support favorable policies (discussed at length inPhase I of this evaluation with respect to energy pricingand efficiency policies, and reiterated here in connectionwith renewable energy policies).• Be a venture capitalist for technical, financial, andinstitutional innovations (in short, for fostering technologytransfer) by identifying innovations that havepotentially high returns, using a cycle of piloting anddemonstration to test, adapt, upscale, and diffuse thesetechnologies to wider and wider audiencesConclusions and Recommendations | 81
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Phase II: The Challenge of Low-Carb
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CLIMATE CHANGE AND THE WORLD BANK G
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Table of ContentsAbbreviations . .
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Figures1.1 GHG Emissions by Sector
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AcknowledgmentsThe report was prepa
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Executive SummaryUnabated, climate
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esettlement plans has been ineffect
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of some technologies, such as landf
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Scale up high-impact investmentsEne
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should have been strengthened in th
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Major monitorable IEGrecommendation
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Major monitorable IEGrecommendation
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Chairman’s Summary: Committee onD
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most places. Before we get there, w
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non-Annex I countries. The World Ba
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attention. In a couple of decades,
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GlossaryAdditionalityBankabilityBas
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Joint ImplementationA mechanism und
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Chapter 1evALuAtiOn HiGHLiGHts• T
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of interventions, from technical as
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would allow industrialized countrie
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growth, poverty reduction (includin
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Table 1.1 Map of the EvaluationSect
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Chapter 2eValuaTION HIGHlIGHTS• W
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Table 2.2Evaluated World Bank Renew
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Figure 2.2Breakdown of 2003-08 Low-
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Table 2.4 Commitments to Grid-Conne
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Box 2.1The Economics of Grid-Connec
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on average (Iyadomi 2010). (Reducti
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and industrial policy. An increasin
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Table 2.6Hydropower Investments by
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costs for remaining unelectrified a
Page 65 and 66: World Bank experienceTwo factors ac
Page 67: Box 2.5On-Grid and Off-Grid Renewab
Page 70 and 71: Energy EfficiencyThe first phase in
Page 72 and 73: Box 3.1ESCOs and Energy Performance
Page 74 and 75: have had limited causal impact on t
Page 76 and 77: measurement of achieved economic re
Page 78 and 79: Since the early 1990s, public entit
Page 80 and 81: part with a $198 million IDA credit
Page 83 and 84: Chapter 4eVAluATioN HigHligHTS• B
Page 85 and 86: The WBG urban transport portfolio (
Page 87 and 88: y conventional transport systems, i
Page 89 and 90: include the forest carbon projects
Page 91 and 92: for Costa Rica for the period 2000-
Page 93 and 94: After 20 years of effort, systemati
Page 95 and 96: orrowers have demonstrated the abil
Page 97 and 98: Chapter 5EVALuATioN HigHLigHTS• O
Page 99 and 100: Consequently, the efficiency with w
Page 101 and 102: technologies could accelerate diffu
Page 103 and 104: A second issue, inherent to any adv
Page 105 and 106: goal of promoting wind turbine impr
Page 107 and 108: ConclusionsThe WBG’s efforts to p
Page 109 and 110: Table 5.1Carbon Funds at the World
Page 111 and 112: demonstration initiative. The Commu
Page 113 and 114: Impacts on technology transferThe 2
Page 115: Chapter 6Photo by Martin Wright/Ash
Page 119 and 120: Specifically, the WBG could:• Pla
Page 121 and 122: Table 6.1Summary of Sectoral Findin
Page 123 and 124: Table 6.1Sector Intervention Direct
Page 125 and 126: Appendix ARenewable Energy Tables a
Page 127 and 128: Table A.4Grid-Based Biomass/Biogass
Page 129 and 130: Table A.5 (continued)Negative examp
Page 131 and 132: Figure A.4A. Hydro/biomass capacity
Page 133 and 134: Appendix bWorld Bank Experience wit
Page 135 and 136: Table C.2Completed Low-Carbon Energ
Page 137 and 138: TAble C.4Reviewed energy efficiency
Page 139 and 140: the new capacity. Transmission syst
Page 141 and 142: Table E.2Climate obligationsCoal Pl
Page 143 and 144: Table F.2GHG objectiveModeNumber of
Page 145 and 146: IEG eliminated a few cases of doubl
Page 147 and 148: Table H.1Project andlocationBioener
Page 149 and 150: Appendix ICarbon and Economic Retur
Page 151 and 152: Appendix JRecent WBG Developments i
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Page 155 and 156: never had an explicit corporate str
Page 157 and 158: overnight. The Bank can provide ass
Page 159 and 160: Chapter 51. From the chief economis
Page 161 and 162: Hartshorn, G., P. Ferraro, and B. S
Page 163 and 164: ______. 2007. World Development Ind
Page 165 and 166: IEG PublicationsAnalyzing the Effec
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