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Table I.1Carbon and Economic Returns on Projects (continued)Hydro run-of-river 8.7 76.9 AppraisalHydro run-of river 4.7 71.1 AppraisalMini-hydro 24 61.2 EvaluationWind 11.9 15.0 AppraisalWind 11.3 13.2 AppraisalWind 5.5 14.1 AppraisalWind 7.1 10.0 AppraisalWind 12.5 34.7 AppraisalWind 7.0 16.8 AppraisalWind 14.7 41.0 AppraisalWind 3.9 14.9 EvaluationBRT 81 9.6 AppraisalSource: World Bank data.Note: BRT = bus rapid transit; CFL = compact fluorescent light; T&D = transmission and distribution.Caveats:• These estimates have many limitations and are presented to indicate rough orders of magnitude and to illustrate the need for more thorough andrigorous analysis.• Estimates—all adapted from WBG project documents—are mostly based on ex ante appraisals and could be overly optimistic. They are not producedwith consistent methodologies or rigor.• Carbon reductions per dollar consider only investment costs; operations and maintenance are excluded.• Economic rates of return (ERRs) typically do not include nonmonetized benefits such as reduction in local air pollution or the value of increased energysecurity.• ERRs take the electricity tariff (and any associated capacity payments) to represent the economic value of electricity (except in the case of solar homephotovoltaics). In many cases tariffs are artificially low, so this will be an underestimate.• In this sample, wind projects receive tariffs that are 2.2 times higher, on average, than the tariffs received by hydropower plants. Hence these estimatesshould not be used for a head-to-head comparison of wind and hydro.• Lifetime emission reductions are based on approximations of project lifetime. Grid power plants are assumed to provide emission reductions for20 years; solar home photovoltaic systems 15 years; bus rapid transit 14 years; energy efficiency projects, transmission and distribution projects andoff-grid power have an assumed lifetime of 10 years; compact fluorescent light bulb life is 6 years. To the extent that projects provide emission reductionsbeyond this, emission reductions are understated.• ERR values for compact fluorescent light bulb projects generally include only fuel savings; they do not also include the value of deferring the need forconstruction of peak load plants, or reductions in load shedding.• Much of the variation in emission reductions (particularly for hydro) comes from variation in the carbon intensity of the baseline power generationbeing displaced by the project.• Energy efficiency financial intermediary project ERR counts all benefits from subproject investments, regardless of whether they were triggered byWBG involvement.• For direct investments in energy efficiency, the (relatively small) costs of energy audits are excluded.• Most of the economic benefits from offgrid solar come from studies that find high household willingness to pay for electrical power.114 | Climate Change and the World Bank Group
Appendix JRecent WBG Developments in Emission Mitigation ActivitiesThe main body of this paper and portfolio analysis has focusedon the 2003–08 period. As noted, there has been anincrease in climate-related activity since the 2008 adoptionof the Strategic Framework on Development and ClimateChange. This appendix provides a descriptive review ofkey developments since 2008, including the 2009 energyportfolio, the Climate Investment Funds, the Carbon PartnershipFacility, the Forest Carbon Partnership Facility,and the Low Carbon Growth Studies program of the EnergySector Management Assistance Program. These areashave not been evaluated in detail or fully validated by IEGanalysis.2008–09 Energy Portfolio DevelopmentsThe growth in support for low carbon energy activitiescontinued in fiscal 2009, reaching annual commitments ofmore than $3.3 billion. Low carbon financing constitutesroughly 40 percent of the energy portfolio. Although IEGhas not formally validated the CEIF 2009 low carbon portfolioclassification, the CEIF definitions have been verysimilar to IEG’s reckoning of low carbon support in the past(see figure J.1).Most financing continues to come from traditional (IDA,IBRD, and International Finance Corporation) fundingsources, with the proportion coming from traditional financingincreasing in 2009.For the first time, more than half of the low carbon portfoliois for energy efficiency, though support for new renewableshas also increased markedly.The increase in financing for low carbon projects in fiscal2008 and 2009 comes primarily from a few large investments.In fiscal 2008, most financing for energy efficiencyand large hydropower was provided by stand-alone projects;26 percent came from just three IBRD projects: IndiaRampur Hydropower Project ($395 million), ChinaEnergy Efficiency Financing ($200 million), and ChinaLiaoning Med. Cities III (an energy efficiency project,$185 million).The following year, the portfolio was dominated by largeenergy efficiency investments; 40 percent of financing camefrom 5 World Bank projects: Turkey Private Sector RenewableEnergy and Energy Efficiency Project ( $500 millionFigure J.1Commitment ($ millions)6,0005,0004,0003,0002,0001,0000Financing for Low and Non-LowCarbon Energy, 2003–092003 2004 2005 2006Year2007 2008 2009Non-low-carbon energy, CEIFLow-carbon energy, CEIFLow-carbon energy, IEGSource: IEG and CEIF.Note: CEIF = Clean energy Investment Framework.IBRD), India Coal-Fired Generation Rehabilitation($225 million), Turkey Programmatic Electricity SectorDevelopment Policy Loan ($200 million), Vietnam RenewableEnergy Development Project ($199 million), andNigeria Electricity and Gas Improvement ($182 million).Recent Activities: Climate Investment FundsIn 2008 the WBG and other multilateral developmentbanks jointly established the $6.2 billion Climate InvestmentFunds. The core of the Climate Investment Fund isthe $5.1 billion Clean Technology Fund (CTF), aimed atfinancing demonstration, large-scale deployment andtransfer of low-carbon technologies in large or middle-incomecountries.CTF financing eligibility requires the creation of countryor sector investment plans, and then selects projectsfor financing on the basis of potential for greenhouse gassavings, cost-effectiveness, demonstration potential atscale, development impact, implementation potential, andadditional costs and risk premium. Eligible technologiesinclude the power sector, transportation, and energy efficiencyin buildings, industry, or agriculture.Appendix J: Recent WBG Developments in Emission Mitigation Activities | 115
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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
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World Bank experienceTwo factors ac
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Box 2.5On-Grid and Off-Grid Renewab
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Energy EfficiencyThe first phase in
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Box 3.1ESCOs and Energy Performance
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have had limited causal impact on t
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measurement of achieved economic re
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Since the early 1990s, public entit
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part with a $198 million IDA credit
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Chapter 4eVAluATioN HigHligHTS• B
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The WBG urban transport portfolio (
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y conventional transport systems, i
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include the forest carbon projects
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for Costa Rica for the period 2000-
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After 20 years of effort, systemati
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orrowers have demonstrated the abil
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Chapter 5EVALuATioN HigHLigHTS• O
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Page 107 and 108: ConclusionsThe WBG’s efforts to p
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Page 113 and 114: Impacts on technology transferThe 2
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