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Figure J.2$ (millions)3,5003,0002,5002,0001,5001,000500Low-Carbon Energy, 2003–09,by Product Lines02003 2004 2005 2006 2007 2008 2009YearIBRD/IDAMIGACarbon Finance (WBG)To date, the CTF has supported creation of investmentplans for 12 countries, and for Concentrated Solar Power inthe Middle East and North Africa Region. Together theserepresent planned investments of $40 billion, of which $4.4billion would be from CTF funds. Since May 2009, sevenprojects have been approved, five of which will be administeredby the WBG and the rest by other multilateral developmentbanks. The WBG projects support wind power inEgypt and Mexico, urban transport in Mexico, renewableenergy in Thailand, and a mix of renewable energy and energyefficiency in Turkey.The second part of the Climate Investment Fund is theStrategic Climate Funds. With an initial capitalization of$250 million, the Funds aim to provide financing to pilotprojects that target specific climate change challengesor sector responses in five to ten low-income countries.The Strategic Climate Fund is currently supporting threeprograms. The Pilot Program for Climate Resilience fundsresilience projects and integration of resilience considerationsinto national development plans; the Forest InvestmentProgram supports capacity building for forest governanceand investments to reduce pressure on forests;and the Scaling up Renewable Energy Program supportsactions to remove barriers that inhibit private sector investmentin renewable energy in low-income countries.Whereas the CTF supports both renewable energy andenergy efficiency, the much smaller, low-income-orientedScaling up Renewable Energy Program supports only renewableenergy.IFCGEF (WBG)Other financingSource: CEIF.Note: GEF = Global Environment Facility; IBRD = InternationalBank for Reconstruction and Development; IDA = InternationalDevelopment Association; IFC = International Finance Corporation;MIGA = Multilateral Investment Guarantee Agency;WBG = World Bank Group.Carbon Partnership FacilityThe Carbon Partnership Facility (CPF) was establishedin 2007 as a response to uncertainty about the post-2012international climate regime and the associated limited demandfor post-2012 carbon assets. It is designed to developand market emission reductions on a larger scale by providingcarbon finance to investments that will deliver post-2012 emission reduction assets.The CPF intends to scale up carbon finance by supportingprogrammatic and sector-based approaches to reducegreenhouse gas emissions and by collaborating withgovernment and market participants. It will operate in traditionalsectors (power, gas flaring, transport, waste managementsystems, and urban development), in sectors thathave not been reached by the Clean Development Mechanism(urban transport and energy efficiency), and will pilotcity-wide carbon finance programs.CPF will draw on the World Bank’s financial and knowledgeresources to strategically integrate carbon finance withsustainable development plans. The emphasis on creatinglong-term credit streams will be attractive to both buyersand sellers, who prefer certainty in their offset requirementsand revenue streams.The CPF framework creates two funds. The Carbon AssetDevelopment Fund supports the preparation of emissionreduction programs, including grants. It provides fundingfor methodology development, emission reduction programidentification and development, and asset feasibility,Project Design Document development and monitoringplan. In addition, the Fund covers all facility costs for emissionreduction program preparation. The main sources offunding for CADF are buyers’ payments and donors’ contribution(about €2 million from each donor).The Carbon Fund will purchase the emission reductionsgenerated by the CPF programs. This fund became operationalin May 2010 with €100 million in assets.As of July 2010 the emission reduction program has signedagreements with a Moroccan solid waste management program(related to recent World Bank Development PolicyLoans in Morocco on waste management), a Vietnam renewableenergy program (corresponding to a World Bankloan in 2009), a Brazil solid waste management program,and an Amman city-wide program. In addition, there are13 different programs under development in East andSouth Asia, Europe and Central Asia, the Middle East andNorth Africa, and the Africa Regions.Forest Carbon Partnership FacilityThe Forest Carbon Partnership Facility is designed to reduceemissions from deforestation and forest degradation116 | Climate Change and the World Bank Group
y providing value to standing forests. It also seeks toprovide incentives and financing for the sustainable use offorest resources and biodiversity conservation. The Facilitybecame operational in 2008.The facility has two parts: a readiness mechanism, supportedby the Readiness Fund, and a carbon finance mechanism,supported by the Carbon Fund. Under REDD Readiness,the Forest Carbon Partnership Facility will help developingcountries prepare national reference scenarios for emissionsfrom deforestation and forest degradation, developcountry-owned strategies for reducing deforestation andforest degradation, and establish national measurement,reporting and verification systems for REDD. The CarbonFund will pilot and test REDD carbon transactions in thecountries that have established a sound national frameworkthrough the readiness mechanism.Thirty-seven REDD countries had been selected for the readinessmechanism by the end of fiscal 2009 (compared with theoriginal design target of 20). Thirty of these had signed participationagreements, and 18 had submitted detailed grantproposals (with three of the grant agreements fully signed).In this first year, the Facility has increased the target volumefor the Readiness Fund from $100 million to about $185 million;as of March 2010 the Readiness Fund has $115 million.By the end of fiscal 2009 each country’s Readiness PreparationIdea Note was submitted to the Facility and receivedone to three Technical Advisory Panel reviews/discussions,Facility Management Team reviews, and informal reviewsby World Bank country teams.REDD methodology support claims progress in the followingareas: establishing the first Team Advisory Panel; developinginstruments to support the process of the ReadinessMechanism; advancing thinking on reference scenarios,REDD modeling efforts, reporting and verification systems,and economic analysis of the costs of REDD; and creationof a capacity-building program for forest-dependent indigenouspeoples and other forest dwellers.Recent Activities: Low-Carbon Growth StudiesStarting in 2006, ESMAP’s Low-Carbon Growth CountryStudies Program began helping Brazil, China, India, Indonesia,Mexico, and South Africa assess their developmentgoals and greenhouse gas mitigation strategies. Thecenterpiece of the program is a series of country studiesdesigned to identify low carbon opportunities across arange of sectors, including energy, transport, waste, andland use/land use change. The studies or summary casestudies have been publically released for Mexico, Brazil,and India. Most studies generate a baseline scenario anda low carbon alternative and describe the technical solutionsby which the alternative could be achieved. Energyaccess objectives are not highlighted in the studies publishedso far.The studies recognize that climate change harms developmentand that mitigation actions form part of a developmentstrategy. In each case, the studies recognize the vulnerabilitiesof the particular country to climate change, and thusthe need for both mitigation and adaptation. However, theygenerally support the need for mitigation through an internationalclimate agreement, and emphasize that any mitigationobligations must not harm the development rightsof the poor. Low carbon development is also emphasizedas a means of supporting negative cost no-regrets options,energy security, nonclimate pollution reduction, and abilityto access carbon market opportunities.Though the studies consider mitigation options in each sectorsequentially, they attempt to take a systemic approach bymaking cost comparisons across sectors. Most studies developa unified marginal abatement cost curve, where optionsare ranked by cost and scope. These lead to different strategiesacross countries, depending on the specific details ofeach case. In each case, there are many negative or zero costchanges, particularly in energy efficiency or land use change.For example, for Brazil, the emphasis is on agriculture anddeforestation, with emission reduction goals of 11.7 GtCO 2eper year. There are few low-cost mitigation options in theenergy and transport sectors, because emission intensityis already low by international standards because of thereliance on hydropower and ethanol fuel. The Brazil studyidentifies negative cost options for roughly 1.1 GtCO 2e peryear (mostly energy efficiency) and a further 7.1 GtCO 2eper year of roughly zero cost changes for avoided deforestation,livestock and zero-tillage cropping options.For Mexico, the emphasis is still on agriculture and forestry,but energy and transport are also important in achievingemission reductions of 5.3 GtCO 2e per year. Under the lowcarbon scenario, the share of power from coal would dropfrom 31 to 6 percent, of which roughly 23.5 percentagepoints would come from increases in geothermal, biomass,wind, and small hydropower sources. Negative cost interventionswould save 3.4GtCO 2e per year, including bus systemoptimization, cogeneration, charcoal production improvements,fuel economy standards, biomass power andimproved cookstoves.The strategies recognize that energy efficiency (includingtransport efficiency) and demand-side management willplay a major role in any cost-effective mitigation strategy.In nearly every case, the scope for efficiency improvementsis large and can be achieved at lower cost than increases inincreasing generation through renewable energy.Energy access issues were considered in the India study,though not in Brazil, China, or Mexico.Appendix J: Recent WBG Developments in Emission Mitigation Activities | 117
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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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Consequently, the efficiency with w
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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 and 116: Chapter 6Photo by Martin Wright/Ash
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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
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Page 133 and 134: Appendix bWorld Bank Experience wit
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Page 137 and 138: TAble C.4Reviewed energy efficiency
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Page 143 and 144: Table F.2GHG objectiveModeNumber of
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Page 149 and 150: Appendix ICarbon and Economic Retur
Page 151: Appendix JRecent WBG Developments i
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