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

Major monitorable IEGrecommendations requiring a responseThe World Bank and IFC should—Create incentives and mobilize resources tosupport effective pilot, demonstration, andtechnology transfer projects that have a clearlogic of demonstration and diffusion. This willinclude mobilizing Global Environment Fund andother concessional funds to mitigate World Bankborrower risk; reshaping incentives for staff andmanagers; providing adequate resources for thedesign and supervision of complex projects; andmaking available specialized expertise in technologytransfer and procurement through a real orvirtual technology unit.The WBG should—Place greater emphasis on large-scale energyefficiency scale-up, as measured by energy savedand generating capacity avoided. This includessupport for efficient lighting and exploring thescope for accelerating the global phase-out of incandescentlight bulbs. It includes continued andexpanded support for reductions in transmissionand distribution losses. And it includes proactivesearch by IFC for large-scale, catalytic investmentsin energy efficiency. There is scope tocoordinate World Bank support for demand-sideenergy efficiency policies with IFC support formore efficient manufacturing and more efficientproducts.Management Action RecordManagement responseOngoing/AgreeThis recommendation is consistent with the SFDCC. Key ongoing work consistentwith the recommendation includes—• WBG expects to expand its partnership with GEF, which is well positioned to takeon early research and development risks, through the recently established TechnologyTransfer Program and GEF/IFC Earth Fund.• Through the Clean Technology Fund (CTF), Scaling-up Renewable Energy Partnership(SREP) and Forest Investment Partnership (FIP), WBG is supporting technologyscale-up with the help of innovative financing.• A climate technology program, launched in September 2009, is exploring thefeasibility of climate technology innovation centers in developing countries asa way to stimulate locally relevant climate technologies and harness economicopportunities at the small and medium enterprise (SME) level (first centers alreadyunder development in Brazil, India, and Kenya).• A new MDTF has been established for supporting the introduction of CCStechnologies and providing technical assistance to clients.• IFC’s clean-tech investment practice will be housed in the newly-created ClimateBusiness Group. CLEANTECHNET is a practice group that meets virtually and inperson to share knowledge and issues in the technology space.• The potential for additional initiatives to support these objectives will also beexplored in the Energy Strategy.Partially AgreeWBG agrees with the general emphasis proposed, but does not agree with thespecific action areas proposed. WBG does focus on large-scale or bundled energyefficiency projects to avoid high transaction costs associated with small-scale investments.Estimates of energy saved are computed as part of the appraisal of projectswith energy efficiency components.However, World Bank finds the recommendations on efficient lighting and T&D to berather prescriptive and limited in terms of scope and impacts. They do not accountfor a variety of untapped energy efficiency scale up opportunities and available longtermEE potential in other sectors, on both the supply and demand sides, which couldhave much larger impacts, such as in district heating, industry, and municipalities.IFC intends to increase its climate-related lending from 10 percent of annualcommitments in fiscal 2009 to 20–25 percent in fiscal 2013, and will undertakea proactive search for suitable investments. Energy efficiency is expected to bea significant contributor to meeting this target. IFC will define an approach toestimating avoided emissions associated with its climate-related activity. IFC agreeswith the potential for investments in manufacturing of more efficient products and isactively seeking such opportunities, having made several such investments in fiscal2010.(continued)Management Response | xix