1. Presentation on Carbon
Finance
Presented By: Alban D’souza

2. Carbon finance
Carbon finance is a new branch
of environmental finance. Carbon finance
explores the financial implications of living in
a carbon-constrained world, a world in which
emissions of carbon dioxide and other green
house gases (GHGs) carry a price.

3. Introduction
 Environmental consciousness is taking its shape in various
dimensions in today’s complex business world.
 The five mega issues which are impacting the behaviour of
companies and in turn their strategies are the Climate Change,
Pollution/Health Consciousness, Globalization backlash, Energy
Crunch and Erosion of Trust
 The finance sector is impacted because the world commands a hefty
price for Carbon dioxide emissions and greenhouse gases
(GHGs). This is the major reason why today’s environmental issues
elate to the level of corporate financial strategy and policy involving
CEOs, CFOs and BOD of companies.
 Hence, an understanding of carbon finance, role of the financial
services sector and carbon trading (as other commodity trading) in
climate/commodity exchanges by environment-conscious
stakeholders in various industry value chains assumes significance
in the context of environmental risk mitigation and adherence to
climate change policies.

4. Climate Change and Industry
 Industries directly affected by climate
change include Agriculture, Fisheries,
Forestry, Health Care, Tourism, Water,
Real Estate and Insurance[2]. GHG
emissions from agricultural activities
account for about 15% of global GHG
emissions. Weather developments
may also have negative
consequences for carbon-regulated
industries such as electric power, Oil
and gas producers.

5. Joint Implementation and Clean
Development Mechanism
 With the entry into force of the Kyoto Protocol on February 16, 2005,
more than one hundred and forty countries agree to work together to
fight global climate change. The thirty six industrialized countries
that ratified the Protocol - namely Canada, Japan, members of the
European Union, as well economies in transition from Central and
Eastern Europe – agree to put in place policies and measures to
collectively reduce 5 percent of their emissions between2008 to
2012 as measured against 1990 levels. To meet this binding
commitment, industrialized countries have the option to reduce part
of their emissions domestically, and they can also emission
reductions from developing countries or from countries with
economies in transition through Joint Implementation or International
Emissions Trading.
 The Kyoto Protocol fulfils the commitment made by one hundred and
eighty six countries under the UN Framework Convention on Climate
Change (UNFCC) that industrialized countries – who are responsible
for the vast majority of emissions that cause climate change –
should take the first steps towards sustainable energy consumption,
use of clean technologies and sustainable land management
practices, which are needed to mitigate the impacts of climate
change.

6. World Bank’s involvement in
Carbon Finance
 The threat climate change poses to long-
term development and the ability of the
poor to move out from poverty is of
particular concern to the World Bank.
The carbon finance activities of the
World Bank are a natural extension of
the Bank’s mission to reduce poverty.
The Bank makes every effort to ensure
that poor countries can benefit from
international responses to climate
change including the emerging carbon
market for GHG emission reductions.

7. The Bank has created several carbon
funds. Who owns these funds?
 The World Bank manages several carbon funds and
facilities comprised of public and private participants:
Prototype Carbon Fund (PCF); Netherlands JI and
Netherlands CDM Facilities; Community Development
Carbon Fund (CDCF); Bio Carbon Fund; Italian Carbon
Fund; Spanish Carbon Fund; Danish Carbon Fund; the
Umbrella Carbon Facility (UCF); Carbon Fund for
Europe (CFE); the Forest Carbon Partnership Facility
(FCPF); and the Carbon Partnership Facility (CPF).
These funds are public or public-private partnerships
managed by the World Bank as a Trustee. They operate
much like a closed-end mutual fund; they purchase
greenhouse gas emission reductions from projects in
the developing world or in countries with economies in
transition, and pay on delivery of those emission
reductions.

8. Work of Carbon Funds:

9. Main players in the Carbon
market at this point in time
 Companies and governments are
attracted to the various Carbon funds of
the World Bank by the proven record of
the World Bank in providing shareholders
with Kyoto-compliant certified emission
reduction assets at a guaranteed low
price. Additional benefits for investors
include the acquisition of high-value
knowledge and intelligence on carbon
finance and emerging national, regional
and international markets.


10. Conclusion
 carbon market, playing key roles in
the design and implementation of
the Kyoto mechanisms since their
inception. The Carbon Finance
group develops and manages funds
that invest in companies and
projects involved in the reduction
of greenhouse gas emissions and
has managed over €850m to invest
in carbon projects since 2005.

11. Thank You