The document discusses the World Bank's strategic framework for addressing climate change and development. It aims to enable the WBG to support sustainable development and poverty reduction as climate risks and opportunities arise. Key principles include working in partnerships guided by the UNFCCC process and taking country-led, tailored approaches. The WBG will provide knowledge, mobilize resources, and support regional and country climate strategies and plans through financing climate change mitigation and adaptation. Carbon markets can play a central role in mobilizing private sector finance for low carbon investments in developing countries.
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Climate change as a development challenge: Act now, act together, act differently
1. Climate change as a development challenge JariVayrynen, Sr. Environmental Specialist, World Bank Meeting the challenge is not a choice between growth and climate change… a climate smart world is within reach if we act now, act together and act differently… … and build on new finance, technology and capacity at scale.
5. Approach tailored to specific needs of diverse clientsKnowledge & Capacity Bottom Up Momentum MDB & UN Partnerships Resource Mobilization Climate Investment Funds Regional / Country Strategies
6. Financing Climate Change Mitigation Scale of financing needs for mitigation estimated by UNFCCC at $200 billion annually Concessional resources are very limited for low carbon investments in developing countries and transition economies Mobilizing private sector finance is crucial Market mechanisms can play a central role
11. Scaling Up Renewable Energy in Low Income CountriesStrategic Climate Fund (SCF) ±$1 billion
12. Investmentplans endorsed with a total funding envelope of US$1.85 billion Average leverage US$ 1 to 10 Pledges (+/-) US$5 billion Energy Efficiency - Replacing inefficient lighting and appliances; expected emissions reductions of 4 million tons of CO2 per year Urban Transport - 20 bus rapid transit corridors with low-carbon bus technologies Renewable Energy Proposed CTF » $500 million leverages » $6.2 billion Mexico Turkey Renewable Energy - Implementing "intelligent" grid management and control systems to support large-scale integration of wind power Renewable Energy and Energy Efficiency - Promoting private sector development through credit lines to local development banks Proposed CTF » $250 million leverages » 2.1 billion Wind Power - From <1,000 MW to 2,500 MW of electricity from wind Urban Transport - Six bus rapid transit corridors and five light rail route Proposed CTF » $300 million leverages » $1.9 billion Egypt
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14. Carbon Capture and Storage (CCS) Forest Carbon Partnership Facility (FCPF) Operational since June 2008 - current donor pledges at $107 million 37 Developing Country Participants Carbon Asset Development Fund (CADF) operational at €7 million Carbon Fund currently €100 million (minimumtarget €200 million) Carbon Partnership Facility (CPF)
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16. Catalyzes financial and technology flows to developing countries to facilitate low-carbon growth;
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18. Application of new technologies and financial instruments to reduce emissions at lower costs; and
19. Transition to a lower carbon economy better tuned to cope with future resource and environmental constraints. Why should this be of interest?
24. Purchase of ERs Emission Reduction Units (ERUs) ERU Baseline emissions Project emissions Baseline Scenario ProjectScenario How does Joint Implementation (JI) work? Industrialized country with an emissions cap Domestic action Purchase of allowances $ Emissions target $ Project benefits from increased cash flow
25. EU Emission Trading Scheme 91,910 Carbon Market Values in 2008 (in M US$) Project-Based Transactions Allowance Markets Assigned Amount Units 210 JI 300 SecondaryCDM CDM 6,500 26,300
26. World Bank Carbon Finance Projects in Bulgaria Joint Implementation projects: Sofia District Heating Pernik District Heating Svilosa Biomass Green Investment Scheme (GIS)–options study GIS is a system where revenues from AAU trades are reinvested in environmental projects To our knowledge Bulgarian Government has not yet concluded any GIS transactions 11
27. 12 Conclusions Climate change is fundamentally a development issue, not only an environmental issue Huge financing needs Carbon markets will continue to be play a major role in catalyzing low carbon investments in developing countries and transition economies The World Bank, through a range of financial instruments and capacity building activities, is deeply engaged in this effort
28. Thank You. JariVayrynen jvayrynen@worldbank.org Please visit us online at www.carbonfinance.org
Notes de l'éditeur
A serious and immediate threat to development prospects, affecting disproportionately the poor.Increasingly severe warnings of the scientific communityDanger starts close to 2C warming above pre-industrial (likely the best we can achieve)Impacts already being felt, falling disproportionately on the poor (developing countries could bear 75-80% of the costs of CC damages while contributing for 35% of GHGs already in the atmosphere – 2% only for low-income countries)Economic growth alone is unlikely to be fast or equitable enough to counter threats from climate change. Action or inaction is not a matter of choice between growth and climate change.A climate smart world is possible if we:Act now, under the leadership of high-income countries to stay as close as possible: to address both the urgency of the problem as well as the tremendous inertia in the climate system, in infrastructure and human systems. Any delay will reduce development options for mitigation and adaptation and raise costs of action. Besides mitigation efforts to avoid the un-manageable, immediate and substantial adaptation efforts in countries that are most vulnerable (and already suffering from first signs of CC) are required.Act together, for equity and efficiency reasons: postponing mitigation in developing countries could double mitigation costs, and that could well happen unless substantial financing is mobilized. Act differently, to call upon the tremendous ingenuity the human race is capable of, in order to tackle a complex problem that affects all dimension of development.Still, a formidable challenge:Finance [scope of this presentation]Technology [radically transform energy systems, make climate-resilient investment] Capacity [to maximize impact of climate finance: build enabling environment, grab technology, financial innovation]