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esidents, and of the post-project financial sustainabilityof management. Failure to document impacts or tolearn systematically from experience has kept the REDDinitiative from having a 20-year “head start.”Failure to monitor can also lead to skewed incentives. Forlack of an alternative, the WBG (and to some extent thisevaluation) uses dollar volume of commitments to measurethe organization’s orientation toward climate issues. Usingdollars as a scorecard was arguably important for the BonnCommitment in directing attention and resources towardrenewable energy and energy efficiency. But ultimately theuse of an input rather than an outcome measure risks drivingthe organization toward inefficient or ineffective activities.For instance, efficient lighting programs offer much higherreturns—in cost savings and GHG reduction—than investmentin renewable energy. But a hydro plant offers a muchhigher ratio of loan amount to staff preparation cost and istherefore potentially more attractive in a budget-constrainedorganization that scores achievement by dollars loaned.The CDM experience with monitoring points to a wayforward. Unlike most other development projects, carbonprojects are required to monitor their outputs. (Otherwisethey do not get paid.) Calculating carbon offset productionrequires stipulating a “business as usual” emissions level.This is difficult and has often been contentious. But it alsorequires measuring the project’s actual performance—forinstance, how many hours a wind turbine operates, or howmany CFLs are distributed and installed. This generatestimely, publically available, comparable information.Just as private sector firms derive value from monitoringthe performance of and customer satisfaction with theirproducts, the WBG has an interest in tracking the performanceand sustainability of its projects. At the same time,it can work with public and private clients, when requested,to help them implement benchmarking and monitoringsystems, so as to better define goals and track outcomes.This becomes increasingly feasible as information costsplummet; remote sensing resources multiply in number,sensitivity, and accessibility; and cell phone access becomesnearly universal. By wiring projects and sectors to returncurrent and reliable information on forest cover, T&Dlosses, household access to electricity, and so on, global innovationcan be accelerated, and the returns to investmentenhanced.The WBG is a natural nexus and starting point for thisglobal public good, which should eventually expand to aglobal network of information sharing. This is consistentwith the strategic objectives for knowledge creation and capacitybuilding.Specific recommendations include the following:• Measure projects’ economic and environmental impactduring execution and after closure and aggregate thisinformation for analysis. For instance, renewable energyprojects should monitor capacity utilization, andenergy efficiency projects should monitor energy savings.This may require the use of concessional funds todefray additional costs of monitoring by staff, clients,and project proponents.• Link these measures to a results framework that shiftsthe SFDCC toward a focus on outputs such as powerproduced, power access, forest cover, and transit shareof urban trips, rather than money spent.Table 6.1Summary of Sectoral FindingsSector Intervention Direct impacts Leverage and diffusionimpactsRenewableenergy — ongridLendingLonger loan terms significantlyimprove bankability.Better upfront planning hasbeen important to assure betteroutcomes in hydropower.Monitoring needs and issuesWhat are the economic and carbonimpacts?What are the reasons for over orunderperformance in capacityutilization?GuaranteesHydropower has generallyhigher returns than wind power.Guarantees against breach ofcontract could significantlyimprove bankability.84 | Climate Change and the World Bank Group
Table 6.1Summary of Sectoral Findings (continued)Sector Intervention Direct impacts Leverage and diffusionimpactsCarbon financeCarbon finance has little impacton bankability of wind andhydropower projects. Moreover,the stated rationales for the useof carbon funds often refer tobarriers that are best addressedwith greater leverage throughpolicy reform (such as unreliablepower purchase agreements)rather than at the project level.Thirty-five percent ofWBG carbon financeprojects claimed somedegree of technologytransfer.Monitoring needs and issuesCarbon project monitoringprovides valuable feedback. Forexample, poor performance oflandfill gas projects was detectedand corrective actions taken. GEFor other funds could enhance thisde facto monitoring system.Solar homephotovoltaicsCarbon finance has significantimpact on bankability of projectsthat reduce methane emissions.Performance of carbon projectshas often been poor (lowerproduction of permits thanexpected).Resource Siting makes a huge differencesurveysin economic returns because ofspatial variation in wind, water,geothermal, and so forth. Therehave been modest investmentsby the Bank in resource surveys.Impact not evaluated.Policy reform Standardized smallpower purchase agreementshave reduced thecosts of entry of smallhydropower producers inSri Lanka, with significantcumulative impact.Regulatory reforms inChina, Mexico, and Turkeyhave catalyzed windinvestments.Subsidies Subsidies increase household Quality-contingent subsidiesdemand; impact not wellfor manufacturersmeasured.boost competition andquality, and reduce priceat the national level.No global impact onprice; scale was too small.Microfinance Specialized microfinanceinstitutions were able to supportSHS buyers in Bangladesh andSri Lanka.How useful are surveys?Can remote sensing providecontinually updated and improvedinformation on wind and waterresources?What is the fiscal impact andinvestment response of feed-intariffs or renewable portfoliostandards?Longevity and utilization of thesolar home systemsManufacturing qualityMarket penetrationGeographical extent of the electricgrid and connection rate within thegrid (to assess market size for photovoltaic);price elasticity of demand.(Continued)Conclusions and Recommendations | 85
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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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Page 72 and 73: Box 3.1ESCOs and Energy Performance
Page 74 and 75: have had limited causal impact on t
Page 76 and 77: measurement of achieved economic re
Page 78 and 79: Since the early 1990s, public entit
Page 80 and 81: part with a $198 million IDA credit
Page 83 and 84: Chapter 4eVAluATioN HigHligHTS• B
Page 85 and 86: The WBG urban transport portfolio (
Page 87 and 88: y conventional transport systems, i
Page 89 and 90: include the forest carbon projects
Page 91 and 92: for Costa Rica for the period 2000-
Page 93 and 94: After 20 years of effort, systemati
Page 95 and 96: orrowers have demonstrated the abil
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Page 99 and 100: Consequently, the efficiency with w
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Page 103 and 104: A second issue, inherent to any adv
Page 105 and 106: goal of promoting wind turbine impr
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
Page 117 and 118: Figure 6.1800Economic and Carbon Re
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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
Page 131 and 132: Figure A.4A. Hydro/biomass capacity
Page 133 and 134: Appendix bWorld Bank Experience wit
Page 135 and 136: Table C.2Completed Low-Carbon Energ
Page 137 and 138: TAble C.4Reviewed energy efficiency
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Page 141 and 142: Table E.2Climate obligationsCoal Pl
Page 143 and 144: Table F.2GHG objectiveModeNumber of
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Page 149 and 150: Appendix ICarbon and Economic Retur
Page 151 and 152: Appendix JRecent WBG Developments i
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Page 161 and 162: Hartshorn, G., P. Ferraro, and B. S
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