Figure J.2$ (millions)3,5003,0002,5002,0001,5001,000500<strong>Low</strong>-<strong>Carbon</strong> Energy, 2003–09,by Product Lines02003 2004 2005 2006 2007 2008 2009YearIBRD/IDAMIGA<strong>Carbon</strong> Finance (WBG)To date, the CTF has supported creation <strong>of</strong> investmentplans for 12 countries, and for Concentrated Solar Power inthe Middle East and North Africa Region. Together theserepresent planned investments <strong>of</strong> $40 billion, <strong>of</strong> which $4.4billion would be from CTF funds. Since May 2009, sevenprojects have been approved, five <strong>of</strong> which will be administeredby the WBG and the rest by other multilateral developmentbanks. <strong>The</strong> WBG projects support wind power inEgypt and Mexico, urban transport in Mexico, renewableenergy in Thailand, and a mix <strong>of</strong> renewable energy and energyefficiency in Turkey.<strong>The</strong> second part <strong>of</strong> the Climate Investment Fund is theStrategic Climate Funds. With an initial capitalization <strong>of</strong>$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.<strong>The</strong> Strategic Climate Fund is currently supporting threeprograms. <strong>The</strong> Pilot Program for Climate Resilience fundsresilience projects and integration <strong>of</strong> 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 = International<strong>Bank</strong> for Reconstruction and <strong>Development</strong>; IDA = International<strong>Development</strong> Association; IFC = International Finance Corporation;MIGA = Multilateral Investment Guarantee Agency;WBG = <strong>World</strong> <strong>Bank</strong> Group.<strong>Carbon</strong> Partnership Facility<strong>The</strong> <strong>Carbon</strong> 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.<strong>The</strong> 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 <strong>Development</strong> Mechanism(urban transport and energy efficiency), and will pilotcity-wide carbon finance programs.CPF will draw on the <strong>World</strong> <strong>Bank</strong>’s financial and knowledgeresources to strategically integrate carbon finance withsustainable development plans. <strong>The</strong> emphasis on creatinglong-term credit streams will be attractive to both buyersand sellers, who prefer certainty in their <strong>of</strong>fset requirementsand revenue streams.<strong>The</strong> CPF framework creates two funds. <strong>The</strong> <strong>Carbon</strong> Asset<strong>Development</strong> Fund supports the preparation <strong>of</strong> 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. <strong>The</strong> main sources <strong>of</strong>funding for CADF are buyers’ payments and donors’ contribution(about €2 million from each donor).<strong>The</strong> <strong>Carbon</strong> Fund will purchase the emission reductionsgenerated by the CPF programs. This fund became operationalin May 2010 with €100 million in assets.As <strong>of</strong> July 2010 the emission reduction program has signedagreements with a Moroccan solid waste management program(related to recent <strong>World</strong> <strong>Bank</strong> <strong>Development</strong> PolicyLoans in Morocco on waste management), a Vietnam renewableenergy program (corresponding to a <strong>World</strong> <strong>Bank</strong>loan 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 <strong>Carbon</strong> Partnership Facility<strong>The</strong> Forest <strong>Carbon</strong> Partnership Facility is designed to reduceemissions from deforestation and forest degradation116 | Climate Change and the <strong>World</strong> <strong>Bank</strong> Group
y providing value to standing forests. It also seeks toprovide incentives and financing for the sustainable use <strong>of</strong>forest resources and biodiversity conservation. <strong>The</strong> Facilitybecame operational in 2008.<strong>The</strong> facility has two parts: a readiness mechanism, supportedby the Readiness Fund, and a carbon finance mechanism,supported by the <strong>Carbon</strong> Fund. Under REDD Readiness,the Forest <strong>Carbon</strong> 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. <strong>The</strong> <strong>Carbon</strong>Fund 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 <strong>of</strong> fiscal 2009 (compared with theoriginal design target <strong>of</strong> 20). Thirty <strong>of</strong> these had signed participationagreements, and 18 had submitted detailed grantproposals (with three <strong>of</strong> 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 <strong>of</strong> March 2010 the Readiness Fund has $115 million.By the end <strong>of</strong> 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 <strong>World</strong> <strong>Bank</strong> country teams.REDD methodology support claims progress in the followingareas: establishing the first Team Advisory Panel; developinginstruments to support the process <strong>of</strong> the ReadinessMechanism; advancing thinking on reference scenarios,REDD modeling efforts, reporting and verification systems,and economic analysis <strong>of</strong> the costs <strong>of</strong> REDD; and creation<strong>of</strong> a capacity-building program for forest-dependent indigenouspeoples and other forest dwellers.Recent Activities: <strong>Low</strong>-<strong>Carbon</strong> Growth StudiesStarting in 2006, ESMAP’s <strong>Low</strong>-<strong>Carbon</strong> Growth CountryStudies Program began helping Brazil, China, India, Indonesia,Mexico, and South Africa assess their developmentgoals and greenhouse gas mitigation strategies. <strong>The</strong>centerpiece <strong>of</strong> the program is a series <strong>of</strong> country studiesdesigned to identify low carbon opportunities across arange <strong>of</strong> sectors, including energy, transport, waste, andland use/land use change. <strong>The</strong> 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.<strong>The</strong> studies recognize that climate change harms developmentand that mitigation actions form part <strong>of</strong> a developmentstrategy. In each case, the studies recognize the vulnerabilities<strong>of</strong> 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 rights<strong>of</strong> the poor. <strong>Low</strong> carbon development is also emphasizedas a means <strong>of</strong> 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. <strong>The</strong>se lead to different strategiesacross countries, depending on the specific details <strong>of</strong>each 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 <strong>of</strong> 11.7 GtCO 2eper year. <strong>The</strong>re are few low-cost mitigation options in theenergy and transport sectors, because emission intensityis already low by international standards because <strong>of</strong> thereliance on hydropower and ethanol fuel. <strong>The</strong> Brazil studyidentifies negative cost options for roughly 1.1 GtCO 2e peryear (mostly energy efficiency) and a further 7.1 GtCO 2eper year <strong>of</strong> 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 <strong>of</strong> 5.3 GtCO 2e per year. Under the lowcarbon scenario, the share <strong>of</strong> power from coal would dropfrom 31 to 6 percent, <strong>of</strong> 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.<strong>The</strong> 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 <strong>Development</strong>s in Emission Mitigation Activities | 117
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Executive SummaryUnabated, climate
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on average (Iyadomi 2010). (Reducti
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costs for remaining unelectrified a
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World Bank experienceTwo factors ac
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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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