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

Management ResponseI. IntroductionManagement welcomes the second phase evaluation by theIndependent Evaluation Group (IEG) of lessons-learnedfor development and climate change mitigation from theWorld Bank Group’s (WBG) portfolio in energy, forestry,and transport. As noted in the first phase evaluation (IEG2009), IEG’s evaluation covering the expanding projectlevelexperience of the Bank and the International FinanceCorporation (IFC) in promoting renewable energy, energyefficiency, and carbon finance enables a comprehensive assessmentof the focus and success of the WBG’s efforts onlow carbon development. Management appreciates the factthat this report covers activities across the entire WBG,including IFC and the Multilateral Investment GuaranteeAgency (MIGA).The report addresses a very important topic and summarizesa major exercise to review how the WBG portfoliohas been contributing to low-carbon growth objectives. Itapproaches this exercise from an appropriate and constructiveangle: not to be the “judge” of the past WBG performancein promoting low-carbon growth, since, until veryrecently, it was not a stated WBG objective, but rather touse available experiences and lessons to inform future actions.It correctly recognizes that projects can contribute tolow-carbon growth even if they do not necessarily includeit in development objectives, and thus assesses a wide poolof projects with and without explicitly stated mitigationrelated objectives. While the report does not look at everysector and subsector where significant mitigation cobenefitscan be obtained, its selection of sectors is reasonable.Management appreciates the many useful observations andsuggestions provided in the report and concurs with aspectsof IEG’s main findings. Many of these comments reinforcethe messages expressed in the WBG Strategic Frameworkon Development and Climate Change (SFDCC) and arecomplemented by emerging lessons from analytical studies,sector strategies, and relevant project level experiencesacross the WBG. At the same time, management differswith some of IEG’s findings and recommendations.II. Key Issues of Agreement and DivergenceOverview of responseThis Management Response first outlines the areas in whichmanagement broadly agrees with the analysis in the review,noting, however, areas where IEG could have given a fulleraccount of efforts the WBG has made or is making. It thendiscusses areas in which Management believes that IEGhas drawn conclusions from an analysis based on limitedcoverage, without fully taking into account the significantongoing changes that have been facilitated by the adoptionof the SFDCC.A. Areas of agreementLow-Carbon Studies. Appendix J, referring to the lowcarbonpilot program, provides a useful summary of theavailable work. It also includes the comment that access toenergy is generally not considered. Management would liketo emphasize that this statement should not be generalizedabout all work on low-carbon studies, since the observationis based only on work presently in the public domain (forexample, Brazil and Mexico and the review of renewableenergy targets and power dispatch efficiency for China).The low-carbon study for India has paid attention to theaccess issue.In addition, the appendix does not address the issue of longtermplanning (20 years+) and demand for capacity buildingin this area, which has been integral to the low-carbonwork along with the need to engage and build consensusacross broad stakeholder groups. These are the emergingkey lessons, and as such should be incorporated in the lowcarbonwork to be pursued in the future.Development cobenefits. With respect to the issue ofenergy access, IEG correctly notes that monitoring andevaluation data are rarely available to quantify cobenefitsof low-carbon interventions in terms of poverty reduction,energy/transport access, and gender equity. In this regard,management believes that it is worth noting the priority beinggiven to developing results frameworks for the SFDCCand the Climate Investment Funds (CIF). This ongoingwork aims to identify indicators which would allow for abetter tracking of distributional and gender dimensions,with a view to assessing the extent to which developmentcobenefits actually result from low-carbon interventions.A new set of International Development Association (IDA)core indicators has also been prepared to better capture thedevelopment impacts of energy projects. Also, the forthcomingreport on transport and climate underscores theimpact of development cobenefits in moving toward a lowcarbontransport sector.Finally, since the issue of development cobenefits is ofcentral importance to the WBG, management feels that itxvi | Climate Change and the World Bank Group