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

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IntroductionIn 2008, the World Bank Group (WBG) adopted a Strategic Framework on Developmentand Climate Change (SFDCC). This framework addresses the challenges of promotingdevelopment in a changing climate. The Independent Evaluation Group’s (IEG) climateevaluation series does not directly assess the performance of this new framework.Rather, it recognizes that the WBG has for some years been deeply involved in renewableenergy, energy efficiency, forest conservation, and other activities at the cusp ofdevelopment and climate change. An early assessment of that experience can helpinform the implementation of the SFDCC.The first volume of IEG’s series (IEG 2009) examinedWorld Bank experience with the promotion of the mostimportant win-win (no regrets) energy policies—policiesthat combine domestic gains with global greenhouse gas(GHG) reductions. These included energy pricing reformand policies to promote energy efficiency (see appendix K,Executive Summary of Phase I).This second phase covers the entire WBG, including theInternational Finance Corporation (IFC) and the MultilateralInvestment Guarantee Agency (MIGA). It assessesHow can the WBG increase its impacton development and climate changemitigation?recent experience with promoting the adoption and diffusionof technologies and practices that reduce GHGemissions while advancing other development goals. Itencompasses a diverse range of activities, including renewableenergy, energy efficiency, urban transport, andforest management. And it encompasses a broad repertoryBox 1.1The Strategic Framework on Development and Climate ChangeObjectives• To enable the WBG to effectively support sustainable development and poverty reduction at the national,regional, and local levels, as additional climate risks and climate-related economic opportunities arise.• To use the WBG’s potential to facilitate global action and interactions by all countries.Action Areas• Support climate action in country-led development processes.• Mobilize additional concessional and innovative finance.• Facilitate the development of market-based financing mechanisms.• Leverage private sector resources.• Support accelerated development and deployment of new technologies.• Step up policy research, knowledge, and capacity building.Source: World Bank 2008.2 | Climate Change and the World Bank Group
of interventions, from technical assistance to financing toregulatory reform. This project-eye view of activities pertainsto all the action areas of the SFDCC (see box 1.1).The third phase will look at the challenge of adaptation toclimate change.The WBG’s resources—human and financial—are smallcompared to the task at hand. The International EnergyAgency estimates that developing and transition countriesneed $16 trillion of energy sector investments over2008–30 under “business as usual” operations—plus anadditional $5 trillion to shift to an ambitiously low-carbonpath (IEA 2009). Much more is needed for sustainableland and forest management and for urban transport. So aprime focus of this evaluation is how the WBG can get themost leverage—the widest positive impact on both developmentand climate change mitigation—from its limitedresources.Climate ContextClimate change is a threat to developmentClimate change threatens development (Parry and others2007; World Bank 2010). Most of this burden falls on developingcountries. Coastal areas will be exposed to inundation,flooding, and brackish water supplies. Snowmelt-fedwatersheds will face winter floods and summer droughts.Crop yields will fall in many areas. Infrastructure, designedto cope with an increasingly unpredictable climate, willbecome more expensive.Most of the climate change burden falls ondeveloping countries.Uncertainty about the magnitude of these impactsstrengthens rather than weakens the case for urgent action.To quantify this uncertainty, researchers (Sokolov and others2009) ran a climate change model under hundreds ofdifferent assumptions about economic growth, technicalchange, and climate response. The range of outcomesrepresents, in their view, the gamble that the world takesfrom inaction. They found that, absent climate mitigation,there is a 24 percent chance that average global temperatureswill rise this century by more than 6 degrees Celsius(13 degrees Fahrenheit). 1 A change of this magnitude,during the lifetime of many alive today, would be broadlycatastrophic.Managing climate risk requires urgent, globallycooperative actionTo mitigate these risks, the United Nations Framework Conventionon Climate Change (UNFCCC), to which virtuallyall countries subscribe, sets a goal of stabilizing the quantityof heat-trapping GHG in the atmosphere. Although preciselimits have not been agreed on, the 2009 CopenhagenAccord called for limiting the global increase in temperature(relative to preindustrial times) to 2 degrees Celsius, oftenequated with an atmospheric GHG concentration limit of450 CO 2-equivalent (CO 2e) parts per million. 2It will be difficult or impossible to achieve this goal withoutimmediate mitigation actions in all major emitting nations,according to 14 climate modeling exercises undertaken by10 independent research groups (Clarke and others 2009).(Mitigation refers to where action takes place rather than whofunds it.) Although developed countries have contributedmost of the atmospheric stock of GHGs and emit far moreper capita, developing countries account for about half thecurrent flow (see figure 1.1), and these emissions are growingrapidly. Even for less-ambitious stabilization targets,participation of middle-income countries is key to keepingFigure 1.1GHG emissions (including CO 2 ,CH 4 , N 2 O, PFCs, HFCs, SF 6 ), MtCO 2 e14,00012,00010,0008,0006,0004,0002,0000GHG Emissions by Sector andcountry Group, 2005PowerIndustrial energyand emissionsTransportationSectorNon-Annex ILand-use changeand forestryAgriculture andwasteAnnex ISource: WRI CAIT (version 7.0).Note: Annex I countries are the industrialized countries assignedemissions limits under the Kyoto Protocol. GHG = greenhouse gas.Introduction | 3
Page 1 and 2: Phase II: The Challenge of Low-Carb
Page 3 and 4: CLIMATE CHANGE AND THE WORLD BANK G
Page 5 and 6: Table of ContentsAbbreviations . .
Page 7 and 8: Figures1.1 GHG Emissions by Sector
Page 9 and 10: AcknowledgmentsThe report was prepa
Page 11 and 12: Executive SummaryUnabated, climate
Page 13 and 14: esettlement plans has been ineffect
Page 15 and 16: of some technologies, such as landf
Page 17 and 18: Scale up high-impact investmentsEne
Page 19 and 20: should have been strengthened in th
Page 21 and 22: Major monitorable IEGrecommendation
Page 23 and 24: Major monitorable IEGrecommendation
Page 25 and 26: Chairman’s Summary: Committee onD
Page 27 and 28: most places. Before we get there, w
Page 29 and 30: non-Annex I countries. The World Ba
Page 31 and 32: attention. In a couple of decades,
Page 33 and 34: GlossaryAdditionalityBankabilityBas
Page 35 and 36: Joint ImplementationA mechanism und
Page 37: Chapter 1evALuAtiOn HiGHLiGHts• T
Page 41 and 42: would allow industrialized countrie
Page 43 and 44: growth, poverty reduction (includin
Page 45 and 46: Table 1.1 Map of the EvaluationSect
Page 47 and 48: Chapter 2eValuaTION HIGHlIGHTS• W
Page 49 and 50: Table 2.2Evaluated World Bank Renew
Page 51 and 52: Figure 2.2Breakdown of 2003-08 Low-
Page 53 and 54: Table 2.4 Commitments to Grid-Conne
Page 55 and 56: Box 2.1The Economics of Grid-Connec
Page 57 and 58: on average (Iyadomi 2010). (Reducti
Page 59 and 60: and industrial policy. An increasin
Page 61 and 62: Table 2.6Hydropower Investments by
Page 63 and 64: costs for remaining unelectrified a
Page 65 and 66: World Bank experienceTwo factors ac
Page 67: Box 2.5On-Grid and Off-Grid Renewab
Page 70 and 71: Energy EfficiencyThe first phase in
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
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for Costa Rica for the period 2000-
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After 20 years of effort, systemati
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orrowers have demonstrated the abil
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Chapter 5EVALuATioN HigHLigHTS• O
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Consequently, the efficiency with w
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technologies could accelerate diffu
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A second issue, inherent to any adv
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goal of promoting wind turbine impr
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ConclusionsThe WBG’s efforts to p
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Table 5.1Carbon Funds at the World
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demonstration initiative. The Commu
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Impacts on technology transferThe 2
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Chapter 6Photo by Martin Wright/Ash
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Figure 6.1800Economic and Carbon Re
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Specifically, the WBG could:• Pla
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Table 6.1Summary of Sectoral Findin
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Table 6.1Sector Intervention Direct
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Appendix ARenewable Energy Tables a
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Table A.4Grid-Based Biomass/Biogass
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Table A.5 (continued)Negative examp
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Figure A.4A. Hydro/biomass capacity
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Appendix bWorld Bank Experience wit
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Table C.2Completed Low-Carbon Energ
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TAble C.4Reviewed energy efficiency
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the new capacity. Transmission syst
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Table E.2Climate obligationsCoal Pl
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Table F.2GHG objectiveModeNumber of
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IEG eliminated a few cases of doubl
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Table H.1Project andlocationBioener
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Appendix ICarbon and Economic Retur
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Appendix JRecent WBG Developments i
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y providing value to standing fores
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never had an explicit corporate str
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overnight. The Bank can provide ass
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Chapter 51. From the chief economis
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Hartshorn, G., P. Ferraro, and B. S
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______. 2007. World Development Ind
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IEG PublicationsAnalyzing the Effec
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