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Faster track to better carbon prices

Grzegorz Peszko's picture
Carbon pricing instruments implemented or scheduled for implementation,
with sectoral coverage and GHG emissions covered.


​Many of my compatriots in Poland, where over 90 percent of power generation comes from burning coal, are concerned that the EU climate policy is a risky outlier.

​They worry that the EU Emissions Trading System may expose domestic industry to unfair competitition and cause companies to move production to countries where emission costs are lower, something called “leakage”.

The two reports recently released by the World Bank may change this perception.

Putting a price on carbon, one jurisdiction at a time

Thomas Kerr's picture
CPLC Design Meeting at World Bank Group Headquarters
Credits: Max Thabiso Edkins


This week, the World Bank Group released the latest version of our annual State and Trends of Carbon Pricing report. It reports that today,39 nations and 23 cities, states or regions are using a carbon price.

​This represents the equivalent of about 7 billion tons of carbon dioxide, or 12 percent of annual global greenhouse gas emissions.

East Asia’s challenge: ensuring that growth helps poor

Axel van Trotsenburg's picture

Unprecedented economic growth in the last three decades propelled East Asia into an economic powerhouse responsible for a quarter of the world’s economy.

Hundreds of millions of people across the region, including in China, Indonesia, Malaysia, Thailand and Vietnam, lifted themselves out of extreme poverty and enjoyed greater prosperity, largely because of more labor-intensive and inclusive growth.

The success didn’t come without challenges. As of last year, 100 million people in East Asia still live on $1.25 a day. About 260 million still live on $2 a day or less, and they could fall back into poverty if the global economy takes a turn for the worse or if they face health, food and other shocks at home. Their uncertain future shows the increasing inequality of East Asia’s galloping growth.

In India, the great — yet unexplored — potential of inland water transportation

Shivika Singh's picture
Most of us attendees were novices in the area of inland water transportation in India and were curious to know what Arnab Bandyopadhay, Senior Transport Engineer at the World Bank’s India country office would say.

 
Indian waterways
Indian waterways. Photo credit: World Bank


Emissions trading in China: Early lessons from low-carbon pilots

Lasse Ringius's picture

 

A local emissions exchange in China. Lasse Ringius/IFC
A local emissions exchange in China. Photo: Lasse Ringius/IFC

 

China, the biggest source of CO2 emissions globally, accounts for more than 27 percent of the world's emissions. China is the first developing country to control CO2 emissions through a cap-and-trade system. Once a national carbon market is established, which could be as early as 2017, China will overtake the European Union (EU) to become the biggest carbon market in the world. The Chinese market will significantly alter the balance of power in global carbon markets in the mid-term. Significant challenges remain, and the IFC, a member of the World Bank Group, is helping China to overcome them with a project in Shenzhen that addresses key barriers to carbon trading.

Fundamentals of Emissions Markets

Once a liquid carbon market has been created, trading will mostly happen via forward and futures contracts. These instruments help companies to protect themselves against volatile prices and to hedge their carbon position. In the EU, exchange platforms emerged as one of the main mechanisms aimed at simplifying transactions, reducing risk and facilitating transparent pricing. As trading platforms, exchanges can facilitate price discovery and offer hedging products.

The financial sector and financial institutions (FI) play a fundamentally important role in an emissions trading system. It is to be expected that most companies in China will trade with the help of intermediaries; only large emitters will trade directly at an exchange. Thus, FIs will be in a position to offer trading-related services, as well as advisory products, to clients subject to mandatory CO2 regulation.

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Valerie Lorena's picture

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A boat trip from Port Elizabeth to Kingstown, in the Caribbean country of Saint Vincent and the Grenadines, is a one-hour trip that locals take several times a day. It was during one of these journeys that the boat of Kamara Jerome, a young Vincentian fisherman, ran out of gas six miles from Bequia City in what is termed locally as the "Bequia Channel." While waiting for help with strong wind gusts and the sun on his head, the idea of developing a boat that would run with wind and solar energy was born. Soon after, the idea became a prototype; a boat using green technology was on the water making 20-year-old Jerome a winner of international innovation competitions and a role model to other Caribbean youth. 
 
In Mexico, young engineer Daniel Gomez runs a multimillion bio-diesel company originally conceived as a research project for his high school chemistry class. Gomez and his partners - Guillermo Colunga, Antonio Lopez, and Mauricio Pareja - founded SOLBEN (Solutions in bio-energy in Spanish) in their early twenties. 
 
Although Daniel and Kamara have different educational backgrounds, they do share one important skill, the ability to identify a problem, develop an innovative solution, and take it to the market. In other words, being an entrepreneur, an alternative to be economically active, that seems to work and not only for a few.

When China met Africa

Tehmina S. Khan's picture
China’s expanding presence in Sub-Saharan Africa has been a major catalyst for growth in the region. Contrary to widespread opinion, its engagement covers all aspects of development. Stronger domestic policies will help countries in the region increase the gains from this growing partnership.

On booms and super-cycles: China and India's central role in global commodity markets

John Baffes's picture
Global commodity prices underwent an exceptionally strong and sustained boom beginning in 2000. Unlike a typical price cycle, this boom has been characterized as a “super cycle”, i.e., a demand-driven surge in commodity prices lasting possibly decades rather than years. Many researchers say this is the fourth “super cycle” of the past 150 years. The price super cycle has been attributed to strong growth in emerging markets.

What you need to know about energy and poverty

Sri Mulyani Indrawati's picture
Portable solar systems in rural Mongolia © Dave Lawrence/World Bank


First, we need to address “energy poverty” if we want to end poverty.

We find that energy poverty means two things: Poor people are the least likely to have access to power. And they are more likely to remain poor if they stay unconnected.

Around one in seven, or 1.1 billion people, don’t have access to electricity, and almost 3 billion still cook with polluting fuels like kerosene, wood, charcoal, and dung.

How to make zones work better in Africa?

Cecile Fruman's picture

Sub-Saharan Arica has launched a new wave of “special economic zones” (SEZs), with more and more countries establishing or planning to establish SEZs or industrial parks. However, can Africa overcome the past stigma and make the zone programs truly successful?

This was one of the hot topics during the China-Africa “Investing in Africa Forum,” held in Addis Ababa, Ethiopia, from June 30 to July 1, organized by the World Bank Group with the government of Ethiopia, the government of China, the China Development Bank and UNIDO.
 
Why did the the African zones fail, in the past, to attract many investors? My answer was they were not truly “special” in terms of business environment and infrastructure provisions, and many constraints were not significantly improved inside the zones. This analysis was supported by another panelist, His Excellency Dr. Arkebe Oqubay, Senior Advisor to the Prime Minister of Ethiopia. According to Dr. Oqubay, past zones in Africa were “missing the ‘basics’ such as power, water and one-stop services, and were not aligned with national development strategy.”

That viewpoint was shared by almost all the other panelists, which included senior African and Chinese officials and international experts at the SEZ session, which was characterized with candid discussions and greatly benefited from the background paper prepared by Douglas Zeng of the World Bank Group’s Trade and Competitiveness Global Practice.


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