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Carbon Pricing – Delivering Economic & Climate Benefits

Thomas Kerr's picture

 TonyV3112/Shutterstock

A dangerously warming planet is not just an environmental challenge – it is a fundamental threat to efforts to end poverty, and it threatens to put prosperity out of the reach of millions of people.  Read the recent Fifth Assessment Report from the Intergovernmental Panel on Climate Change if you need further evidence.

If we agree it is an economic problem, what do we do about it?  There is general agreement among economists that a robust price on carbon is a key part of effective strategies to avert dangerous climate change. A strong price signal directs finance away from fossil fuels and toward a suite of cleaner, more efficient alternatives.

This logic is not lost on governments and companies.  Momentum is building around the globe to put a price on carbon.  Consider these facts:

What can we learn from public-private partnerships in the transport sector in Europe and Central Asia?

Vickram Cuttaree's picture
Private sector investment in Europe and Central Asia (ECA) is quite small, even accounting for the size of the individual countries’ economies. Despite integration within the European Union (EU), ECA countries have not attracted much private sector investment in the transport sector compared to other regions, such as Latin America or South Asia (four times more during 2009-13).
 
Mid-day traffic in Istanbul, Turkey
Mid-day traffic in Istanbul, Turkey

While public-private partnership (PPP) transport investment has been initially driven by countries (such as Poland, Croatia and Hungary) that implemented reforms to join the EU, most of them have not been able to close on transport PPP transactions in the past five years. Now Russia and Turkey are the leaders in the region, as explained below.

What can explain this situation?
A focus on off-balance sheet accounting of PPP projects has dominated transport PPP in EU-member ECA countries in recent years. Off-balance sheet accounting means PPP projects are structured in a way that only annual government payments are accounted for, instead of the total commitment (the assets and liabilities associated with the project). This means that PPP projects end up being large and greenfield (multi-billion dollar investment, typically in new highways), and tend to follow a separate path than for budget-financed projects, based on the assumption that the associated liabilities won’t be accounted for.

Risk allocation between the public and private sectors is driven by accounting treatment. This also results in limited support from governments and very rigid negotiations. It also means that projects are often not able to close or, as a former Minister of Transport said, “We do PPP to build off-balance sheet assets but, in order to reach financial close, assets has to be on our books.”

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Corruption 'impoverishes and kills millions'
BBC
An estimated $1tn (£600bn) a year is being taken out of poor countries and millions of lives are lost because of corruption, according to campaigners. A report by the anti-poverty organisation One says much of the progress made over the past two decades in tackling extreme poverty has been put at risk by corruption and crime. Corrupt activities include the use of phantom firms and money laundering. The report blames corruption for 3.6 million deaths every year. If action were taken to end secrecy that allows corruption to thrive - and if the recovered revenues were invested in health - the group calculates that many deaths could be prevented in low-income countries.
 
The Best and Worst Places to Build More Roads
Smithsonian
Roads are taking over the planet. By the middle of this century, so many new roadways are expected to appear that their combined length would circle Earth more than 600 times. To build critical connections while preserving biodiversity, we need a global road map, scientists argue today in the journal Nature. And as a first step, the international team has identified areas where new roads would be most useful and those where such development would likely be in conflict with nature.
 

How Trade Is Helping Haiti Recover and Grow its Economy

Calvin Djiofack Zebaze's picture

 Sun rising behind clouds in Haiti. Source - Yinan ChenThings are looking up in Haiti as the country continues to rebuild from the devastating 2010 earthquake. And part of this progress is a story of trade.

The Haitian government recognizes this, and is working with the World Bank Group and other donors to identify and remove barriers to trade to better promote export growth.

A World Bank team traveled to Port au Prince earlier this month for a week long workshop with the main stakeholders (public and private) intervening on trade logistic in the country, including the Ministry of Commerce and Industry, in order to discuss ways to strengthen the Haitian Trade Facilitation (TF) program. The program is funded through the Trade Facilitation Facility, a multi-donor trust fund dedicated specifically to helping developing countries realize economic development and poverty reduction through trade.
 

Big Challenges, Small States: Island Nations Come Together for Climate Action

Rachel Kyte's picture

New community buildings in Samoa

On Sunday in Apia, the capital of Samoa, I saw the results of the World Bank Group’s work with coastal communities that were devastated by the 2009 tsunami and by Cyclone Evan in 2012.  Working with the Samoan government and partners, we built coastal roads and a new system of access roads that leads into the hills away from the seashore. Many families rebuilt their homes in the hills, and the new road system helps bind those new households together as well as providing safe escape routes should a tsunami or major storm hit the coast again.
 
The hard infrastructure construction is interesting; the community conversations about next steps for protecting the coastlines are even more so. The government is launching a series of community consultations that will bring together village mayors, women leaders, government agencies, and NGOs to decide how best to climate-proof their coastlines. The communities are set to decide if sea walls or mangrove plantations will best protect their land and livelihood.  

I’m in Apia with a team from across the IFC and the World Bank to represent the World Bank Group at the 3rd UN Conference for Small Island Developing States and took the opportunity to learn more about climate and disaster risk management at the community level.
 
For island nations, the small size of their land and their economies comes with a set of unique vulnerabilities that makes climate change a major determinant of their ability to thrive and in some cases even survive.

Because there are more of us who want this to stop… Our experience taking on gender-based violence in public transport

Shomik Mehndiratta's picture
Follow the authors on Twitter: @shomik_raj and @aldotudela7
 
The room was quiet. The group sat, thoughtful, each one of the participants with their heads around a complicated issue, silent. Suddenly, one man stood up and spoke out, “We have to set something straight, there are more of us who want this to stop”. This sentiment, expressed during a focus group in Mexico City, has become a powerful anchor for an ongoing initiative we are undertaking to understand and address gender-based violence in public transport.

Personal security on and around Mexico City’s public transport system is a serious problem that frames the travel experience for many, particularly for women. A recent report by the Mexico City Women’s Institute showed that 65% of women using the system have suffered some form of sexual assault while on the system or when accessing it. However, there is little argument that only a fraction of these events are reported… which leads us to believe that the actual percentage could be much higher.

Co-creating solutions for smart cities

Victor Mulas's picture
Earlier this year, the World Bank partnered with Chile's Ministry of Transport and Telecommunication on a project to innovate technology and mobility solutions: Smart City Gran Concepción. So far, the project has met two milestones, ideation (in January) and formation of a diagnostic and strategic support plan (in March).

Last month, it was time for the project's third phase: a competition to surface new ideas for mass transit options, road safety and mobility information. This event, called the MueveTT Innovation Challenge, brought together 14 teams of people to brainstorm ways for the government, companies, universities, organizations, citizens, and others to work together toward the vision of smart cities.
 
Co-Creation of Solutions Competition

In Latin America, Hard Hats and Tools are no longer only for Men

Maria Margarita Nunez's picture

Women that have joined road maintenance has increased significantly.

While driving around rural areas of Puno in Peru, Caaguazú in Paraguay or Granada in Nicaragua, do not be surprised to see women lifting rocks from the roads and using shovels and picks alongside men.  In fact, in the past 15 years, the number of women that have joined organizations in charge of routine road maintenance in Latin America has increased significantly and with this their life conditions have improved dramatically.

This Week in #SouthAsiaDev: August 15, 2014

Mary Ongwen's picture
We've rounded up 36 tweets, posts, links, and +1's on South Asia-related development news, innovation and social good that caught our eye over the last two weeks. Countries included:Afghanistan, Bangladesh, India, Nepal, Pakistan and,

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