Carbon governance—the institutional arrangements in place for mitigating greenhouse gas emissions—can vary considerably across countries. In Brazil, the financial community is actively interested in carbon trading, but Chinese banks have hardly any interest in it. In India, the Clean Development Mechanism (CDM) market is developed almost uniquely by domestic companies, while China relies extensively on foreign firms. And while the Chinese government takes an active interest in providing capacity to project developers, the Brazilian authorities see their role uniquely as guarantors of environmental integrity of emissions reductions projects. So, if carbon is the same everywhere, why is carbon governance so incredibly varied?
|An IFC investment helps provide clean, affordable water to underserved communities in developing countries.|
Many of the measures proposed in the World Development Report (WDR) 2010 will require substantial engagement with the private sector. The UN Framework Convention on Climate Change has estimated that more than 80 percent of the investment required for climate change mitigation and adaptation will have to be privately financed. For this to happen, the key requirement will be meaningful targets and supportive public policies.
One area in which private initiative will be critical is in the development and dissemination of new climate friendly technology. As the advance edition of the WDR states, "Technological innovation and its associated institutional adjustments are key to managing climate change at reasonable cost. . . . Mobilizing technology and fostering innovation on an adequate scale will require that countries not only cooperate and pool their resources but also craft domestic policies that promote a supportive knowledge infrastructure and business environment."
For several reasons, an increased focus on accelerating new technology is urgently needed.
A year ago I was assigned from a World Bank operations team providing support to countries in Europe and Central Asia on energy, climate mitigation and adaptation to work in a Bank administered trust fund, the Energy Sector Management Assistance Program (ESMAP), as a thematic coordinator for energy and climate change in this program. One of my roles is to coordinate a program that is providing support to six emerging economies—Brazil, China, India, Indonesia, Mexico and South Africa—that are proactively seeking to identify opportunities and related financial, technical and policy requirements to move towards a low carbon growth path.
The program has been underway for two years and individual country studies have been managed by World Bank operational teams. The governments of these countries have initiated country-specific studies to assess their goals and development priorities, in conjunction with greenhouse gas (GHG) mitigation opportunities, and examine the additional costs and benefits of lower carbon growth. This requires analysis of various development pathways—policy and investment options that contribute to growth and development objectives while moderating increases in GHG emissions.