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Climate Change

Putting A Price on Carbon: Nations Opt For Market-Based Solutions

Xueman Wang's picture

 Curt Carnemark/World Bank

Climate change is a threat to global development and to poverty alleviation. And yet, reducing greenhouse gas emissions is proving difficult because all players in an economy contribute to the problem. To make a difference, we must reduce our emissions in a coordinated manner.

This is no easy task. So where do we go from here?

One approach involves pricing the “externalities” that are contributing to climate change. Pricing externalities into the costs of production is nothing new. A classic textbook example is the paper mill that sits upstream from a fishing village.

Discharge from the mill pollutes the river, diminishing the fishermen’s catch. The mill freely uses the water of the river in its production of paper, but does not pay for the damage of the negative externality that it causes. To remedy the situation, regulations can be put in place to stop waste from going into the river – or the mill can pay a fine equivalent to the loss of the fishermen’s revenue.

The latter is an example of an externality priced into the cost of production. The same can be done to combat climate change.

In this case, carbon emissions are the externality that must be priced. Doing so provides a cost-effective and efficient means to drive down greenhouse gas emissions as the cost of such pollution goes up.

Kenya Soil Carbon Project Points to the Future

Neeta Hooda's picture

 Curt Carnemark/World Bank

A few weeks ago, we passed a big milestone in the World Bank Group’s climate change and development work. For the first time, small-scale farmers earned carbon credits from an agricultural land management project.

The project in western Kenya kicked off what will surely be many more soil carbon projects in coming years. It also shows how sustainable farming (such as increased mulching and less tilling) can be part of the global effort to reduce greenhouse gas emissions – while improving livelihoods for poor, rural families.

The soil carbon project, made possible by an accounting system for low-carbon farming approved in 2011, took several years to prepare and implement. I had the fortune to be right there, working with farmers on the ground in Kenya and trying to understand their reality.

Thousands Join the MOOC on Climate Change

Peter Schierl's picture

 

More than 10,000 people from around the world have already signed up for the World Bank Group’s first MOOC (Massive Online Open Course) on climate change, an initiative that appears to be tapping into a younger-than-usual audience than our e-courses usually get.

We’ve been excited to see this participant data because we know that for the world to effectively be able to address climate change, young people must be well-informed and engaged. We’re also pleased that most people who registered so far come from developing nations – and that many are joining an e-course for the first time.

The MOOC course, titled Turn Down the Heat: Why a 4°C Warmer World Must be Avoided, is based on a recent research report with the same name that the Bank commissioned from the Potsdam Institute for Climate Impact Research.

The course kicks off Monday, January 27, and will be delivered on an online platform hosted by Coursera, an education company that partners with top universities and organizations to offer courses for free.

Transforming Transportation in Our Polluted, Congested Cities

Karin Rives's picture

 Kim Eun Yeul / World Bank

Cities are the world’s engines of economic growth, but they also account for 70 percent of global greenhouse gas emissions and many metropolitan areas struggle with traffic congestion, lost productivity, public health problems and traffic deaths due to inadequate public transportation.

How can we make our cities livable, inclusive, prosperous and green?

With an Eye Toward the Future: Building Resilience in a Changing World

Habiba Gitay's picture

 Chatchai Somwat/Shutterstock

Typhoon Haiyan, the Category 5 super storm that devastated parts of the Philippines and killed thousands late last year, continues to remind us, tragically, of how vulnerable we are to weather-related disasters.

As the images of destruction and desperation continue to circle the globe, we’re also reminded that those most at risk when natural disaster strikes are the world’s poor – people who have little money to help them recover and who lack food security, access to clean water, sanitation and health services.

Over the last year, as one major extreme weather event after another wreaked havoc and claimed lives in the developing world, terms such as "resilience" and "loss and damage" have become part and parcel of our efforts here at the World Bank Group – and for good reason.

Developing countries have been facing mounting losses from floods, storms and droughts. Looking ahead, it’s been estimated that up to 325 million extremely poor people could be living in the 49 most hazard-prone countries in 2030, the majority in South Asia and Sub-Saharan Africa.

These scenarios are not compatible with the World Bank Group’s goal to reduce extreme poverty to less than 3 percent by 2030, or with our goal to promote shared prosperity.

Why We Must Engage the Private Sector in Climate Change Adaptation Efforts

Alan Miller's picture

 Lauren Day/World Bank

Late last month, I retired after spending more than 30 years in the climate arena, the last decade as a principal climate change specialist at the International Finance Corporation.

During the span of my career, climate change has moved from the sidelines to be recognized as a serious development challenge. And while we’re still far from achieving the international commitments needed to avoid potentially dangerous and even catastrophic climate events, much has been accomplished.

Scientists have reached near-consensus about climate change and its impacts. We’ve also seen the creation of several significant donor-supported climate funds, as well as a steady increase in policy and financial support for climate-friendly technologies.

In one critical respect, however, we need more progress: making the private sector a partner in helping nations build resilience and adapt to climate change.

New Funding to Expand Carbon Finance in Low-Income Countries

Brice Jean Marie Quesnel's picture





One of the few bright spots at the recent UN climate talks in Warsaw was the announcement of new financial commitments to the World Bank’s BioCarbon Fund.

Coming hard on the heels of that groundbreaking initiative for sustainable forest landscapes is another piece of good news in international efforts to bring more carbon finance to low-income nations.

The governments of the United Kingdom and Sweden and the Switzerland-based Climate Cent Foundation have pledged more than $125 million for the World Bank’s Carbon Initiative for Development (Ci-Dev), a financial initiative that, like the third tranche of the BioCarbon Fund, will help the least-developed countries access financing for low-carbon investments.

More specifically, the new funding allows the World Bank to focus on helping the world’s poorest countries – especially in Africa – access carbon finance to develop clean energy sources.

It will enable the development and scaling up of a diverse range of projects similar to household biogas systems in Nepal or solar home systems in Bangladesh. It’s also an example of how the World Bank continues its efforts to mobilize private-sector investments for clean development and climate mitigation.

We’re showing, through actions on the ground, that putting a price on carbon is a key part of the solution to the climate challenge.

Rachel Kyte on “The Good News and Bad News on Agriculture and Climate Change”

Karin Rives's picture

Climate-smart agriculture


At the climate talks last month in Warsaw, Poland, negotiators again delayed discussions around agriculture. The good news is that there are steps we can take now to make agriculture part of the solution, World Bank Vice President for Sustainable Development Rachel Kyte writes in a new blog post.

"Agriculture is the only sector that can not only mitigate, but also take carbon out of the atmosphere. It has the potential to substantially sequester global carbon dioxide emissions in the soils of croplands, grazing lands, and rangelands," Kyte writes. Importantly, she says, climate-smart agriculture techniques also improve crop yields, nutritional value, food security, and farmers' incomes, at the same time.

The potential is enormous, she writes. Read the full blog post.

Treading Water While Sea Levels Rise

Rachel Kyte's picture
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 UNFCCC/Flickr

At the UN climate talks that ended wearily on Saturday night in Warsaw, negotiators showed little appetite for making firm climate finance commitments or promising ambitious climate action. But they did succeed, again, in keeping hope alive for a 2015 agreement.

The final outcome was a broad framework agreement that outlines a system for pledging emissions cuts and a new mechanism to tackle loss and damage. There were new pledges and payments for reducing deforestation through REDD+ and for the Adaptation Fund, however the meeting did little more than avoid creating roadblocks on the road to a Paris agreement in 2015. In one of the few new financial commitments, the United Kingdom, Norway, and the United States together contributed $280 million to building sustainable landscapes through the BioCarbon Fund set up by the World Bank Group.

At the same time, COP19 was an increasingly emotional Conference of Parties to the UN Framework Convention on Climate Change. The overture to this round of climate drama was provided by Typhoon Haiyan. Haiyan added, sadly, more to the mounting evidence of the costs of failure in tackling climate change. The language is inexorably moving towards one of solidarity, of justice. But for the moment, this framing is insufficient to prevent emission reduction commitments from moving backwards.

And yet again, as was the case in the climate conferences in Cancun, Durban, Doha, and now Warsaw, outside the official negotiations, there is growing pragmatic climate action driven by climate leaders from every walk of life.

The sense of urgency and opportunity is building, it just fails to translate into textual agreement.

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