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climate finance

A new front in the climate fight: innovative finance

Miria Pigato's picture
 Innovate4Climate Finance & Markets Week. Photo: World Bank / Simone D. McCourtie


What does public debt have to do with combatting climate change?
 
A few years ago, this would have seemed a strange question, as debt management and climate policy have traditionally been regarded as unrelated fields. But at a workshop at the annual Debt Management Forum in Vienna on May 22, 2017, debt managers from 50 developing countries discussed the role of emerging debt instruments such as green bonds and blue bonds, in raising capital for climate-friendly projects that range from reforestation to renewable energy.

While green and blue bonds resemble more traditional debt instruments in terms of structure and returns, they represent a novel approach to climate finance. Created just ten years ago, the total value of green bonds has grown at a spectacular pace, reaching US$82.6 billion in 2016. By the end of 2017, the total value of green bonds will likely exceed US$100 billion.

2016: A unique opportunity to get it right on forests and climate change

Ellysar Baroudy's picture
Moniz Phu Khao Khouay, Vientiane Province
Forest monitoring efforts in Phu Khao Khouay, Vientiane Province, Laos PDR. Photo credit: Hannah McDonald

If ever there was a year to make significant progress on forest conservation and climate change, it was 2016. Coming on the heels of the historic COP21 Paris Agreement, 2016 was a year to demonstrate the commitment the World Bank Group has to support countries as they take forward their nationally determined contributions to address our global climate change challenge. It’s gratifying to look back on 2016 and feel that we contributed to harnessing this momentum and sense of urgency; especially in showing how sustainable land use, including sustainable forest management, is critical to achieving the ambitious targets set out in the Paris Agreement.

New climate finance model in Morocco rewards low-carbon policies

Venkata Ramana Putti's picture
 Koza1983


Morocco, the host of COP22 happening this week and next in Marrakech, is an example of a country that is working closely with the World Bank and other organizations to shift its economy onto a low carbon development path.

It just submitted its official climate plan, or nationally determined contribution, NDC, where it pledges a 42% reduction below business-as-usual emissions by 2030. This is 10 percentage points more ambitious than it previously laid out, ahead of Paris, and we see the plan affecting a growing number of sectors in the economy. Morocco plans a $13 billion expansion of wind, solar and hydroelectric power generation capacity and associated infrastructure that should see the country get 42% of its electricity from renewable sources by 2020, ramping up to 52% by 2030.

As the Paris Agreement becomes reality: How to transform economies through carbon pricing

Laura Tuck's picture


The remarkable pace at which nations of the world have ratified the Paris Agreement on climate change gives us all hope. It signals the world is ready to take the actions we need to keep global warming below 1.5 degrees Celsius. We know, however, that delivering on Paris comes with a high price tag, and that we need to help countries not just transition toward renewable energy but unlock the finance needed to get there.

Amid the enormous challenge ahead, I want to emphasize the transformative economic opportunity that putting a price on carbon pollution presents.

Latin America and the Caribbean: seizing a trillion dollar opportunity in climate investments

Christian Grossmann's picture
 Alessandra Bazan Testino / IFC
Green-bond supported wind farm in Penonome, Panama. Photo credit: Alessandra Bazan Testino / IFC 


First published by Capital Finance International.

Soon the world will celebrate the one-year anniversary of the historic climate agreement signed in Paris in December 2015. The agreement will be implemented through country-led greenhouse gas (GHG) emissions reduction commitments known as their intended Nationally Determined Contributions (NDCs), which to date have been submitted by 189 countries covering 95 percent of global GHG emissions. 
 
Apart from signaling concrete commitments, these reduction targets also offer a clear signpost of the investment direction countries need to follow as the global economy steers towards a low-carbon, climate-resilient pathway. Estimates point to between $57 trillion and $93 trillion in new low-carbon, climate resilient infrastructure investment by 2030.[1] How developing countries evaluate and respond to their infrastructure needs will greatly determine their ability to meet GHG reduction commitments.

Climate Investment Funds: The quiet motor behind our most impactful climate investments

John Roome's picture

It does not happen often that one of the finest actors of our time tweets about a World Bank supported project and invites all his fans to have a look at the impressive pictures taken from space. In fact, I can’t remember having seen that before.
 
But this is what Oscar winner and climate activist Leonardo DiCaprio did a few months ago when the Noor Concentrated Solar Plant (CSP) in Morocco—the largest CSP plant in the world - was opened. Once finalized, in two years, it will provide clean energy to 1.1 million households. I visited the plant two weeks ago and it is truly an impressive site. The indirect benefits of the project might even be larger: it has advanced an important and innovative technology, it has driven down costs of CSP, and it holds important lessons for how public and private sectors can work together in the future.
 
I am proud that the World Bank, jointly with the African Development Bank and a number of foreign investors, supported this cutting-edge solar energy project. But it was made possible thanks to the Climate Investment Funds (CIF), which put in US$435 million to “de-risk” the investment, playing an essential role to kickstart the deal. 

Using auctions to support climate and development outcomes

Scott Cantor's picture


Auctions are ubiquitous. On any given day, somewhere in the world, bidders compete for energy, wireless spectrum, used vehicles, agricultural products—the list goes on. Auctions can help resolve uncertainties in the market, convening buyers and sellers to help them achieve the best possible price for goods or services that are otherwise difficult to value.
 
Auctions can also resolve uncertainties in the development sector, identifying the projects most likely to succeed and determining the right level of funding. To test this hypothesis in the climate arena, the World Bank has been piloting an approach to incentivize green projects in developing countries. The Pilot Auction Facility for Methane and Climate Change Mitigation (PAF) held its second online auction earlier this month, allocating $20 million in funding directly to the private sector for projects reducing methane emissions.

4 questions, 4 answers. What’s next after the Paris agreement?

John Roome's picture



Today, April 22, 2016, marks a key moment for the world with the signing of the historic Paris climate change agreement. A record number of world leaders are expected in New York at the United Nations Headquarters for the high-level signing ceremony.

It’s a clear sign that people recognize that the changing climate is impacting us now – the recent record-breaking temperature, spread of infectious diseases, and climatic conditions, are increasingly alarming and must be dealt with before it’s too late. Now is the time for action and for countries and governments to deliver on their promises made in Paris.

I’ve answered some questions that will better help explain why the signing of the Paris Agreement is critical and how we in the World Bank Group are stepping up our efforts to help countries deliver on their pledges.

Stirred, not shaken: blended finance for climate action

Kruskaia Sierra-Escalante's picture
 Ivelina Taushanova / World Bank Group
Photo: Ivelina Taushanova / World Bank Group


Today, over 80 million tons of CO2 will be emitted from economies around the world. Tomorrow will be the same, as will the day after that. The emitted amounts of CO2 will likely stay in the atmosphere for hundreds, if not thousands of years, further compounding the challenges in reversing the current and expected effects of climate change.

This past December, in Paris, leaders of 195 nations of the world agreed that this trend must be reversed, signaling a historic turning point in the global fight against climate change. The Paris Agreement ratified a global consensus to limit the global average temperature rise to ‘well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’ Developing nations were at the forefront of this agreement, with almost every one of them setting carbon reduction goals. While the public sector will play a major role in helping achieve the ambitious targets, the sheer volume of investment required to support low-carbon energy, transportation, and agriculture projects throughout the developing world leaves a gap of hundreds of billions of dollars that only the private sector is in a position to fill.

Empowering a greener future

Mafalda Duarte's picture
CIF launches annual report that marks 2015 as year of achievements
 CIF
Photo: World Bank Group


This is Morocco’s Noor 1 concentrated solar power plant, the first phase of what will eventually be the largest concentrated solar power plant in the world. It is an impressive sight—visible even from space–and it holds the promise of supplying over 500 megawatts of power to over a million Moroccans by 2018. It also embodies the power of well-placed concessional financing to stimulate climate action. Low cost, long term financing totaling $435 million provided by the Climate Investment Funds (CIF) has served as a spark to attract the public and private investments needed to build this massive facility, and it is just one example of how the CIF is empowering a greener, more resilient future.

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