We’re about 16 months away from the 2015 UN climate meeting in Paris, intended to reach an ambitious global agreement on climate change. Now, more than ever, there is a need for innovation to scale up climate action.
The Bank’s Carbon Partnership Facility (CPF) is helping blaze that trail.
The role of the CPF is to innovate in scaling up carbon crediting programs that promote sustainable, low-carbon economic growth in developing countries. In its first set of programs, the CPF moved past the project-by-project approach to larger scale through the Clean Development Mechanism’s Programme of Activities, catalyzing investment in methane capture from landfills, small-scale renewable energy, and energy efficiency.
Through the CPF, a partnership is created between the "Buyer Participants" – the governments of Spain, Norway and Sweden and the "Seller Participants" – governments in developing countries across the world, including Brazil, Morocco, Vietnam, Thailand, Tanzania, Egypt, and the Philippines. The CPF supports the Sellers in preparing a carbon crediting framework for emission reduction programs and then purchases carbon credits that are generated by the investments on behalf of the Buyers. In many cases, the carbon finance program is linked to a Bank lending operation that provides financing for the underlying investments.
For example, in Brazil, our Seller Participant CAIXA has financed the construction of a new, environmentally sound landfill in Rio de Janeiro where methane is captured from the garbage. It closed down an old dump closer to the city, which did not. This approach is being replicated at other sites in Brazil and CAIXA is the coordinating and managing entity of the activity, under which the projects will generate emission reductions, creating a revenue stream which makes them more financially sustainable. Electricity can be generated from the captured methane, multiplying the benefits of these modern landfills.
The CPF programs are technically challenging and require technical assistance to support the Sellers in building programs and monitoring the actual emission reductions. In April this year, we hosted a three day training program for the sellers that focused on these elements, where each of the sellers working on solid waste (Brazil, Morocco, Philippines) and renewable energy (Vietnam, Tanzania) shared experiences and learned from each other.
Building on this experience, we are looking beyond CDM Programmes of Activities and have started working to identify candidate pilot programs for new scaled-up crediting modalities being discussed by the UNFCCC. These programs will target broader aggregates of the economy, focusing on sector and economy-wide approaches, as well as developing innovative crediting frameworks for urban and policy-based emission reduction initiatives. Early concepts were presented to the CPF participants at its recent annual meeting.
This initiative also builds from the Partnership for Market Readiness, a global partnership of developed and developing countries that provides funding and technical assistance for the innovation and piloting of market-based instruments for greenhouse gas emissions reduction. Our plan is to support the development and implementation of a series of pilots over the next several years to provide practical experience in various sectors and technologies, such as renewable energy and energy efficiency, and to use these lessons to help shape the role of market mechanisms that will be needed in any future climate regime.
Photo: The Energy Efficient Street Lighting Program in Thailand, another CPF and Programme of Activities project, uses LEDs to reduce lighting energy use by an expected 65 percent. Carbon Partnership Facility
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