Carbon Expo versus Bonn

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ImageI have recently returned from CarbonExpo in Cologne, along with most of the unprecedented 70-person Bank delegation we sent this year.  For the uninitiated, CarbonExpo is an annual, oh, call it a high-energy trade fair, where carbon finance project developers, financial institutions, auditors, policy makers, and international organizations meet to strike deals and innovate ways to reduce greenhouse gas emissions and finance those reductions. Honestly, it is the best time you could ever hope to have when you are in the complex and crazy world of carbon finance.

Now, every year, in stark contrast to the entrepreneurial energy of CarbonExpo, a very different event immediately follows – the formal climate negotiations in Bonn, where policymakers meet in closed-door meetings, arguing over frameworks and commas, targets and word choice. The meetings are slow, laborious, and political, but because the ramifications of these negotiations can be very significant, this process, one that eschews rash or heavily biased decisions, is not necessarily a bad one. 

Of course, that said, unless real glimmers of progress arise soon (and it was been a while), the breathable space within which the creative energy of CarbonExpo participants have to work will become increasingly restrictive -- the tolerance of investors and entrepreneurs for uncertainty runs only so deep.

From a transport sector perspective, the contrast between these two events, and the persons that attend them, is very interesting. Other than a couple presentations and side event I had organized on behalf of the Bank’s Carbon Finance Unit, where speakers discussed “Post-2012” climate-based finance mechanisms that could support low-carbon growth strategies in the transport sector,  the transport sector was entirely absent from the Expo. Why is there no market interest in an area where we can expect tremendous investment in the coming years and an area where we can achieve significant energy savings (see Transport Energy Consumption Trends - Three Trajectories)? Where are all the transport players?

Ah, they are in Bonn!

While CarbonExpo had, out of thousands of participants, maybe four who focus exclusively on transport sector issues, there will be at least 50 at Bonn, if not more. But doing what, exactly? Since the climate negotiations are closed-door affairs, outside attendees are in the curious position of being relegated to hanging out in hallways, hoping to catch negotiators during breaks for pieces of news or solicitations for advice. Many of the transport attendees will meet among themselves to discuss grant-supported development of low carbon transport projects – something that doesn’t really come up in a market-driven place like CarbonExpo – which really gets to the heart of the thing. 

Today, there are virtually no performance-based market mechanisms to support low carbon transport programs (and I don’t mean a BRT corridor here or there – I mean comprehensive planning, policy, and investment strategies undertaken by developing countries that could result in significant, measureable energy-efficiency improvements over time). Support for these schemes would likely have to be provided in part through transfers to the developing countries -- whether through grant-assistance, concessional finance, or new market mechanisms. And to effectively establish these systems, and to leverage the millions of dollars that will supposedly be made available by developed countries in coming years for such low-carbon investments in developing countries, the international advocates for sustainable transport development (you know who you are) will need to present a unified voice and position to the negotiators. The advocates will help negotiators understand the inability of the CDM mechanism to support comprehensive strategies for energy efficient transport systems and provide recommendations for realistic and sustainable mechanisms for moving forward (i.e., mechanisms that we can throw at the folks at CarbonExpo to carry forward, rather than mechanisms that lock up funding and innovation into a the hands of a few international organizations and non-profits). That is, assuming the advocates can capture an active audience.

Can this level of collaboration between NGOs and international organizations to present a set of comprehensive, unified proposals be achieved? What should the advocates push for? Should the market players from Expo be more closely involved in the process in Bonn?

We at the Bank have our ideas for supporting low carbon growth in transport and are working with our partners to push some of these initiatives forward – but I am interested in learning what types of mechanisms *you* would like to see moving forward…


Holly Krambeck

Senior Transport Economist

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