Transcript Energy & Climate

Investment Framework For Clean
Energy For Development
World Bank
1
Recent Events
 The Stern Report Issued October 30
 Focuses on the Economic Issues
 Builds on IEA, IPCC and World Bank
 Important Conclusions on Impact and Urgency
 International Energy Agency Issued WEO
 Focuses on Energy-Climate Change Nexus
 Agrees with Stern Report on Need and Urgency
 Identifies Energy Efficiency and Nuclear as Important
Options
2
Key Messages
 Worst impacts of climate change can be avoided, if we
take strong action now
 Strong and early action far outweigh the costs of not
acting
 Climate change could have very serious impacts on
growth and development
 Adaptation to climate change is essential.
3
Economic Costs from Stern Report
 Global temperature rises appear to be headed 1-2 degrees
C higher than expected
 Cost of inaction would result in long-term losses of global
GDP of at least 5% p.a.
 The cost of an aggressive greenhouse gas mitigation
scenario would result in GDP growth decrease of 1% p.a.
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Emissions Paths to Stabilization
Source: Stern Review on the
Economics of Climate Change
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Projected Impacts of Climate Change
Source: Stern Review on the
Economics of Climate Change
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Impacts on growth and development
 The impacts of climate change are not uniform: low income
countries will be harder hit than developed countries

Low income countries generally rely more on agriculture which is
susceptible to climate variation

Low levels of income/wealth limit opportunities to adapt

Geographic circumstances imply that impacts are likely to be
greater in poorer countries
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Global Emissions by Sector
Source: Stern
Review on the
Economics of
Climate Change
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The Proposed Investment Framework:
Three Pillars
Pillar 1 focuses on Energy for Development and Access for
the Poor: the Role of Energy in Economic Growth
and Poverty Reduction
Pillar 2 focuses on the cost-effective transition to a low
carbon economy
Pillar 3 focuses how to enhance resiliency to climate
variability and change, especially for the poor who
are the most vulnerable
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The Proposed Investment Framework:
Three Pillars – Key Conclusions
Pillar 1: Existing financial instruments are adequate, but energy
sector reform is needed to attract the required substantial
increase in grants and concessional funding and private
investments for access for the poor and electricity generation
Pillar 2: Existing financial instruments are not sufficient. A longterm global regulatory framework, with differentiated
responsibilities is needed; new financial mechanisms are needed
to buy down incremental costs and to mitigate regulatory risks
post-2012
Pillar 3: Existing financial instruments are adequate; but there is
a need to increase funding levels
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Conclusions
 Action on climate change is required across all
countries
 A range of options exists to cut emissions; but strong,
deliberate policy action is required
 Climate change demands an international response,
understanding of long-term goals and agreement on
frameworks for action.
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Next steps from the World Bank’s
perspective
 Initiate the climate-proofing of our own portfolio of
projects
 Develop tools to design climate-proof projects
(common process and methodology)
 Implement adaptation-focused country case studies
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