Transcript Towards A Strategic Framework on Climate Change

Towards a Strategic Framework on
Climate Change and Development
for the World Bank Group
www.worldbank.org/climateconsult
June 4, 2008
Washington D.C.
1
Climate Change is a Development Issue
• Developing countries are already being
affected
• The poorest countries and communities
stand to suffer the earliest and the most
• Development gains and achievement of the
Millennium Development Goals are at risk
• Lower carbon and climate resilient growth
offers opportunities for sustainable
development with multiple benefits
2
Developing Countries Most At Risk:
6 Climate Threats
Drought
Flood
Storm
Coastal 1m
Coastal 5m
Agriculture
Malawi
Bangladesh
Philippines
All low-lying Island
States
All low-lying Island
States
Sudan
Ethiopia
China
Bangladesh
Vietnam
Netherlands
Senegal
Zimbabwe
India
Madagascar
Egypt
Japan
Zimbabwe
India
Cambodia
Vietnam
Tunisia
Bangladesh
Mali
Mozambique
Mozambique
Moldova
Indonesia
Philippines
Zambia
Niger
Laos
Mongolia
Mauritania
Egypt
Morocco
Mauritania
Pakistan
Haiti
China
Brazil
Niger
Eritrea
Sri Lanka
Samoa
Mexico
Venezuela
India
Sudan
Thailand
Tonga
Myanmar
Senegal
Malawi
Chad
Vietnam
China
Bangladesh
Fiji
Algeria
Kenya
Benin
Honduras
Senegal
Vietnam
Ethiopia
Iran
Rwanda
Fiji
Libya
Denmark
Pakistan
Low Income
Middle Income
Source: World Bank
3
Adaptation Challenges Over Time Will
Depend on Mitigation Progress
Likely change
already
“baked in”
Likely change with
successful
mitigation action
Risk of catastrophic events increases with temperature
Likely change without
significant action on
mitigation
4
Potential Impact on Agriculture — Projected Percentage
Change in Agricultural Productivity in 2080
Note: Scenario: SRES A2.
Source: Cline 2007.
5
Sources of GHG are cross-sectoral and most
significant from energy and land use change
6
Regional Impacts
Africa
• Food security and risk associated with
agricultural production
• Lack of access to safe water and increased
water stress
• Low adaptive capacity and high vulnerability to
climate variability and natural disasters such as
droughts and floods
• Negative health impacts, especially increased
risk of malaria
• Sea-level rise and its impact on low-lying coastal
areas
*Source: Concept Paper Annex 1
7
Regional Impacts
East Asia and Pacific
• Decreased freshwater availability
• Endemic morbidity and mortality due to diarrhoeal
disease associated with floods and droughts
• Degradation of marine and coastal ecosystems by sealevel rise and temperature increases
• Sea-level rise potential results in displacement of
millions of people
• Damage to aquaculture industry by sea water intrusion
• Increased threats to the ecological stability of wetlands,
mangroves and coral reefs
*Source: Concept Paper Annex 1
8
Regional Impacts
Europe and Central Asia
• Increased climate-related hazards including
prolonged droughts, more frequent storms and
floods, and fire risk
• Coastal Floods and erosion due to sea-level rise
• Increased health risks due to more frequent
heatwaves, flooding and greater exposure to
vector- and food-borne diseases
• High water stress
• Decline of forest productivity
*Source: Concept Paper Annex 1
9
Regional Impacts
Latin America and the Caribbean
• Decreased water availability in many water
scarce regions and impact on high mountain
ecosystems
• Reduction in agricultural productivity
• Distortion of the functioning of ecosystems,
including coral reefs, wetlands and mangrove,
and forests
• Large-scale displacement of populations due to
increased extreme events and sea-level rise
• Health impacts e.g., heat stress mortality and
greater exposure to vector-borne diseases
*Source: Concept Paper Annex 1
10
Regional Impacts
Middle East and North Africa
• Increased occurrence of droughts and water
scarcity
• Greater fluctuation of agricultural yields,
especially in rain-fed areas
• Worsening of public health due to heat waves,
decreasing water and air quality, and ground
ozone formation
• Sea-level rise and its impacts on agricultural,
low-lying coastal areas and wetlands
*Source: Concept Paper Annex 1
11
Regional Impacts
South Asia
• Increased intensity and frequency of storm surges,
cyclones, floods and droughts
• Negative impact on agricultural yields particularly in arid
zones and flood-affected areas
• Decrease in river flows in the Himalayan countries,
unreliable supplies of fresh water and the need for
management of shared transboundary systems
• Sea-level rise and its impact on coastal livelihood
through flood, damage to groundwater aquifers, loss of
wetlands and ecosystems
• Lack of scientific information on the consequences of
Himalayan snow melt and associated risks and climate
change impact on biodiversity and ecosystems
*Source: Concept Paper Annex 1
12
Climate Change is not new for the World Bank
• 1993 –
•
•
•
•
Began implementing / leveraging GEF
funding for climate change
1999 –
Pioneered Carbon Finance through $180
million Prototype Carbon Fund
1999 –
”Fuel for Thought” Environment Strategy for
the Energy Sector
2001 –
Adopted Environment Strategy with climate
change pillar
2006-08 – Clean Energy Investment Framework (CEIF):
• (i) increased access to energy, especially in Sub-Saharan Africa; (ii)
accelerated transition to a low carbon energy economy; and (iii)
adaptation to climate variability and change.
• 2007 –
IDA and Climate Change Paper
13
Recent progress in climate change
• Share of support for low-carbon energy projects up from
28% in FY03–05 to 40% in Fy06-08, with an overall
increase in energy lending from $6 billion to $11 billion
– GEF and Carbon Finance (CF) contributed US$546 million, or 13
%, with significant leveraging
• RE and EE lending exceeded Bonn commitment 1.5 years
ahead of schedule
• CF business grown to $2 billion, with two new facilities CPF and FCPF- approved in September 2007
• Low carbon growth and adaptation studies
• Pilot program to begin measuring GHG emissions of the
WBG lending portfolio is underway.
• Strengthened partnership with MDBs
14
Access and Low Carbon Energy
• Providing Energy Services for A Better Quality
of Life.
• Worldwide, nearly 2.4 billion people use traditional biomass
fuels—wood, agricultural residues, and dung—for cooking
and heating
• Nearly 1.6 billion do not have access to electricity.
• Four out of five people without access to electricity live in
rural areas
• Without access to modern and sustainable energy
services, poor people are deprived of opportunities for
economic development and improved living standards.
15
GEF and WBG Synergies
• GEF grant funding to pilot innovative approaches and
capacity building for mitigation
• GEF funding is necessary to proceed with adaptation
mainstreaming in development and to build knowledge
base
– GEF Trust Fund Strategic Priority on Adaptation $50
million (committed)
– Voluntary Funds: Special Climate Change Fund ($90
million) & Least Developed Countries Fund ($180
million)
• Adaptation Fund (GEF-administered): $500- 800 mlln by
2012
• GEF helped leverage progress with WBG low
carbon investments
16
Key message: Scaling up!
• Huge financing gap for developing countries, much
beyond current funding under UNFCCC
– mitigation: up to US$ 100 blln per year by 2030
– adaptation: up to US$ 30-70 blln per year 2030
– private sector to account for 80% at least of financial and
investment flows
• The challenges ahead in mobilizing financing at
scale
• Massive technology, capacity and knowledge
needs
17
How we will develop a comprehensive Strategic Framework
on Climate Change and Development (SFCCD)
 Neutrality to UNFCCC Negotiations
 Flexibility to accommodate new
developments
 Working with Multiple Partners
 Inclusive and Consultative Process
18
Neutrality to UNFCCC Negotiations
– Neutral to any party position
– Helping countries understand the impacts
Piloting innovative instruments and
approaches that help inform the development
of a future regime (e.g. IDA15 as a platform
for mainstreaming adaptation, Carbon
Finance, Climate Investment Funds)
– Advocacy and capacity building
19
Flexibility to Accommodate New Developments
• The Strategic
• It will pilot and test
Framework will evolve
new approaches and
as international
benefit from learning
negotiations and
and on-going
scientific knowledge
consultations with
and experience on
various stakeholders
the ground evolve
20
Working With Multiple Partners
• UN agencies, UNFCCC Secretariat, Global Environment
Facility (GEF)
– A common UN-system approach to Climate Change
– Building blocks: mitigation, adaptation, technology, finance
• Multilateral Development Banks
– Have worked closely on Clean Energy Investment Framework
• Bi-lateral donors
• Initiatives by countries, sub-national (city) governments,
private sector, Non-Governmental Organizations
 Scaling up World Bank Group engagement based on its
specific comparative advantages
21
Sources of GHG Emissions in Developing Countries
GHG Emissions by Sector, IBRD-IDA Countries
Transportation
6%
Waste
3%
Total IBRD-IDA Lending by Sector, FY07
Financial & PSD
8%
Electricity &
Heat
20%
Energy & Mining
5%
Other
40%
Land-Use
Change &
Forestry
32%
Transport
19%
Industry
13%
Urban
Development
6%
Other
11%
Agriculture
15%
Agriculture &
Rural
Development
12%
Water
10%
World Bank lending is in sectors with largest
opportunities for both adaptation and mitigation
22
… similar situation in IFC & MIGA portfolios
IFC IFC
investment
by Sector ($ mln), FY07
Investm ent by Sector ($ m illion), FY07
Other
13%
Infrastructure
17%
MIGA MIGA
Guarantees
bySector
Sector
($ mln),
Guarantees by
($ m illion),
FY07 FY07
Financial
24%
Accommodation &
tourism services
2%
Infrastructure
44%
Oil, gas, mining &
chemicals
10%
Finance &
insurance
40%
Agriculture &
forestry
2%
Manufacturinig &
industry
16%
Oil, gas & mining
12%
Manufacturing
10%
Agribusiness
2%
Tourism,
construction &
services
8%
23
Climate change: Role of the WBG
SFCCD is about development
in the context of climate change
• Priority of growth, poverty
reduction and MDGs
• Importance of meeting
energy needs of developing
countries
• Development imperative of
helping to adapt to climate
risks
• Resource mobilization in
addition to the current ODA
levels
24
6 Action Pillars
1. Make effective climate action – both adaptation and
mitigation – part of core development efforts
2. Address the resource gap through existing and
innovative instruments for concessional finance
3. Facilitate the development of innovative market
mechanisms
4. Create enabling environment for and leveraging private
sector finance
5. Accelerate the deployment of existing and development
of new climate-friendly technologies
6. Step-up policy research, knowledge management and
capacity building
25
Integrating climate action in development
• Country-driven approach
– Customized to adaptation needs and low carbon growth
opportunities in a country-specific context
• Multi-sector engagement based on demand
• Tailor to the needs of both public sector (WB) and
private sector (IFC) clients
• Focus on multiple benefits and development
opportunities of climate action
• Attention to social dimensions: understanding the
needs of vulnerable groups, indigenous
communities, e.g. support for recognition of
ownership rights
• Support to local institutions
26
Pillar 1
1. Make effective climate action – both adaptation and
mitigation - part of core development efforts
• Country-driven
– Customized country-level approach balancing adaptation needs
and low carbon growth opportunities
• Multi-sector engagement based on demand
• Tailor to the needs of both public sector (WB) and
private sector (IFC) clients
• Focus on multiple benefits and development
opportunities of climate action
• Understand and address social dimensions
• Strengthen local institutions
27
Pillar 2
2. Address the resource gap through existing and
innovative instruments for concessional finance
•
•
•
•
GEF
Adaptation Fund
IDA as a platform for maintreaming adaptation
Carbon Finance
– Carbon Partnership Facility
– Forest Carbon Parnership Facility
• Facilities by other MDBs, UN agencies, bi-laterals
• Proposed Climate Investment Funds
28
Available Resources
mitigation
GEF
$ 0.25 blln
for FY09
Carbon Market:
CDM&JI
< $ 8 billion
for FY09
GEF
$ 0.25 blln
Main Resources
to address
Climate Change
Adaptation
Fund
$ 0.5-0.8 blln
(2008-12)
UNDP
$ 0.19 blln
for adaptation
adaptation
EU
Global Climate
Change Alliance
€ 0. 3 blln
GFDRR
$ 0.07 blln
World Bank
Group
(IBRD/IDA/
IFC/MIGA)
$1.9 billion
for FY09
both
Climate Investment
Funds by MDBs
$ 5 – 10 billion
for 3 years
Other MDBs
$3 billion
for FY09
FY09 estimates are projections
Sustainable Development @ The World Bank
29
Pillar 3
3. Facilitate the development of innovative market
mechanisms
• Further engagament in carbon market
• MIGA –carbon credit delivery guarantee
• IFC- Structured financing packages blending CF with
loans and guarantees
• Support to markets for energy efficiency services, green
products, etc.
• WB Treasury - bonds at reduced rates to advance to
projects with climate benefits
• Climate Risk Insurance products customized to different
needs
30
Pillar 4
4. Create enabling environment for and leveraging private
sector finance
• MIGA guarantees; IFC leveraging
• Partnering with private sector on sustainable
energy products
• Advising private sector on climate mitigation and
adaptation
• Regulatory frameworks conducive to climate
friendly investments
• Mobilizing donor funding for innovative
investments – working with GEF and others
31
Pillar 5
5. Accelerate the deployment of existing and development
of new climate-friendly technologies
CO2 Emissions from Energy
under Different Scenarios
% CO2 Emission change from 2005
• Continue to accelerate
technology deployment:
– IFC clean production
programs
– Proposed CIF envisages
clean technology window
• Explore possible role in
technology R&D:
– Assessment of models
from other sectors
• Working with GEF and other
partners
120%
Business as usual
100%
80%
60%
Business
as usual
40%
20%
Medium Tech
Acceleration
Medium Tech
Acceleration
2030
2050
0%
-20%
-40%
High Tech
Acceleration
High Tech
Acceleration
32
Pillar 6
6. Step-up policy research, knowledge management and
capacity building
• Growing regional and country programs – low-carbon
growth studies in six countries; adaptation studies
• World Development Report 2010 on climate change
• Global study on economics of adaptation
• Social impacts of climate change
• Economic and fiscal policy analyses
• Diagnostic tools to support operations
– User-friendly software to screen for climate risks
– Methodologies for carbon foot-printing of development projects
(starting with energy, transport, and forestry sectors FY08-09)
– Guidance for economic analysis: discount rates, carbon pricing
33
Consultations





SFCCD requested at Annual Meetings 2007 as
evolution of CEIF
Through March 2008: Concept and issues
development, early, informal consultations
April – July 2008: Global consultations on Draft
Concept and Issues paper
Summer 2008: Consultations on full document tba
October 2008 ~ beyond: SFCCD will remain flexible to
accommodate:



Additional feedback
New developments related to climate change regime and financial
architecture
Most recent knowledge and lessons learned
34
www.worldbank.org/climateconsult
1.
2.
3.
4.
5.
6.
What should the World Bank Group’s role on climate change be
within the international development community?
The Concept and Issues Paper states that both mitigation and
adaptation must be integrated into development efforts, where do
you see the key areas of focus for the World Bank Group?
What role can the World Bank Group play to accelerate the
development and deployment at scale of climate friendly
technologies for energy, transport, agriculture and other sectors in
developing countries?
Building capacity within countries, regions and institutions will be
crucial to address climate change issues. How can the World
Bank Group contribute?
What should be the role of the World Bank Group in mobilizing
additional concessional financing and private sector investments
to respond to climate change?
Other Comments?
35
Your Feedback
www.worldbank.org/climateconsult
36
We Are Listening
www.worldbank.org/climateconsult
37