ndrc_climate change conf_policies, management and financing needs for climate change and green...

8/6/2019 NDRC_Climate Change Conf_Policies, Management and Financing Needs for Climate Change and Green Growth

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WORLD BANK

Policies, Management and Financing

Needs for Climate Change andGreen GrowthEde Ijjasz

Sector Manager, Sustainable Development

The World BankJune 24, 2011


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Outline

Adaptation to climate change new capacity

and financing mechanisms

Climate change mitigation new instrumentsand policies for financing

The long-term lock-in constraints: urban

growth financing policies for low carbon

cities


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Annual Natural Disaster Economic Loss(in US$ millions)

Country

Annual

mean

(80-08)

2008

1. USA 18.000 57.290

2. China 10.700 109.520

3. Japan 7.100 0

4. Italy 2.000 0

5. India 1.600 0

6. Germany 1.200 1.200

7. France 1.000 0

8. UK 1.000 3

9. Mexico 900 75

10. Turkey 800 0

In 2008, natural disasters cost the world

US$200 billion. USA and China bore 90% of

this burden


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Chinas Vulnerability

Vulnerability of

China to

meteorological

hazards:

70% of land area50% of population

80% of industrial

and agricultural

areas

Source: China Meteorological Administration


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Extreme

Weather Events

In recent decades,

China has been hit by

more extreme weather

events and the area

affected by theseevents has increased.

The frequency of

typhoons is less but

typhoons are

associated with higherintensity winds and

precipitation


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Sea Level Rise Sea level rise in 2009 is higher than those in

recent 30 years: 68mm higher than the period

1975-1993.

Close to 80 million people live in low elevation

coastal zones.


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From Optimal to Robust Planning

New Skills and Capacity Required

Planning and designing programs and investmentsusing past climate information may lead to expensivemistakes

Robust planning is needed: Priority to no regrets

Buying safety margins in new investments to increaseresilience to climate change.

Reversible and flexible options. For example, restrictingurban development in an area that might be prone tohigher flooding can be reversed easily if flooding

recurrence do not increase, instead of building moreexpensive protective infrastructure

Institutionalize long-term planning that incorporatesscenario analysis and assessment of strategies under awide range of possible futures.


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A Climate Change Adaptation Strategy

The foundation of the adaptation strategy is a strategythat tackles current weather-related risks

This should be supplemented by a strategy that

prepares the economy to manage the uncertaintiesabout future climate conditions

A strategy to tackle current weather-related risks inChina would involve structural and non-structuralsolutions to Avoid, Withstand, and Recover from theimpacts of weather events

Adaptation also involves developing morecomprehensive catastrophe risk financing frameworks


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Policy & Regulatory

Unlock Urban Land

Values

Zoning and Land Use

Legislative Mandates Privatize landfill/STP

management

Establish PPP arrangements

Set Abatement Specifications

Pay on abatement

Establish insurance

mechanisms

Menu of Financing Gap

bridging factors

Redevelop Urban Land

Guarantees

Private financing

Concessional Loans for

public good aspects

Redefine Roles and

Responsibilities for Brown

Agenda

Pay for achieving nationalabatement standards

Establish Catastrophic Risk

Financing arrangements

Solid Waste Management

Sanitation and wastewater

Vulnerability to disasters

Green Growth through Adaptation

World Bank Group


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Outline






cities


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Needed:

Additional sources of funding

Public sector interventions (policies, programs, economic , regulatory, etc)

international support

World Bank Group

$46 trillion: energy sector investments in 2010-2050*

$150 billion a year additional investments in CFT needed

at least $85 billion a year needed in East Asia and Pacific**

*Source: IEA (2010), Energy Technology Perspectives: Scenarios and Strategies to 2050

** Source: World Bank (2010), Winds of Change: East Asia's Sustainable Energy Future

Many CFT Investments are neither commercially viable nor attractive


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EE Market SegmentsTraditional bank

clients

Borderline (credit

enhancement)

SMEs & Public Sector

Consumer long-term

financing

RE Barriers

Long-term tenure

Technology risk

guarantee

SME developers

Consumer long-term

financing

New Tech Risks

Concessional loan

Technology riskguarantee

Venture capital

Credit Line

Guarantee

Dedicated Fund

Consumer Financing

Policy Tools Regulations

Financial incentives

Institutional reform

Feed-in Tariff or

Renewable Portfolio

Standard

Tax on fossil fuel

Support for R&D

Financing

incremental cost

Transfer technologies

Abatement

cost

Abatement potential

Energy EfficiencyRenewable Energy

New Technologies

0

E n e r g y p r i c i n g r e f o r m s

Financing

Instruments


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Economic instruments Regulatory instruments Financial instruments

Taxes

Subsidies

Tradable Permit schemes

Property rights

MRV

Green Procurement

CarbonAccounting

(WSCSD, IFC, etc)

Greening capital markets

Grants, Loans, Guarantees

Export Credit Agencies

Bonds

Equity funds

The instruments should be deployed in concert;

portfolio is context dependent


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Renewable Energy

Buildings & Urban Space

85% of financing will come

from private sector

Carbon markets

Concessional finance

International support Alternative Fuels

Sources of support

Taxes

Subsidies

Tradable Permit Schemes, etc

But investment climate

should change

Channels of support

Economic instruments

Regulations and Monitoring

Stable, predictable carbon price is ideal but politically difficult


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* Source: Based on: Korean Capital Market Institute (2009), Developing Green Finance in Korea

GreenFinance

Green Project Finance

Green Venture Capital and Private Equity

Technology Leasing

Wholesale Finance

Green Mortgage

Green Commercial Building Loan

Green Car Loan, Credit Card

Retail Finance

Fiscal Fund (Treasury Fund)

Eco Fund, Carbon Fund, Eco ETFCat Bond (Natural Disaster Bond)

Asset Management

Auto Insurance

Carbon and Green InsuranceCatastrophe Insurance

Insurance

Country-level legal, regulatory and financing frameworks can help


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The Answer: A Country-specific Blend ofVarious

Available Instruments

Green

Growth

Targets

Public PoliciesChina Green tax, Green procurement

Korea Commission on Green Growth

Japans Hatoyama Initiative

Emission TradingTokyo mandatory trading scheme

4 environmental exchanges in China

Regional Greenhouse Gas Initiative,

US


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Outline






cities


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Densities matter when it comes to avoiding high-carbon growth patterns

Ci ty D e n s i ti e s a n d t h e i r GHG Emi s s i o n s p e r c a p i ta

Washington

Shangai

Seoul

Rio de Janeiro

PraguePortland

New-York

Los Angeles

London

Capetown

Beijing

Barcelona

Bangkok

0

5

10

15

20

25

0 50 100 150 200 250 300 350

Density (H

/ H

)

GHG

Emissions

pe


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Why a Compact City?

24

Urban Form Determines Cities Energy Efficiency


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Why a Compact City?

The trends are challenging:

25

Zhengzhou


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But Compact is not Enough Urban Design around Public Transport Stations has

Major Impacts on Ridership

26

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

New York London Beijing


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Performance of a city should be evaluated more comprehensively

Amore comprehensive performance matrix that incorporates LCC

development indicesand not just GDP growth

Cities need to develop sustainable municipal finance mechanisms

Initiate and guide municipal finance reform to introduce more

stable local revenue bases

Develop a sustainable municipal borrowing framework

Learn from international experiences

Create development patterns where efficiency objectives areintegral

Sequencing of urban development

New approaches an refor areas arenee e for low carbon urban growth

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