World Bank's Climate Change Actions in EAP Region

Jiang Ru

March 11, 2009Hanoi Sub-Regional Workshop for Asian GEF Focal Points

Development and Climate Change

Development and Climate ChangeA Strategic Framework Approved by WB Board

and Development Committee Guide and support response of WBG to

development challenges posed by climate change

As part of core development efforts, effective response to climate change must combine: Mitigation of global GHG emissions—to avoid the

unmanageableAdaptation at regional, national and local levels—

to manage the unavoidable

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Actions Proposed Step-up policy research in both adaptation

and low carbon growth Support acceleration of new technology Pioneer innovative market mechanisms Create an enabling environment to tap private

sector resources Address the resource gap through existing

and new instruments for concessional finance

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Mid-term report on SFDCC implementation (2009)

Policy mainstreaming: >60 % of CASs FY09 address climate change

Lending mainstreaming: >40% WBG projects FY09 contain climate actions

Strong increase lending to renewables and energy efficiency

New financing instruments rolled out Major AAA on climate change, including World

Development Report (WDR) Improved partnerships and communication

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5

EAP contains emitters of global significanceT

on

s C

O2 p

er c

apit

a

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EAP countries are among the most affected by climate-related threats

Droughts Floods Storms Sea Level rise

Malawi Bangladesh Philippines All low-lying Island States

Ethiopia China Bangladesh Vietnam

Zimbabwe India Madagascar Egypt

India Cambodia Viet Nam Tunisia

Mozambique Mozambique Moldova Indonesia

Niger Laos Mongolia Mauritania

Mauritania Pakistan Haiti China

Eritrea Sri Lanka Samoa Mexico

Sudan Thailand Tonga Myanmar

Chad Viet Nam China Bangladesh

Kenya Benin Honduras Senegal

Iran Rwanda Fiji Libya

Note: The typology is based on both absolute effects (e.g., total number of people affected) and relative effects (e.g., number affected as a share of GDP).

Source: World Bank Environment Department

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EAP Strategy for Delivering Screening

Include climate analysis in Bank AAA / CAS to identify large scale, long-term mitigation opportunities

Consider carbon option in all projects under preparation Financing

Create synergies and fill funding gaps by blending financial instruments (FCPF/CPF, GEF, CIF, IBRD/IDA)

Develop new “climate loans” for financing and risk management.

Capacity Support clients’ work on GHG mitigation: analysis and

framework for client execution of programs

Analysis of Opportunities and Risks

EAP: Energy Flagship Study ID: Low-carbon growth study and TA on REDD

methodology development and forest governance PH and VN climate change strategy (incl. adaptation)

Climate Resilient Cities: A Primer on Reducing Vulnerabilities to Disasters

Climate Change Impact and Adaptation Study for the Bangkok Metropolitan Regions

East Asia Environment Monitor 2007: Adapting to Climate Change

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Where We Are Now? EAP CC Mitigation Portfolio in FY09

~$600m active EAP lending portfolio* (IBRD/IDA), representing 40% of the Bank’s climate change portfolio with emphasis on energy efficiency and renewable energy Indonesia $300m CC DPL

under preparation $101 m active GEF portfolio

with emphasis on energy efficiency, renewable, clean technologies, more recently urban transport

*CC lending portfolio: data from Business Warehouse, it includes all the projects that have climate change in the title and/or as one of operation themesSource: Business Warehouse, Active Portfolio, FY99-FY09

Additional Mitigation Financing in EAP

CTF Investment plans endorsed (under CIF established in July 2008) Philippines with $75m for RE and $50m for urban transport Thailand with $150 m for clean energy and $70m for urban

transformation Vietnam with $30m for grid investment

CTF Investment plans under preparation: Indonesia (expected in FY10Q3)

Carbon Finance About $1.4b & 60% of Bank share Kyoto funds now phasing out CPF to be operational, VN (hydro)

CN (IGCC, biogas), ID (geothermal) FPCF started with Readiness Fund 7 selected (IN, Lao, VN, Vanuatu moving)

1010

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Examples for Strategic Mitigation Programs Renewable energy development would meet future energy demand and

help transform the power sector’s GHG emissions trajectory. Geothermal in ID, PH, hydro in VN, offshore wind in CN

Public transport and integration of work and living space would frame future transportation and production choices, putting transport-related emissions on a lower carbon trajectory while reducing air pollution. EcoCities in CN, Urban Transport in TH (Bangkok)

Promotion of energy efficiency would lift private and public investments in EE and reduce future energy demand and associated emissions. Rural / provincial EE program in CN.

Use of waste biomass and better manure management in the agro-industry would reduce GHG emissions and reduce pollution. Livestock biogas energy program in CN.

Saving remaining rainforests and providing economic alternatives would eliminate large streams of GHG emissions while protecting biodiversity. REDD readiness plans in VN, Lao PDR, ID.

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Adaptation Financing in EAP

GEF SCCF: China and Philippines LDCF: Pacific Islands (Kiribati, Solomon Islands) Adaptation Fund (to be operational)

The Global Facility for Disaster Reduction and recovery Funds disaster risk assessments, mitigation policies and strategies,

prevention preparation and recovery projects at global, regional and country levels

Strategic Climate Fund under CIF Pilot Program for Climate Resilience (PPCR): Pilot and demonstrate

approaches for integration of climate risk and resilience into development policies and planning

Cambodia: joint donor mission Oct. 2009, CC policy implementation expected from June 2010. Identification of investments to follow

Samoa: scoping mission in Dec. 2009 and joint donor mission in April 2010. Forest Investment Program (FIP) supports REDD. Subject to decision on

March 17, Investment Strategies will be prepared in IN, PH, Lao.

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Examples of EAP Adaptation Activities The Economics of Adaptation (VN case study), social welfare

CC study in VN (GFDRR), vulnerability of the poor in VN Urban sector:

i. Coastal city study – to be used as a model for scaling up

ii. CRC and Local Resilience Action Plan implementation in cities in VN, PH, TH and CN

iii. CC focus in CDS in the PH DRM: disaster management mitigation programs in ID, PH, VN

and linkages with Adaptation programs Two SCCF operations in CN (agricultural adptation) and PH (CC

adaptation pilot and integration into economic and operational planning)

Bank Lending as a Platform for Climate FinancingBank Lending as a Platform for Climate Financing

Strenghtening development outcomes by integrating climate finance

Source: IDA and Climate Change: Progress Report, octobre 2009.

The Climate Change Financing LandscapeStrategy and AAA Financing Monitoring

Note: Elements in red indicate what is new under IDA 15

IDA’s leverage for climate change

CIF: PPCR, SREP, FIP

GEF

UNFCCC Climate Funds

GFDRR

CF: CDCF, BioCF, FCPF

IDA 15

Climate change AAA work

WB and regional CC Strategy

CAS

IDA performance measurement

SFDCC

Rio markers

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Source: Richard Hosier “GEF support to Climate Change” Climate Finance Workshop (July 2009)

Year

(-)

(+)

GEFCF

CTF

Cash Flow

Mitigation Project— with climate financing to:Condition Markets, Transform Markets, Enhance Revenues

… …by reducing barriers, internalizing carbon, buying down cost.by reducing barriers, internalizing carbon, buying down cost.

Complimentary Use of Financing Mechanisms to Accelerate Low-carbon InvestmentComplimentary Use of Financing Mechanisms to Accelerate Low-carbon Investment

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World Development Report 2010

A climate-smart world within reach if we…

Act now: to stay close to a 2° C warming target

Act together: for fairness and cost-efficiency, starting with the high-income countries taking aggressive action

Act differently: a transformation needed to reduce emissions 50-80% in the next decades

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Thanks!

Additional info: www.worldbank.org/eapenvironment

ccrepin@worldbank.org

jru@worldbank.org

Where to find Displayed Publications

www.worldbank.org/eapenvironment

Climate Change Impact and Adaptation Study for the Bangkok Metropolitan Regions

East Asia Environment Monitor 2007: Adapting to Climate Changewww.worldbank.org/eapenvironment

Convenient solutions to an inconvenient truth : ecosystem-based approaches to climate changewww.worldbank.org/publications

Climate Resilient Cities: A Primer on Reducing Vulnerabilities to Disasters

http://www.iucn.org/knowledge/publications_doc/publications/

Natural solutions : protected areas helping people cope with climate change

www.worldbank.org/eapenvironment

Additional Slides on Related CC Financing Mechanisms at the Bank

Partnership Forum

Clean Technology Fund (CTF)

Finance scaled-up demonstration, deployment and transfer of

low carbon technologies with significant potential for long-term

GHG savings

$5 billion (mostly concessional finance)

Strategic Climate Fund (SCF)

Targeted programs with dedicated funding to pilot new approaches with potential for

scaling up

Pilot Program for

Climate Resilience

Mainstream climate

resilience into core

development planning

Forest Investment

Program

Reduce emissions from

deforestation and forest

degradation

Scaling Up Renewable Energy in

Low Income Countries

Transformational change to use of renewable energy

$1 billion

(under design) (under design)

• Supports countries’ development strategies and low-carbon programs

• Leverages financial products of International Financial Institutions

• Stimulates private sector engagement

Climate Investment Funds (CIF)A collaboration between donors, World Bank and regional development banks

to support a transformation towards low-carbon development

Climate Investment Funds (CIF)A collaboration between donors, World Bank and regional development banks

to support a transformation towards low-carbon development

Trust Fund Committee Trust Fund Committee

Host Governments

and DonorsSell

ersBuyers

Carbon Asset

Development Fund Emission

Reductions Programs

Carbon Fund

Grants to Sellers to

prepare carbon assets

Sellers propose and develop Emission

Reductions delivered to the

Carbon Fund

Buyers provide funds and

received emission reductions

Participants and

partners provide funds

Carbon Partnership Facility (CPF)Participants and partners work together to develop programs to achieve

“larger scale and longer term” emission reductions

CPF – Objectives and Projects in EAP

Scaling up of carbon finance through efforts that: integrate carbon into investment decisions early on work with client countries over a long period of time move to more programmatic and sector-wide approaches commit to long-term carbon purchases post-2012 Support transition to a low-carbon economy

Examples in EAP– Vietnam: development small scale

hydropower– Indonesia: scaling up of geothermal potential– China: support for IGCC pilot plants– China: energy from agricultural waste

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Selection

of REDD

recipient

countries

Forest Carbon Partnership Facility (FCPF)

Readiness Mechanism

Funding for REDD Readiness (capacity building) (2008 - ?): Reference Scenario National REDD Strategy National Monitoring System

REDD = Reduced emissions from deforestation and degradation

Carbon Finance Mechanism

Payments for Emission Reductions (not necessary purchase) (2009 - ?):

Performance-based Verification, reporting Registration

Carbon Fund: ~$200 million

Participants Committee (10 recipients & 10 donors with same rights)Primary decision making body, including all policy issues

Participants Committee (10 recipients & 10 donors with same rights)Primary decision making body, including all policy issues

Readiness Fund: ~$150 mil.

Observers (Indigenous People, NGOs, IGOs, privat sector)Observers (Indigenous People, NGOs, IGOs, privat sector)

Participants Assembly (recipients & donors)Participants Assembly (recipients & donors)

Ad Hoc Technical Advisory PanelsAd Hoc Technical Advisory Panels Buyer Participants CommitteeBuyer Participants Committee

Progress with the Forest Carbon Partnership Facility

Papua New Guinea (PNG), Indonesia, Vietnam, Lao PDR, Cambodia, Thailand and Vanuatu Readiness Plan Idea Notes and have been selected as FCPF Participants Countries.

Indonesia completed its Readiness Preparation Proposal (RPP) and is accessing a FCPF US$3.6million Grant for implementation.

Lao has obtained the first US$200,000 grant to prepare the RPP

Vietnam is in the process of obtaining the first US$200,000 Grant

Vanuatu has started discussion

Papua NG decided to move ahead with REDD without Bank support

Thailand has not yet expressed interest in preparing an R-PP and has not yet signed its FCPF Participation Agreement.

Cambodia receives support from UNREDD and has recently requested Bank support.

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Pilot Program on Climate Resilience (PPCR)

First active program under the Strategic Climate Fund

Objective: Pilot approaches for integration of climate risk into development policies and planning

Approximately $30m - $60m, 50% grants, 50% in optional co-financing available to each of 9 pilot countries and 2 regional groupings worldwide.

EAP Pilots: Cambodia; Pacific Islands (Samoa, Tonga, PNG + small regional component)