Four European countries - Germany, Norway, Sweden, and Switzerland -
today announced a new $500 million initiative that will find new ways to
create incentives aimed at large scale cuts in greenhouse gas emissions
in developing countries to combat climate change. The World Bank Group
worked with the countries to develop the initiative.
The Transformative Carbon Asset Facility will help developing countries
implement their plans to cut emissions by working with them to create
new classes of carbon assets associated with reduced greenhouse gas
emission reductions, including those achieved through policy actions.
The facility will measure and pay for emission cuts in large scale
programs in areas like renewable energy, transport, energy efficiency,
solid waste management, and low carbon cities. For example, it could
make payments for emission reductions to countries that remove fossil
fuel subsidies or embark on other reforms like simplifying regulations
for renewable energy.“We want to help developing
countries find a credible pathway toward low carbon development,” said
World Bank Group President Jim Yong Kim. “This initiative is one such
way because it will help countries create and pay for the next
generation of carbon credits.”
This new initiative is planned to start operations in 2016 with an
initial expected commitment of more than $250 million from contributing
countries. The facility will remain open for additional contributions
until a target of $500 million is reached. It is expected that the new
facility’s support will be provided alongside $2 billion of investment
and policy-related lending by the World Bank Group and other sources.
“Putting market forces to work is an efficient way of reducing
emissions. We expect to achieve significant impact on the ground through
the facility and ensure the sustainability of reducing emissions even
beyond the facility’s initial support, for example, through carbon
pricing instruments like emissions trading systems and carbon taxes, or
stronger low-carbon policy standards and their enforcement,” said Prime
Minister Erna Solberg of Norway. “We are pleased to support this
initiative that will help guide the next generation of carbon market
programs.”
This facility will work alongside a range of global initiatives and
national climate plans to help both developed and developing countries
achieve their mitigation goals. It will pay for carbon assets with high
environmental integrity and a strong likelihood to comply with future
international rules, and will share its learning with the international
community.
"It is very encouraging to see this new initiative launched when all
eyes are on Paris. Four countries are leading with their example and
bridging one of the main challenges for developing countries to achieve
low carbon growth. By working with developing countries to establish
market-based carbon pricing policies and programs, the facility can help
achieve both better growth and a better climate for all,” said Felipe
Calderón, Chair of the Global Commission on the Economy and Climate and
former President of Mexico.