76240 V2 DEVELOPMENT AND CLIMATE CHANGE A Strategic Framework for the World Bank Group Technical Annexes FY09–11 DEVELOPMENT AND CLIMATE CHANGE A Strategic Framework for the World Bank Group Technical Annexes FY09–11 June 2012 A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T iii CONTENTS Acknowledgments iv List of Abbreviations and Acronyms v Annexes Annex 1: Highlights of WBG Engagement across the SFDCC Action Areas 1 Annex 2: Implementation Progress for Key Actions and Deliverables 18 Annex 3: Highlights of Addressing Climate Change-related Programs in the World Bank Regions 33 Annex 4: Results Framework for Climate Change 54 BOXES Box 1. Reducing Emissions from the Transport Sector: Facilitating a Modal Shift 3 Box 2. Cities and Climate Change: A Growing Agenda 4 Box 3. Making Climate Change Explicit in Disaster Risk Reduction 5 Box 4. Climate-smart Agriculture: An Integrated Approach to Agriculture, Forestry, and Landscape Management 5 Box 5. Feedback from Staff: Challenges to Furthering the Climate Change Agenda 7 Box 6. Humbo (Ethiopia), a BioCF Project 33 Box 7. Supporting Climate-resilient Development in the Sahel and West Africa 35 Box 8. China, the World Bank Group, and Climate Change 37 Box 9. Leveraging Domestic Banks for Energy Conservation Investments in China 38 Box 10. Supporting Russia in Implementing EE Measures and Reducing GHG Emissions 41 Box 11. Low-carbon Development in Poland: Supporting Diagnostics and Implementation 42 Box 12. PPCR in Tajikistan 43 Box 13. Supporting the Development of the Brazilian Carbon Market 44 Box 14. A Comprehensive Approach to Support Mexico in Reducing Emissions from Urban Transport 45 Box 15. Colombia Weather Derivative 46 Box 16. CTF in Morocco 48 Box 17. Increase Agricultural Resilience to Climate Change in Morocco 49 Box 18. Carbon Finance Delivers Community Benefits 51 Box 19. Multi-donor Trust Funds (MDTF) in South Asia 51 iv D E V E LO PM E N T A N D C L I M AT E C H A N G E Acknowledgments Bosquet, Joelle Chassard, Isabelle Hagbrink, Charles di Leva, Flavia Rosembuj, Markus Pohlmann, Heike Reichelt, Concepcion Aisa Otin, Laura Tlaiye, Ekaterina Gratcheva, This Technical Annex provides the background for the Antonio Barbalho, Jonathan Wadsworth, Fionna Douglas, Strategic Framework for Development and Climate Change Pierre Audinet, John Rogers, Marianne Fay, Ademola Completion Report (FY09–11). It has been prepared through Braimoh, Kai-Uwe Barani Schmidt, Marcos Castro, a broad-based consultation with staff from World Bank Habiba Gitay, Najma Siddiqi, Neeraj Prasad, Elisabeth units, sectors, and regional operations; the International Mealey, Robert Bisset, Astrid Hillers, Monika Kumar, Finance Corporation (IFC), and the Multilateral Carter Brandon, Elif Kiratli, and Akiko Nishimae. Investment Guarantee Agency (MIGA). The effort was led by Sameer Akbar and Jane Ebinger (World Bank), under The team is grateful to Hartwig Schafer (World Bank) for the overall guidance of Rachel Kyte, Andrew Steer, and overseeing and guiding the effort. His team comprising Mary Barton-Dock (World Bank), Nena Stoiljkovic (IFC), Doreen Kibuka-Misoke, Koshie Michel, and Ursula and Edith Quintrell (MIGA). The core writing team Casabonne guided the process. included Sonu Jain, Jarl Krausing, Ari Huhtala, Philippe Ambrosi, Jane Ebinger, and Sameer Akbar (World Bank). Extensive comments were received from various vice presi- Final formatting was undertaken by Patricia Braxton dential units during the review process. We would like to (World Bank). thank Mahmoud Mohieldin, Managing Director, World Bank; Lars Thunell, Executive Vice President, IFC; Izumi Contributions to the report were provided by the following Kobayashi, Executive Vice President, MIGA for their con- World Bank Group staff: Raffaello Cervigini, Christophe stant support and guidance. Comments and feedback from Crepin, Akiko Nakagawa, Dorte Verner, Ronald Hoffer, the World Bank Group’s Executive Directors and their staff Jocelyne Albert, Masami Kojima, Varun Nangia, Ashok helped strengthen this report. Sarkar, Andreas Kopp, Patricia Bliss-Guest, Federico Querio, Rowena Dela Cruz, Funke Oyewole, Shilpa Patel, Special thanks are due to Andrew Steer for providing lead- Alan Miller, Lucas Bossard, Daniel Hoornweg, Marcus ership and guidance to the World Bank Group’s climate Lee, Robin Mearns, Margaret Arnold, Yewande Awe, change agenda during much of the implementation period Milen Dyoulgerov, Michael Jacobsen, Olusola Ikuforiji, of the Strategic Framework, and for presenting this report Kiran Pandey, Richard Hosier, Louise Shaw Barry, Ana to the Board. Bucher, Kanta Kumari Rigaud, Nancy Charaani Meza, Angus Friday, David Maleki, Alexandre Kossoy, Benoit A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T v List of Abbreviations and Acronyms AAA analytical and advisory activities DPO Development Policy Operation ADB Asian Development Bank DRM Disaster Risk Management AF Adaptation Fund EAP East Asia and the Pacific Region AfD Agence Française de Développement EC European Commission AFR Africa Region ECA Europe and Central Asia Region AGF United Nations Secretary-General’s High- EE energy efficiency Level Advisory Group on Climate Change ENV Environment Department Financing ERPA Emission Reduction Purchase Agreement ARD Agriculture and Rural Development ESMAP Energy Sector Management Assistance Department Program AusAID Australian Agency for International ESW economic and sector work Development FAO Food and Agriculture Organization BioCF BioCarbon Fund FCPF Forest Carbon Partnership Facility BRT Bus rapid transit FIP Forest Investment Program CAADP Comprehensive African Agriculture Development Programme GCF Green Climate Fund CAS country assistance strategy GEF Global Environment Facility Cat DDO Catastrophe Deferred Drawdown Option GFDRR Global Facility for Disaster Reduction and Recovery CCS carbon capture and storage GHG greenhouse gas CDM Clean Development Mechanism GIZ Deutsche Gesellschaft fuer Internationale CEA Country Environmental Assessment Zusammenarbeit CEET carbon emissions estimator tool HCFC Hydrochlorofluorocarbon CER certified emission reduction IBRD International Bank for Reconstruction and CFOs climate finance options Development CGIAR Consultative Group on International ICT information and communication technology Agricultural Research ICZM integrated coastal zone management Ci-Dev Carbon Initiative for Development IDA International Development Association CIC Climate Innovation Center IEA International Energy Agency CIF Climate Investment Funds IEG Independent Evaluation Group CNG compressed natural gas IFC International Finance Corporation CODE Committee on Development Effectiveness IMF International Monetary Fund COP Conference of Parties JICA Japan International Cooperation Agency CSP concentrated solar power KP knowledge product CTF Clean Technology Fund LAC Latin America and the Caribbean DAC Development Assistance Committee LCD low-carbon development DPL Development Policy Loan vi D E V E LO PM E N T A N D C L I M AT E C H A N G E LCR Latin America and the Caribbean Region conservation, sustainable management of LDCF Least Developed Countries Fund forests, and enhancement of forest carbon stocks LED low-emissions development SAR South Asia Region LULUCF land use, land-use change, and forestry SCCF Special Climate Change Fund MAC marginal abatement cost SCF Strategic Climate Fund MAIN Mitigation Action Implementation Network SDV Social Development Department MDB multilateral development bank SIDS small-island developing states MDG Millennium Development Goal SIP Strategic Investment Program MDTF Multi-Donor Trust Fund SLM sustainable land management MNA Middle East and North Africa SMEs small and medium enterprises MIGA Multilateral Investment Guarantee Agency SPCR Strategic Program for Climate Resilience MNA Middle East and North Africa Region SREP Scaling Up Renewable Energy in Low- MOU Memorandum of Understanding Income Countries Program MRV measurement, reporting, and verification STAQ regional sustainable transport and air quality NAMA Nationally Appropriate Mitigation Action TA technical assistance NAP National Adaptation Plan TF trust fund NAPA National Adaptation Programme of Action TTL task team leader NCCAP National Climate Change Action Plan UN United Nations NEPAD New Partnership for Africa’s Development UNCSD United Nations Conference on Sustainable OCHA Office for the Coordination of Humanitarian Development Affairs UNDP United Nations Development Programme ODA official development assistance UNEP United Nations Environment Programme OECD Organisation for Economic Co-operation UNFCCC United Nations Framework Convention on and Development Climate Change OPCS operations policy and country services UNICEF United Nations Children’s Fund PIN project idea note UNISDR United Nations International Strategy for PMR Partnership for Market Readiness Disaster Reduction PoA Programme of Activities URA Urban Risk Assessment PPCR Pilot Program for Climate Resilience VPU vice presidential unit PPIAF Public-Private Infrastructure Advisory WBG World Bank Group Facility WBI World Bank Institute PPP public-private partnership WDI World Development Indicators PSIA Poverty and Social Impact Analysis WDR World Development Report RE renewable energy WHO World Health Organization REDD Reducing Emissions from Deforestation and WSP Water and Sanitation Program Forest Degradation REDD+ Reducing Emissions from Deforestation and Forest Degradation, forest carbon stock Note: All dollars are U.S. dollars unless otherwise indicated. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 1 Annex 1. support to country-led reforms and programs. Internally, WBG’s corporate review functions are increasingly including Highlights of WBG climate risk screening in their country assistance strategies. Engagement across the Development Policy Operations (DPO) are emerging as a SFDCC Action Areas major vehicle for supporting clients’ climate change policy and institutional developments needed to tackle climate change. During fiscal years 2009–11, the WBG provided Action Area 1: over $11.4 billion in such operations in 15 countries, includ- Supporting Climate Actions in ing loans to Brazil, Indonesia, Mexico, Morocco, and Turkey. Country-led Development Processes In support of the “Energy Policy of Poland Until 2030� pro- gram, a Development Policy Loan (DPL) for Poland ($1.11 When the World Bank Group approved the SFDCC in billion) was approved in June 2011 to support the program’s 2008, a broad commitment was to mainstream climate energy efficiency and renewable energy components. change considerations into lending and operations. Three years later, there is overwhelming evidence that climate The WBG has initiated innovative work in cities. A DPL is change has become central to the country-led development under preparation to help Mexico City improve its climate- agenda supported by the WBG. In 2011, the WBG is sup- resilience, which will pioneer the use of social accountability porting mitigation and adaptation activities in nearly 130 approaches to ensure that incremental climate finance is put countries. Over 45 additional countries are requesting sup- to effective use. The $200m loan (Mexico: Strengthening port from the Climate Investment Funds (CIFs), and there Social Resilience to Climate Change) is the first DPL in is demand for support that is vastly greater than available the Bank designed primarily to address the impact of cli- resources. In the Latin America and Caribbean region, the mate change on vulnerable groups. It was prepared as part Bank is funding over 180 country-led activities that will of a multisectoral effort involving urban development, for- provide climate change adaptation and mitigation coben- estry, environment, disaster risk management, and social efits estimated to be worth more than $7.3 billion.1 In the development. The operation will include policy actions at Middle East and North Africa, almost 60 percent of the the federal, provincial, sector, and municipal level and active portfolio is supporting investments related to climate involves both state and non-state actors to ensure an empha- change, and more than 75 percent of the pipeline is related sis on vulnerable groups in Mexico’s impressive efforts to to either mitigation or adaptation projects.2 address the impacts of climate change. Providing Strategy and Policy Support Supporting Low-emissions Development The WBG has moved from piecemeal climate projects to a Client demand for low-carbon development is growing. The broader approach that impacts country plans. Almost 100 per- WBG’s renewable energy portfolio increased from a total of cent of new country assistance and country partnership strate- $2.9 billion (18 percent of overall lending) in fiscal years gies in FY11 include climate action, up from 63 percent in 2006–08 to $6.6 billion (22 percent) in fiscal years 2009–11. fiscal 2009 and 88 percent in fiscal 2010. Country assistance The energy efficiency portfolio increased from $3.0 billion strategies (CASs) are prepared in close consultation with the (19 percent) to $5.0 billion (17 percent) in the same time country governments and form the foundation of the WBG’s period. The share of low-carbon projects3 increased from 1 All dollars are U.S. dollars unless otherwise indicated. 2 As per analysis carried out by regional staff. 3 Defined as renewable energy projects (including all sizes of hydropower projects); energy efficiency improvements; power plant rehabilitation to improve efficiency; district heating; biomass waste–fueled energy; gas-flaring reduction; and increased use of cleaner fuels to displace more carbon intensive fuels. 2 D E V E LO PM E N T A N D C L I M AT E C H A N G E $6.76 billion (42 percent) in fiscal years 2006–08 to $14.9 Countries designing Nationally Appropriate Mitigation billion (51 percent) in fiscal years 2009–11. Actions (NAMAs) are increasingly seeking support including for policy and institutional reforms and investment programs Fiscal 2011 marked an all-time record in WBG low-carbon that can be presented for international funding, such as under financing, with $5.9 billion in new commitments. The the Green Climate Fund. For example, Jordan is utilizing sup- WBG’s financing for new renewable energy (RE) and port from the World Bank and Public-Private Infrastructure energy efficiency (EE) exceeded targets, increasing by about Advisory Facility (PPIAF) to prioritize its NAMAs. 48 percent per annum (totaling $9.2 billion) compared to a target average annual increase of 30 percent to fiscal 2011 The Bank has seen a significant growth in its work on miti- (or $6 billion over fiscal years 2009–11).4 The WBG’s gation in cities. This includes the ECO2 Cities program, renewable energy portfolio more than doubled, increasing where ecological and economic cities combine energy effi- from $2.9 billion in fiscal years 2006–08 (18 percent of total ciency design with environmentally sound technologies. WBG energy financing in the period) to $6.6 billion in Through the C40 group partnership, the WBG is focusing fiscal years 2009–11 (22 percent). on city climate action plans and standardized reporting of city greenhouse gas emissions. Transport and water projects are now routinely screened for EE opportunities. A primer on EE for municipal water Strengthening Resilience to Climate Risks and wastewater utilities (jointly undertaken by ESMAP, the Water Anchor, and the Water and Sanitation It is now widely accepted that the world is likely to experi- Program) provides information on opportunities and good ence a 3–4 degree Celsius increase in average temperatures practices for improving EE and reducing energy costs in relative to preindustrial levels. This has potentially cata- municipal water and wastewater utilities. A comprehensive strophic implications for developing countries, particularly assessment of projects screened for EE opportunities was the poorest economies, as a result of climate-induced conducted during 2010–11. Of the 63 projects screened, impacts and variability. To sustain and secure development two-thirds were found to have built-in EE measures, and gains, adaptation and climate-resilient development must be just five were found to have missed opportunities. The a core part of the Bank’s development agenda. transport sector is moving increasingly toward low-carbon options (box 1). To inform and enhance decision making and the design and delivery of investments, the Bank is deepening its engage- The WBG is providing upstream support to integrate cli- ment by (a) mainstreaming climate adaptation in strategi- mate considerations into long-term planning processes. cally targeted policy and project interventions (CASs, Over 2008–11, ESMAP and the WBG supported in- DPOs, SILs); (b) demonstrating action and learning depth low-carbon development studies in seven major through strategic partnerships like the $1 billion Pilot emerging economies—Brazil, China, India, Indonesia, Program for Climate Resilience; and (c) mobilizing world- Mexico, Poland, and South Africa. These studies have pro- class expertise for climate impact and risk assessment and vided data and tools to support client countries in formulat- the development of knowledge products such as the Climate ing and implementing their National Climate Change Change Knowledge Portal. Action Plans. Responding to growing demand, that work is now being replicated by the WB in eight additional A World Bank study on Economics of Adaptation to Climate countries.5 Change estimates that it will cost $70–$100 billion per year 4 Following a review completed in fiscal 2011, it was discovered that WBG financing for new RE and EE over fiscal years 2005–07 was under-reported. Therefore, the baseline against which WBG increases in financing for new RE and EE are measured was revised from $600 million to $898 million. 5 Colombia, Costa Rica, Macedonia, Morocco, Nigeria, Tunisia, Uruguay, and Vietnam. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 3 for developing countries to adapt to climate impacts (under a tural insurance and risk management; community-based 2° Celsius average temperature rise). More needs to be done land, water, and pasture management; increased private sec- to further integrate climate considerations into operations; tor engagement; drought- and flood-resilient seed production significant potential exists across all programs and sectors. and farm systems support; conservation tillage; adaptive The Bank continues to leverage various sources of adaptation research; water harvesting; and a range of improved irriga- finance (PPCR, GEF, LDCF, and SCCF) to support client tion and agricultural water management measures and mea- countries as the Green Climate Fund is being established. sures to protect agricultural land from flooding. These activi- ties are additional to existing programs like the Global Food Vulnerability to climate-induced risks is a main concern of Crisis Response Program (GFRP) and the Global Agricul- many countries. It is being addressed by scaling up lending tural and Food Security Program (GAFSP). These programs and analytical work. The MNA Region is producing a flag- help client countries deal with spikes caused by extreme ship report on Adaptation to Climate Change in Arab weather events, which are becoming more frequent as a result Countries in partnership with the League of Arab States. In of climate change. For example, the MNA Region is work- ECA, Tajikistan is moving forward as a leader in imple- ing on import supply chains to reduce regional vulnerability menting the Pilot Program For Climate Resilience (PPCR). to changes in food import pricing. Agriculture and the broader sustainable land and water man- Screening projects for climate risks is becoming increasingly agement agenda plays a key role in climate resilience. This is important. In the water sector, significant progress has been especially true for countries where a large proportion of the made for hydropower projects. Work has been published on population is dependent on natural resources for their liveli- the impact of climate change on hydrologic indicators and hoods. Its importance in country-driven agendas is demon- exposure risk at the catchment level (8,400 catchments in strated by the priority given in the design and implementa- six Bank regions). This body of work will form the basis for tion of Strategic Programs for Climate Resilience (SPCRs) project-level screening for climate risk that will soon be under the PPCR. SPCRs support activities such as agricul- introduced. Box 1. Reducing Emissions from the Transport Sector: Facilitating a Modal Shift Changes in the World Bank transport portfolio reflect the importance given to the modal shift—from road to rail, inland waterways, and maritime transport—in reducing GHG emissions in transport: • The share of the roads and highways subsector has decreased (from 88 percent in fiscal 2001 and 76 percent in fiscal 2006 to 50 percent in fiscal 2010 and 65 percent in fiscal 2011) • The share of the railways subsector has increased (from 1 percent in fiscal 2001 and 6 percent in fiscal 2006 to 14 percent in fiscal 2010 and 16 percent in fiscal 2011) • Engagement in the urban transport subsector has increased over time. (“General Transport,� with an urban transport majority, increased from 9 percent in fiscal 2001 and 13 percent in fiscal 2006 to 29 percent in fiscal 2010.) Two large projects that are making a difference are India’s Dedicated Freight Corridor and an urban transport project in Lagos, Nigeria. In India, the Dedicated Freight Corridor (DFC) program will enable the country to create one of the largest rail freight operations in the world. The DFC shifts freight transportation from road and conventional rail to the more energy-efficient DFC rail, therefore lowering energy consumption in India’s transport sector. The corridor will operate entirely through electric locomotives, reducing carbon emissions by more than 50 percent over a 30-year period compared to business as usual. The Lagos Urban Transport partnership between the World Bank and Federal Republic of Nigeria led in 2007 to a new bus rapid transit (BRT) line. Building on the BRT project, a new project approved in 2010 blends IDA and GEF resources to empha- size GHG emission reductions. It is expected to increase the percentage of trips made by BRT among households owning cars or motor bikes from 10 to 20 percent and reduce CO2 emissions from vehicles along BRT corridors from 1.1 to 1.06 million tons CO2. The Clean Technology Fund (CTF) support expands climate action in transport to other aspects of the modal shift. 4 D E V E LO PM E N T A N D C L I M AT E C H A N G E An Urban Risk Assessment (URA) framework has been Grenadines is one of the first truly integrated adaptation and developed as a tool to assess disaster and climate risk in cities disaster vulnerability reduction projects in GFDRR’s portfolio. (box 2). URA will inform decision making and urban plan- It is cofinanced by regional IDA and the PPCR. ning in the design of risk management programs. Under the Mayors’ Task Force on Climate Change, Disaster Risk, and Support to strengthen national climate and weather infor- the Urban Poor, the URA framework has shown very posi- mation services and adopt finance options for risk reduction tive results when applied to Dar es Salaam, Jakarta, Mexico and transfer increasingly are seen as integral to national cli- City, and São Paulo. Plans are under way to introduce the mate adaptation programs. Examples include the URA framework in additional cities around the world. Catastrophe Risk Insurance Facility for South Eastern and Central Europe, the Catastrophe Deferred Drawdown Working closely with the Global Facility for Disaster Option (Cat DDO), and the launch of the MultiCat plat- Reduction and Recovery (GFDRR), the WBG has strength- form. The working connections between climate adaptation ened operational links between climate adaptation and disas- and disaster risk management has good traction with the ter risk management (box 3). GFDRR has been financing government of the Philippines, as exemplified by the disaster risk reduction programs that build adaptive capacity approval of the largest ever Cat DDO ($500 million, in its 31 disaster-prone priority countries. Close to two-thirds approved September 2011). of all projects supported by GFDRR to mainstream disaster risk reduction considerations also promote the formulation Realizing Multiple Benefits and implementation of climate change adaptation strategies and plans. The $47 million Regional Disaster Vulnerability There are important synergies between adaptation and miti- Reduction projects for Grenada and St. Vincent and the gation that need to be considered when designing and Box 2. Cities and Climate Change: A Growing Agenda A Greenhouse Gas Standard for Cities. The Global Protocol for Community-scale Greenhouse Gas Emissions has been released by ICLEI-Local Governments for Sustainability and the C40 Cities Climate Leadership Group to help cities around the world measure and report GHG emissions. This effort has been closely supported by the World Bank, the Organisation for Economic Co-operation and Development (OECD), the United Nations Environment Programme (UNEP), UN-Habitat, and the World Resources Institute (WRI). The community protocol has three main components: (1) guiding principles and a policy framework to link the efforts across local and national governments and the private sector; (2) the 2012 Accounting and Reporting Standard, with supplemental guidance on methodologies and reporting templates; and (3) a road map for institutionalizing the process for updating the standard on an ongoing basis. The community protocol integrates seamlessly with national and corporate GHG accounting methodologies, facilitating linkages between these entities for improved coor- dination to reduce GHG emissions. Urban Risk Assessments (URAs). URAs provide a framework for assessing disaster and climate risk in cities to enable informed decision making and urban planning in the design of risk management programs. It has been developed and piloted with the support and guidance of a number of agencies, including the GIZ, International Development Research Centre, United Nations Environment Programme, U.S. Department of State, United Nations University, Arizona State University, Cisco, United Nations Human Settlements Programme, and International Institute for Environment and Development. URAs are based on four principal building blocks to improve the understanding of urban risk: (1) historical incidence of hazards, (2) geospatial data, (3) institutional mapping, and (4) community participation. It is designed to allow flexibility in how it is applied, depending on a city’s needs, available financial resources, available data, and institutional capacity. The URA tool has been implemented in several cities—such as Dar es Salaam, Jakarta, Mexico City, and São Paulo—over the past year with very positive results. The risk assessments provide a full picture of hazard risk at the city level, an assessment of vulnerable populations, and a mapping of relevant institutions pointing to gaps and duplications in roles and responsibilities. URAs lay the groundwork for collaboration across city governments, the private sector, and devel- opment agencies to begin benchmarking their own progress toward the reduction of urban vulnerability. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 5 Box 3. Making Climate Change Explicit in Disaster Risk Reduction In line with the SFDCC commitments, GFDRR has further strengthened its climate risk management and financing work across five core program areas to (a) provide a comprehensive climate change baseline to facilitate “climate-smart� mainstreaming; (b) help countries better assess climate risks and inform development decision making, including during post-disaster recon- struction; (c) strengthen countries’ climate and weather information services and early warning systems; (d) scale up commu- nity adaptation action, in partnership with CSOs; and (e) promote innovation and facilitate access to climate risk financing and transfer solutions. planning climate actions and evaluating their results. community-based flood and watershed management, arid Examples include interventions in forestry such as forest lands management, weather and climate services, agricul- carbon projects (reforestation and forest protection). Such tural productivity, and commercial agriculture, as well as projects are funded using mitigation incentives and increase pilot investments on agriculture and forest carbon. the resilience of local environments and communities by recovering severely degraded lands, protecting water Morocco faces increasing water stress and a dual approach is resources, and conserving biodiversity. Another example is being employed to support diversification in irrigated agri- climate-smart agriculture, where the focus is on the triple culture and poverty reduction and sustainable natural win: carbon sequestration, food security, and climate-resil- resource management in the rain-fed sector. Similarly, in ient livelihoods (box 4). Yemen support is being provided to enhance coping strate- gies for adaptation for farmers who rely on rain-fed agricul- With a 70 percent increase in food production needed by ture in the Yemen highlands through the conservation and 2050, IDA and IBRD support for agriculture is projected to use of biodiversity important to agriculture and associated increase from an average of $2.9 billion over fiscal years local traditional knowledge. In Mexico, the Agricultural 2006–08 to $4.5–$6.4 billion in fiscal 2012 and beyond. Sector and Water Program supports enhanced agricultural Approaches vary by country and subregion. Africa is focus- water management, integrated soil fertility management ing on enhanced productivity and land and water manage- and conservation tillage, targeted research and seed reserves, ment. In Kenya, programs include support to and wild land conservation, together with programs to Box 4. Climate-Smart Agriculture: An Integrated Approach to Agriculture, Forestry, and Landscape Management Climate-smart agriculture seeks to increase sustainable productivity, strengthen farmers’ resilience, reduce greenhouse gas emissions, and increase carbon sequestration. It takes a landscape approach, recognizing the interdependencies among land, water, and forests over space and time. Agricultural and forest landscapes play a key role in watershed protection in Mexico. Agriculture accounts for 15 percent of jobs, 77 percent of water withdrawals, and, with forest degradation and deforestation, 21 percent of GHG emissions. Mexico’s agricultural sector and water programs focus on adaptation but also adaptation-mitigation cobenefits. These pro- grams support improved watershed management, improved irrigation management, fire management, zero tillage, methane capture from livestock, and improved energy efficiency in agriculture and fishing. There is also support for sustainable agri- business development, social protection, and insurance programs. The World Bank has supported Mexico in program imple- mentation through a series of development policy loans focused on low-carbon growth, adaptation, and green growth, as well as investment operations. These were complemented in 2011 by the Forest Investment Program (FIP), which supports community-based sustainable forest and landscape management. As is evident in the Mexico case, climate-smart agriculture works best when mainstreamed into broader agriculture and nat- ural resource development and poverty reduction programs. It is an integrated approach on agriculture, forestry, and land- scape management. 6 D E V E LO PM E N T A N D C L I M AT E C H A N G E enhance agribusiness and increase social protection for the Growth and Poverty Alleviation—was launched at the end of vulnerable. 2009. One of its five business lines—promoting a safe and sustainable urban environment—advocates a focus on urban The African Union has committed to integrating climate- form and design to achieve efficiency gains, reduce a city’s smart agriculture into the Comprehensive African GHG emissions, and take advantage of the cobenefits of cli- Agricultural Development Program. Approaches to agricul- mate change mitigation and adaptation. Within two years, tural strategy and investment planning have been endorsed progress has already been made on access to finance (a city- by African heads of state. The World Bank Group is sup- wide approach to carbon finance, with a pilot in Amman, porting this approach with a range of development partners Jordan), monitoring of GHG emissions (standard for and additional financing. accounting and reporting community-scale emissions), and urban risk assessment (standardized, cost-effective tool for Mainstreaming Climate Concerns in Internal climate and disaster-related risks in cities). Strategies The World Bank Group is currently developing a new sector Recent sector strategies—including social and environ- strategy for Information and Communication Technologies ment—in the WBG have a substantial focus on climate (ICTs). The ICT Strategy is organized along three pillars— risks and support to climate action. WBG’s Environment connect, innovate, transform—and will elaborate how ICT Strategy articulates a vision for a green, clean, and resilient infrastructure development may contribute to climate world for all. Specifically, the clean agenda promotes miti- change mitigation—for example, through energy-efficient gation or low-carbon growth in developing countries, in data centers and transmission stations or through ICT- addition to low-pollution objectives. The resilient agenda enabled renewable energy—and adaptation—for example, focuses on helping developing countries to become better through new ways to deliver services to constituents and able to handle sudden change and avoid collapse by antici- partners in such areas as disaster risk management and cli- pating shocks and adapting to climate change. mate-resilient water management. The Social Development Strategy is based on three pillars: In a similar fashion, the World Bank Group Education social inclusion, social cohesion, and social accountability. Strategy 2020—Learning for All: Investing in People’s The mid-cycle implementation review added a fourth pillar Knowledge and Skills to Promote Development—highlights on social resilience this year, which recognizes explicitly the cross-linkages among sector strategies and emphasizes that social and distributional (including gender) dimensions of the higher-order skills ensure adequate capacity to plan and pre- climate change, disaster risk reduction, and green growth pare for anticipated climate changes. agendas as a core part of the social development agenda. The draft Energy Sector Strategy, which proposes improv- The transport sector’s follow-up to the SFDCC was framed ing access to reliable modern energy services and facilitating and supported by the World Bank Group Transport the shift to environmentally sustainable energy development Business Strategy for 2008–12, which established climate as the two overall objectives, is under consideration by the change as one of its five strategic areas for action. This Board of Executive Directors. The energy sector will con- includes adaptation and mitigation measures. A flagship tinue to give priority to projects that promote both objectives, report on Transport and Climate Change is being finalized such as extending access to electricity using additional power that emphasizes the need for a broad sector reform agenda to made available through supply efficiency improvement and motivate local action and account for cobenefits of climate protecting tree resources and health through adoption of policies and innovative finance based on fiscal incentives. high-performance cookstoves. Building on the principles set forth in the SFDCC, the energy sector has issued an opera- The new World Bank Urban and Local Government tional guidance note for screening coal projects and steadily Strategy—Systems of Cities: Harnessing Urbanization for scaled up engagement in renewable energy. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 7 The SFDCC has helped mainstream climate action across sources. This commitment was confirmed one year later in the WBG’s portfolio, but challenges remain to furthering the Cancun Agreements. the climate agenda that need to be addressed as we scale up action going forward (box 5). In Cancun, the Parties decided to establish a Green Climate Fund (GCF) to provide financing to projects, programs, poli- Action Areas 2, 3, and 4: cies, and other activities in developing countries via thematic Mobilize Finance and Markets funding windows. In Durban, the Parties endorsed the design instrument for the GCF, which had been prepared by Though growing, current international funding dedicated the Transitional Committee established in Cancun, and to climate action in developing countries covers only about 5 decided for expeditious operationalization and early capital- percent of their anticipated needs. The Copenhagen Accord ization. In Durban, the Parties established the Board of the sent an important political signal in 2009 with the commit- GCF and requested the UNFCCC secretariat—jointly with ment by developed countries to provide new and additional the Global Environment Facility secretariat—to take the resources approaching $30 billion for the 2010–12 period necessary administrative steps to set up the interim secre- (so-called Fast Start Finance) and to mobilize $100 billion tariat of the GCF as an autonomous unit within the per year by 2020 from a wide variety of sources, public and UNFCCC secretariat premises without delay. The interim private, bilateral and multilateral, including alternative secretariat will provide technical, administrative, and Box 5. Feedback from Staff: Challenges to Furthering the Climate Change Agenda The WBG faces increasing demand for grant-based support to help develop plans and projects that support climate 1.  action, and for scaled-up knowledge exchange on “what has worked elsewhere.� Making robust investment decisions is challenged by the uncertainty about climate change impacts and precise data 2.  and down-scaled models. For example, the state of the science on short-term, localized forecasts of climate change is insufficiently precise to allow for financial modeling, yet extreme climate events are already sources of large financial losses that justify adaptive measures. More needs to be done to respond to the demand for climate readiness support, including helping clients to develop 3.  a solid pipeline of “bankable� projects; building the capacity to design and execute adaptation and low-emission proj- ects in a cost-effective manner; and optimizing the distribution of efforts across regional, subregional, and national levels and to capture economies of scale in knowledge generation and diffusion. Mobilizing “baseline� financing for low-emission investments has proved difficult due to the lumpiness of many low- 4.  carbon investment projects, the long lead time in preparation, limits to absorptive capacity, and other factors. Looking forward, the Bank could look more closely into mechanisms to leverage private investment and manage risks. C arbon market activity, particularly in LDCs, has also proved challenging due to rules about project eligibility, regional 5.  programs, and the evaluation of additionality. Dedicated instruments such as the recently established Carbon Initiative for Development can help overcome these obstacles going forward. Engaging the private sector in climate change projects, especially when concessional funds are involved, has been an 6.  ongoing challenge for the IFC, particularly in terms of defining common principles for engagement. Internalizing and operationalizing lessons about the risks of climate change for investments through the development of tools and proce- dures to incorporate knowledge from ongoing investments and advice to clients has proved difficult. The flat-budget environment has made it more challenging for task team leaders to focus on climate action, though cli- 7.  mate change is acknowledged as a broad priority for all sectors and regions. Realizing climate cobenefits of local development priorities (for example, flood prevention, energy security) should be 8.  supported, as it provides an easier way to engage with clients on climate change. Staff training to re-tool teams on climate change best practices and incentives to work thematically—across traditional 9.  sector boundaries such as energy, water, and agriculture—is required. 8 D E V E LO PM E N T A N D C L I M AT E C H A N G E logistical support to the GCF’s Board until the independent funding levels of about $7 billion in pledges. As implemen- secretariat is established. The Parties furthermore invited the tation moves forward, there is a need for additional financ- Board to select the Trustee of the GCF through an open, ing—at least to cover the gap between now and the time transparent, and competitive bidding process to ensure there that the Green Climate Fund is fully operational. is no discontinuity in trustee services. The COP decided to invite the World Bank to assume the role of interim Trustee The Pilot Program for Climate Resilience (PPCR) is a pro- for a period of three years. The invitation was subsequently gram under the SCF to pilot and demonstrate ways to inte- received and a note to that effect was presented to the grate climate risk and resilience into countries’ core WBG’s Board in April 2012. While there is uncertainty on development planning processes. The pilot programs imple- the exact timing of the availability of this fund, the WBG mented under the PPCR are country-led, build on National has demonstrated innovative ways to mobilize additional Adaptation Programs of Action, and are strategically aligned resources and leverage private sector investment to finance with other sources of adaptation finance, such as the climate action with considerable success. Adaptation Fund, UNDP, and other donor-funded activities. The PPCR operates through nine country and two regional Climate Investment Funds6 pilots. Under these programs, approximately $1 billion in PPCR funding is expected to be channeled through the As momentum grows on the ground, the CIFs are emerging MDBs for projects and programs that address the impacts of as real game-changers. A partnership of five multilateral climate variability and change through mainstreaming of development banks (MDBs)7 is demonstrating what can be adaptation to climate change in development activities. done for adaptation and mitigation at scale with significant funding. For example, the CIF’s Strategic Climate Fund In 2011, seven nationwide strategic programs for climate (SCF) gives priority to highly vulnerable least-developed resilience were endorsed, including a program in countries, including the small-island developing states, to (1) Cambodia, to improve irrigation, flood, and drought strengthen the knowledge base for low-carbon and climate- management; (2) (the Plurinational State of) Bolivia, to inte- resilient growth through three programs: the Pilot Program grate resilience in water and sanitation services, food security, for Climate Resilience (PPCR), the Forest Investment and priority production systems, as well as drought and flood Program (FIP), and the Scaling Up Renewable Energy in management; (3) Mozambique, to improve the capacity of Low-Income Countries Program (SREP). roads and coastal cities to withstand climate change; (4) Nepal, to build the climate resilience of watersheds in moun- Within three years, the CIFs have moved swiftly to opera- tain regions; (5) Samoa, to build the resilience of coastal tions with activities in 46 middle- and low-income countries infrastructure, resources, and communities (as part of the implemented through country and regional pilots. They are South Pacific Regional Program); (6) St. Lucia, Grenada, St. beginning to have impacts with operational work to trans- Vincent and the Grenadines, to build national climate resil- form policy, institutions, and markets and build readiness ience (as part of the Caribbean Regional Program); and (7) for climate finance and action. The CIFs are providing Zambia, to strengthen climate resilience in Barotse and the valuable lessons on equitable governance, planning, and Kafue River Basin. The funding envelope for the programs is implementation of climate-smart development, and the nearly half grant-based, with the rest being near-zero-interest importance of engaging a range of stakeholders such as gov- credits. These countries join Bangladesh, Niger, and ernments, local communities, NGOs, indigenous peoples Tajikistan as the first 12 countries in the world to create stra- groups, other development partners, and the private sector. tegic programs for climate resilience (SPCRs) linked to their At this point, demand for CIF assistance exceeds current development plans with CIF support. Seven projects have 6 All information on the CIFs in this report is current as of February 2012. 7 Namely, the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, and the World Bank Group. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 9 been approved by the PPCR Sub-Committee for approxi- levels. The project is expected to produce higher capacity mately $121 million in PPCR funding (four projects in fiscal plants with state-of-the-art technologies, reduce the costs of 2011, three in fiscal 2012). This includes four projects concentrated solar power technology, build technical capac- approved subsequently by the World Bank’s Board (in fiscal ity, and establish performance benchmarks. These advances years 2011 and 2012) for about $96 million in PCCR fund- are expected to transform the regional market for large- ing, with cofinancing amounting to $27 million from IBRD/ scale solar technology. IDA and $21 million from other sources. The Forest Investment Program (FIP) has selected eight The Clean Technology Fund (CTF) offers countries incen- pilots to promote sustainable management of forests that tives to move forward with the demonstration, deployment, lead to emission reductions and the protection of carbon transfer, and replication of clean technologies that reduce reservoirs. The FIP endorsed four new investment plans in greenhouse gas emissions. The CTF Trust Fund 2011 for Burkina Faso and the Democratic Republic of Committee has endorsed 13 CTF investment plans with Congo, Lao PDR, and Mexico for a total of $180 million in funding allocations (and two additional investment plans grants and concessional finance. Local communities and without funding allocations) that are projected to leverage indigenous peoples’ groups have finalized the design of a an additional $36 billion in cofinancing on a $4.5 billion dedicated grant mechanism under the FIP. CTF investment. This projected leveraging ratio of more than 1:8 represents a significant investment in climate The Scaling Up Renewable Energy in Low-Income change mitigation in CTF partner countries. It is estimated Countries Program (SREP) is supporting six low-income that current CTF programs will result in 1.56 billion tons of countries (Ethiopia, Honduras, Kenya, the Maldives, Mali, CO2 reductions or avoidance. As of December 31, 2011, and Nepal) to invest in renewable energy services as a means more than 25 projects in 12 countries have been approved to expand their citizens’ much-needed energy access and by the CTF Sub-Committee totaling $1.9 billion in CTF leapfrog into climate-friendly development. Kenya has sub- funding. This includes seven projects approved subsequently mitted its investment plan for endorsement by the Trust by the World Bank Board for about $972 million in CTF Fund Committee. funding, with cofinancing amounting to $1.6 billion from IBRD/IDA and $6.3 billion from other sources. The Global Environment Facility The CTF has demonstrated that in underdeveloped but After nearly 20 years of operation, the Bank remains the promising niche markets, even limited CTF resources can Global Environment Facility’s (GEF) largest implementing significantly increase low baseline investments and lay the agency in the climate change focal area. Nearly $2 billion of groundwork for transformational change. For example, in GEF financing has been allocated to World Bank renew- Mexico, the CTF is accelerating the development of able energy, energy efficiency, and sustainable transport Mexico’s private wind market by targeting the untapped projects. Current evaluations of completed GEF projects wind power potential in the state of Oaxaca (more than indicate that GEF resources totaling about $480 million 5,000 megawatts of world-class wind potential, of which have leveraged another $4.1 billion of financing. This has only 88 megawatts are currently operational). The govern- delivered direct GHG emission reductions of over 250 mil- ment plans to use the CTF funds to build a wind power lion metric tons of CO2 equivalent. The project approaches generation plant and attract private commercial banks to and concepts supported by early GEF initiatives have laid provide debt financing for the construction and implemen- the foundation and provided models for much of the Bank’s tation of wind projects. current low-carbon development work, making use of CIF, IDA, or IBRD resources. The CTF investment in the MNA regional project is expected to support the deployment of about one gigawatt GEF received a record boost from donor countries in May of CSP generation capacity, almost tripling current global 2010, when more than 30 nations pledged $4.25 billion. The 10 D E V E LO PM E N T A N D C L I M AT E C H A N G E 52 percent increase compared with the previous replenish- emission reductions (CERs), receives funds from other ment period allowed GEF to expand its support to recipient sources, holds proceeds in a trust fund, and disburses funds countries with capacity building, climate-friendly technolo- to implementing entities at the instruction of the gies, and sustainable development. The continued uncer- Adaptation Fund Board. From its inception in May 2009 tainty about future climate policy and financing mechanisms through June 2011, 9.5 million CERs have been sold and means the successful GEF replenishment and IDA funds $163 million in associated revenue raised. offer immediate steps to program additional resources. Expanding the Carbon Markets During fiscal 2011 (the first year of GEF 5), over $61 mil- lion of mitigation projects were endorsed by the GEF Today, the Bank is the Trustee of 12 carbon funds and facil- Council and approved by the Bank’s Board. Over $11 mil- ities that support the mitigation of climate change through lion of adaptation projects were endorsed by the LDCF and carbon finance, including two new facilities that focus on SCCF and approved by the Bank’s board in the same year. post-2012 activities. Together these funds and facilities The GEF Council also approved $60 million of Bank- amount to $2.7 billion under management, of which $1.9 initiated mitigation projects and $30 million of Bank- billion has been committed to purchasing emissions reduc- implemented adaptation projects. The Bank’s Africa unit tions. Over 170 active projects in more than 50 countries are developed the Sudan-Sahelian Program, a multifocal area expected to reduce emissions by an estimated 220 million program worth $111 million that combines $14 million metric tons of carbon dioxide or its equivalent in other from the LDCF, $4.6 million from the SCCF, and $81 greenhouse gases. million from the GEF Trust Fund. Altogether, the Bank’s GEF program, combining efforts in 12 countries, is valued From forest restoration in Ethiopia to clean energy in Sub- at $1.997 billion. Saharan Africa and capacity building in Latin America, carbon finance has been integrated into the assistance pro- Facilitating Client Access to Multiple Sources of grams of all World Bank operational regions. The aim is to Financing for Adaptation deepen and broaden the Bank’s response to climate change, helping poor communities and countries cope with climate It is clear that the poorest and most vulnerable countries will change while still achieving economic growth, poverty suffer the most from the impacts of climate change. In the reduction, and sustainable development. For example, the past year IDA has seen unprecedented demand from many Community Development Carbon Fund and the Biocarbon countries for support in their efforts to address development Fund show that carbon markets can work to bring in rev- and climate change challenges. Trust funds have emerged as enue streams to rural communities that otherwise have lim- a useful complementary source of financing in many cases. ited sources of income. These initiatives not only mitigate climate change, but also improve rural livelihoods and resil- Since 2007, lending for post-disaster recovery projects alone ience to climate change, conserve biodiversity, and restore has reached $9.2 billion for 215 projects. In fiscal years degraded lands. 2009–11, close to two-thirds of all GFDRR-financed tech- nical assistance initiatives supported climate adaptation Overall, the World Bank’s carbon finance operations have cobenefits, providing more than $63 million in over 50 catalyzed and fostered the development of a global market disaster-prone low- and middle-income countries across all for carbon assets under the Kyoto Protocol. Through Bank Regions. This support leveraged an additional $153 learning-by-doing and diversification, and resource mobi- million in cofinancing from development partners, as well lization via its carbon funds, they have tested innovative as much larger amounts in World Bank investments. approaches and explored new opportunities. For instance, they have developed or contributed to new methodologies The World Bank is the Trustee for the Adaptation Fund. that open new potential for market innovation. The funds Presently, the World Bank as a Trustee monetizes certified and facilities have pioneered legal work on carbon finance A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 11 transactions, drafting prototype agreements for purchase stakeholders designed to broaden, deepen, and extend the of emission reductions in the context of programmatic duration of carbon finance, making them key instruments CDM and of assigned amount units (AAUs) in the con- in bending greenhouse gas emission trajectories globally. text of Eastern European countries’ Green Investment The FCPF has pledged funding of $436 million for capacity Schemes. They demonstrated a successful mediation pro- building and pilot performance-based payments for verified cess as an alternative dispute resolution tool to settle a dis- emission reductions from forest and land management pute with a public entity that was the counterparty in an activities. The CPF Carbon Fund has €133 million in com- emission reduction purchase agreement. The process itself mitments and another €11 million in donor contributions to and the outcome were used for the first time at the Bank to the Carbon Asset Development Fund. settle a contractual matter and the settlement documents have been made accessible to the public. Finally, carbon The Partnership for Market Readiness (PMR), a grant- finance operations at the World Bank sought to strengthen based capacity-building fund, has made significant progress the capacity of public, private, and financial stakeholders since its launch in Cancun in 2010. Twenty-five countries in developing countries to benefit from carbon asset trans- have now joined PMR, including all BASIC countries actions. This has been particularly demonstrated through (Brazil, China, India, and South Africa) and other major the CF-Assist program, whose activities help strengthen economies. With the objective to help countries pilot national institutions, foster market development through domestic emissions trading schemes and new crediting knowledge and business development platforms, and sup- mechanisms, the PMR provides capacity building in areas port strategic assessments and analytical work at the such as baseline setting, MRV, GHG accounting, and insti- national and sector level. tutional/policy frameworks. The PMR is becoming one of the most important platforms to discuss new market instru- New market initiatives emerging in developed and develop- ments and prepare countries to use them for scaling up miti- ing countries signal long-term interest in advancing carbon gation efforts. The PMR has mobilized $70 million and has market solutions—such as emissions trading in Australia or a target funding size of $100 million. California—and plans to pilot a broad range of market instruments in other countries, including Brazil, China, In Durban, the Bank launched of the Carbon Initiative for Chile, Colombia, Costa Rica, India, Indonesia, Korea, Development (Ci-Dev) to build readiness and capacity in Mexico, Morocco, South Africa, Thailand, Turkey, Ukraine, low-income countries to access carbon markets and support and Vietnam. At the same time, uncertainties on future a pipeline of low-carbon investment opportunities. The frameworks and associated demand for carbon assets beyond Bank also launched the third tranche for the BioCF to pilot 2012 are hampering market activity, with serious implica- soil carbon sequestration and explore landscape accounting tions in both capacity and confidence. While domestic and approaches with valuation of ecosystem services. international frameworks progressively solidify, the World Bank continues to innovate and build readiness to support In February 2011, IFC launched the Post-2012 Carbon future scaled-up markets and leverage its decade-long expe- Facility with €150 million in capital—€15 million from rience, which combines cutting-edge analytical and advisory IFC and the remainder from European power utilities and work and concrete piloting on the ground. energy companies. The facility will forward purchase CERs that are expected to be produced over 2013–20 from In 2007, the Bank established two new carbon facilities— projects directly financed by IFC or by local banks the Forest Carbon Partnership Facility (FCPF) to assist financed by IFC. IFC is exploring innovative debt financ- developing countries reduce emissions from deforestation ing to frontload firm carbon off-take agreements and help and forest degradation, and the Carbon Partnership Facility carbon finance projects and Programme of Activities (CPF) to scale up the use of carbon finance through pro- (PoAs) reach financial closure, despite few or no fixed grammatic and sectorwide interventions. Both the CPF and assets and substantial dependence on a future generation of the FCPF are unique partnerships among several emission reduction credits. 12 D E V E LO PM E N T A N D C L I M AT E C H A N G E Expanding Catastrophe Risk Financing insurance coverage against natural disasters through the capital markets with an inaugural issuance for Mexico ($290 Over the past decade there has been an increase in the million) in October 2009. intensity and damage caused by natural disasters world- wide. Developing countries have suffered the most. The Putting Capital Markets to Work for Climate-smart WBG is offering two complementary lines of catastrophe Investment risk financing products and advisory services to countries, as part of their broader disaster risk management strategies: The World Bank has been working with private banks to (1) sovereign risk financing for direct budget support to develop on-lending product lines, particularly for energy provide immediate liquidity should a disaster occur while efficiency in countries such as China. The World Bank other resources are being mobilized; and (2) advisory ser- Treasury is engaging with investors looking for climate- vices to strengthen domestic property catastrophe insur- related, long-term sustainable investment opportunities in ance markets to facilitate increased penetration of the capital markets. Fiscal 2009 saw the launch of the insurance in developing countries and access to re-insur- World Bank’s Green Bonds, which dedicate funding raised ance markets. to projects or programs that finance low-carbon or climate- resilient development activities in client countries. To date, Progress over the past eighteen months includes the exten- over $2.3 billion in Green Bonds have been issued through sion of index-based agriculture insurance to help farmers 46 transactions in 17 currencies. Fixed-income investors are hedge against weather risk. Weather risk management work becoming increasingly familiar with the World Bank’s progressed in Africa and Latin America. In Africa, the Green Bonds, supporting 26 climate change projects and World Bank is working with the Africa Union, the World paving the way for Green Bonds to become an asset class of Food Programme, and DFID to explore the feasibility of choice for investors interested in climate change and sus- establishing a Pan-African disaster risk pool, the Africa tainability issues. Efforts are under way in LCR to develop Drought Risk Financing facility. The Malawi Weather an innovative climate financing instrument called “Asset- derivative has been renewed for the fourth time. It is esti- Backed Green Bonds.� Drawing on the best expertise avail- mated that since 2003 about 1 million farmers and herders able, it is expected that this first-of-a-kind security will be worldwide benefit from similar schemes supported in some launched in the international bond market by a Latin sort by the World Bank Group. American energy company. With regard to sovereign catastrophe risk financing, two The IFC to date has issued five Green Bonds valued at Catastrophe Risk Deferred Drawdown Options (Cat DDO) $500 million. It is working with Treasury and the P8, a were closed in the same period for Peru ($100 million, group of the world’s largest pension funds, to explore ways December 2010) and El Salvador ($50 million, February in which institutional financing can be directed to cli- 2011). Two more, for the Philippines and Panama, were mate-friendly investment in emerging markets. closed in fiscal 2012. This brings the number of govern- Recognizing the role that MDBs can play in channeling ments covered through WBG operations to 24 (since 2005). funds and financial structuring, the WBG participates in This includes provision of financial services (catastrophe P8 meetings with selected representatives of the financial swaps) to the Caribbean Catastrophe Risk Insurance community. The IFC has engaged with Standard & Facility, a mutual insurance pool covering hurricane and Poors to develop the first Global Emerging Market earthquake risks to several Caribbean island states by facili- Carbon Efficient Index. Launched in December 2009 at tating the transfer of that risk to capital markets (through COP-15 in Copenhagen, this new index aims to encour- cat swaps, and conventional reinsurance markets), as well as age carbon-based competition among emerging market the MultiCat Program. The MultiCat Program is the first companies and give carbon-efficient companies access to catastrophe bond issuance platform to help governments long-term investors. The model has been replicated in from developing countries access affordable Brazil, Japan, and the United Kingdom. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 13 Using Guarantee Instruments Between 1997 and 2011, IFC launched fifteen sustainable energy finance programs supported with concessional fund- The WBG guarantee portfolio for climate-friendly invest- ing. This includes engagements with thirty financial inter- ments has been growing rapidly in recent years. Guarantees mediaries resulting in over twenty risk-sharing facilities, six mobilize private capital into countries and sectors with a credit lines, and one funded mezzanine facility. For the IFC, high risk perception and improve the viability of infrastruc- the risk-sharing facilities allow financial intermediaries to ture projects by significantly extending debt tenors and low- cover a portion of their risk. Concessional credit lines, on ering the cost of borrowing. the other hand, address the high cost of early market entrants. Risk-sharing facilities have evolved from first-loss The guarantee menu of the WBG includes primarily partial individual loan guarantees to guarantees on a portfolio basis, risk guarantees (PRGs), which support private sector proj- with concessional funds covering all of part of the first loss. ects by covering the risk of debt service default caused by Risks and donor first losses have been explicitly integrated government nonperformance of its contractual obligations; into the pricing methodology for risk-sharing facilities, partial credit guarantees (PCGs), which cover part of debt leading to a clearer risk-return for first and second losses. service default/credit risks of project and public sector bor- Donor funds for first losses have evolved from pure grants rowers; and policy-based guarantees (PBGs), which cover to concessional funding receiving a fee. part of debt service default/credit risk of sovereign borrow- ers for fiscal support. The World Bank has issued 37 guar- The role of guarantees in these projects is to help convince antees in 30 countries since 1994 for a total amount of $4.5 banks that their losses will not exceed those typical of their billion; $27 billion in project financing has been mobilized portfolio. In each project, an agreement is reached on the by $3 billion in PRGs. accepted level of loss and risk sharing (between IFC and the bank) for losses above that amount. Concessional funds are By supporting financial institutions, IFC and MIGA help essential for structuring the risk-sharing facility because strengthen capital and financial markets and reach out to they can assume a portion of the portfolio first losses. As of smaller clients (microfinance, leasing, trade finance, guar- February 2011, a total of $60 million of lending had been antees, housing finance, and consumer finance). MIGA mobilized for risk sharing and $65 million sourced in con- has guaranteed several clean energy projects, including cessional donor funds, including $44 million for guarantees methane gas extraction and energy production in Rwanda; and risk-sharing facilities; $18 million for credit lines; and bio-fuel in Liberia; solid waste management and energy €3.4 million for funded mezzanine financing. The losses production in El Salvador; a geothermal power plant in average less than 0.05 percent over IFC’s exposure of $302 Kenya; and a hydropower plant in Uganda. MIGA issued million in risk-sharing facilities over 14 years. $402 million in new guarantees during the period from fiscal 2008 and the first half of fiscal 2012. MIGA is cur- Action Area 5: rently assessing new applications to support renewable Support to Accelerated projects (such as PV, wind farms, and bio-fuels), REDD Development and Deployment of initiatives, energy efficiency programs, and carbon seques- New Technologies tration. Experience has shown that MIGA’s stamp of approval is important for a project’s “license to operate�— While financing is the key, it will need to be complemented especially in complex oil/gas, mining, and infrastructure with technological development and innovation, coupled projects. MIGA may be particularly relevant for develop- with large-scale deployment to have a transformational ing countries with limited baseline finance for climate impact on the trajectory of GHG emissions and resilience action but with opportunities for FDIs into these coun- to climate impacts. tries, since MIGA can provide political risk insurance for cross-border investments into the agency’s member Support to accelerate development and deployment of new countries. and innovative climate technologies is led by the IFC, with 14 D E V E LO PM E N T A N D C L I M AT E C H A N G E dedicated units in the new Climate Business Group and the (SMEs). This allows developing countries to achieve their Funds Department. A total of $154 million has been green growth objectives by promoting new domestic clean invested in eight climate change focused funds. The clean technology industries and creating employment opportuni- tech investment program reached $70 million in fiscal 2011 ties. Currently, infoDev is developing both regional and with new staff added and a future target of $150 million per global CIC networking strategies to link each center and year. IFC is increasingly promoting clean energy technology promote knowledge sharing, codevelopment of technologies, innovation through its advisory work, such as support for B2B linkages, and trade facilitation. The CIC network will building code reform, sustainable forestry, and public-pri- be linked to infoDev’s global network of 400 business incu- vate partnerships such as advising Gujarat (India) on poli- bators, which supports more than 20,000 SMEs in over 100 cies to achieve an ambitious rooftop solar photovoltaic countries. program. During fiscal 2010, the ICT Sector Unit prepared a knowl- IFC adopted a Solar Investment Strategy and initiated a edge product entitled ICT Linkages to Climate Change— Cleantech Investment Program for early-stage clean tech- Potential WBG Interventions, in which the role of ICTs in nology companies in developing countries in fiscal 2009. mitigating climate change and adapting to its impacts was Three technology innovation models (for example, regional assessed as the basis for identifying possible areas of focus energy innovation centers, technology policy support, and for WBG interventions. The assessment framework that strengthening client’s science and technology capacity) have was applied demonstrated that ICTs have the potential to been developed and presented in a technical briefing to the make a significant impact (both in mitigation and adapta- Board in January 2009. tion aspects) across multiple sectors of the economy and seg- ments of the population, and that there were many specific Substantial work is being done to accelerate the develop- opportunities and possible interventions. Among the identi- ment of new emerging technologies, including concentrated fied action items, it was determined that more rigorous solar power (CSP) and carbon capture and storage (CCS). efforts were needed to create awareness among WBG sector This can fill an important gap in the climate change area, experts, launch analytical work products to build credibility, since development, diffusion, and financing of CCS tech- and measure the impact of ICTs across multiple sectors and nology is one of the most promising means of mitigation. types of interventions. The World Bank has been managing a multidonor CCS Trust Fund since December 2009 that supports capacity Action Area 6: and knowledge sharing, assessment of the technology’s Step Up Policy Research, Knowledge, potential, and facilitates its inclusion in low-carbon growth and Capacity Building strategies. The CCS trust fund finances programs in the Mahgreb region (Algeria, Morocco and Tunisia) and eight The WBG has stepped up its analytical work across sectors other countries: Botswana, China, Egypt, Indonesia, Jordan, and issues so that client countries can use new knowledge Kosovo, Mexico, and South Africa. In addition, the Bank for informed decision making. There is a concerted effort to has examined impacts of potential CCS deployment on bridge the knowledge gap that exists in several areas of cli- electricity prices in southern Africa and the Balkans. mate change, particularly in adaptation. In addition to sev- eral flagship reports and analytical work, the WBG is As a unit of the Bank’s Financial and Private Sector actively focusing on increasing climate change awareness Development Vice Presidency, infoDev is designing and and the skills of development practitioners. launching a network of Climate Innovation Centers (CICs) to accelerate the innovation of locally relevant climate tech- Global Analytical Work nologies. CICs address barriers to innovation by offering venture financing and business acceleration services to sup- The 2010 WDR on Development and Climate Change was port local entrepreneurs and small and medium enterprises launched in September 2009. It points to the A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 15 massive funding requirements for mitigation, adaptation, Primer (2009) together provide practical guidance on adap- and technology of roughly $300 billion a year. Moreover, tation in cities. The Mayors’ Task Force on Climate Change, current efforts to mobilize funding for mitigation and adap- Disaster Risk and the Urban Poor featured a global report and tation stand at less than 5 percent of projected needs. The four city case studies (2011). report shows that a “climate-smart world� is possible if the world decides to “act now, together and differently.� Region- and Country-specific Analytical Work The Economics of Adaptation and Climate Change identifies The WBG has been working with client countries to inform development as a critical imperative in scaling up adaptation and support development planning. To further this effort, financing needs. The global report estimates that the cost the WBG has scaled up regional-scale work with client for developing countries to adapt to climate change in a countries. There is a special emphasis on defining and quan- 2-degree warmer world would be $75–100 billion per year tifying adaptation for several countries. For example, a forth- during the period 2010–50. Seven country studies— coming report on Adaptation to a Changing Climate in the Bangladesh, Bolivia, Ethiopia, Ghana, Mozambique, Arab Countries will address climate change adaptation for all Samoa, and Vietnam—as well as the synthesis report are 22 Arab countries, and provide strategic guidance on climate being integrated into the development programs of the change. Climate Risk and Adaptation in Asian Coastal Cities is countries to varying degrees. For example, the report for another example of work on adaptation. There is additional Bangladesh has been instrumental in the formulation of country-specific analytical work on adaptation options at the activities being undertaken as part of the PPCR. subregional level, such as cities in MNA and the Sundarbans in India, as well as the country level, such as Bangladesh. Low-carbon growth studies provided knowledge of the incre- mental costs and benefits of development programs with On low-carbon development, there is work on identifying lower GHG emissions. Studies have been completed for new methodologies and tools for countries interested in Brazil, China, India, Indonesia, Mexico, Poland, and South moving to that path. One report—Low-carbon Energy Africa; additional studies are under way in Colombia, Costa Projects for Development in Sub-Saharan Africa: Unveiling the Rica, Macedonia, Morocco, Nigeria, Tunisia, Uruguay, and Potential, Addressing the Barriers—presents a first-of-a-kind Vietnam. The studies directly contributed to the development inventory of clean energy projects in 44 countries in Sub- of a series of modeling tools that are now being deployed to Saharan Africa that could receive support from CDM/ support future low-carbon development planning. Findings Carbon Finance and possibly the new Climate Investment from the seven individual country studies provide a founda- Funds. Meeting East Asia’s Growing Energy Needs in a tion for Nationally Appropriate Mitigation Actions. Sustainable Manner sets the strategic direction of a sustain- able energy path for East Asia and presents policy tools and The 5th Urban Research Symposium on Cities and Climate financing mechanisms that could help in implementation. Change was held in Marseille, France, in June 2009 and Greening the Wind: Environmental and Social Considerations attended by more than 700 people from 70 countries. It fea- for Wind Power Development in Latin America and Beyond tured eight teams of commissioned researchers and 200 describes the key environmental and social impacts that are research papers selected from more than 500 initial propos- associated with large-scale, grid-connected wind power als; the publication from the symposium features edited vol- development. umes in print and online. The knowledge product—Cities and Climate Change: An Urgent Agenda—describes the chal- Tools, Methodology, and Guidance Notes lenges and impacts that climate change poses for cities worldwide, the opportunities and benefits for cities taking To complement its analytical work, the WBG has been action, and the support available from the World Bank and developing a wide range of instruments that could be used other development partners. The Guide to Climate Change by policy makers and development planners to inform and Adaptation in Cities (2011) and the Climate Resilient Cities implement climate change projects and policies. Some make 16 D E V E LO PM E N T A N D C L I M AT E C H A N G E information and data more accessible, others focus on the On water, a flagship report assesses climate change and “how-to� of a climate-friendly policy. portfolio vulnerability at the regional level. A basin-level database of climate and hydrologic indicators has been The Climate Change Knowledge Portal has been developed developed. To supplement it, a methodology report provides to provide World Bank staff and development practitioners guidance on uncertainties, decision making, and the use of with access to climate change and climate-related spatial tools. Case studies illustrating the uncertainties of the data data sets and tools for operationalizing climate resilience with respect to five basins are also included in the report. and low-carbon opportunities in development projects. The Climate Finance Options Platform—a partnership between Capacity Development UNDP and the World Bank—is serving as a one-stop knowledge virtual center on climate finance, offering practi- Climate change competencies are being built and the tioners detailed and up-to-date information for better deci- knowledge base enhanced within the WBG. Dedicated sion making. There are 61 climate funding sources analyzed programs were developed for staff with the objective of together with 23 in-depth case studies and 90 climate strengthening the WBG’s internal capacity to provide finance publications in the library, plus guides and project quality advice and timely support to our clients across sec- analysis tools in the knowledge center. tors and regions. The programs target WBG practitioners and leaders and development partners outside the Bank The MACTool builds on a prototypical version developed Group. under the Brazil and Mexico Low-Carbon Country Case Studies to bring to the public domain a free, user-friendly, The World Bank Institute provides learning modules for open-code tool aimed at enabling countries to build and government officials, policy makers, and development prac- master their own marginal abatement cost (MAC) curve. It titioners on various aspects of climate change work. For provides an economic instrument to compare low-carbon example, the Mitigation Action Implementation Network options that has been popularized by McKinsey & (MAIN) is delivering regional peer-to-peer learning. An Company at the global and country level. The EFFECT Energy Efficiency Program is being delivered to participat- model, originally developed with the government of India, ing countries. Regulators and think tanks in Vietnam, has since been applied in a number of countries. It supports Nigeria, and India have been trained to use the EFFECT open and transparent modeling and comparison of emis- model. The South-South Exchange on Agriculture is facili- sions pathways associated with a range of development sce- tating information and experience sharing between farmers narios to facilitate consensus around and planning of from developing countries. Cities have benefited from ses- low-emissions programs. sions on carbon finance capacity building. Good practice guidelines have been developed to help rel- There is an emerging focus on facilitating dialogue and evant operations account for social and gender dimensions capacity development on low-emissions development and of climate change. An operational toolkit has been prepared NAMAs in response to the requirement of the Copenhagen on the social dimensions of climate change that includes Agreement. The Bank hosted a high-level dialogue with gender aspects. public and private sector players to ensure synergies and collaboration. Toolkits and decision-making guides for adaptation to cli- mate change in the agriculture and water sectors have been Communications and Outreach developed and applied. For example, Carbon Assessment in Croplands provides estimates of soil carbon sequestration for The SFDCC had begun consultations with a wide range of more than 20 land management practices. Marginal abate- stakeholders on climate change. Conversations with civil ment cost curves illustrate the cost-effectiveness of the prac- society continue in civil society forums convened during the tices in Africa, Asia, and Latin America. WBG’s Annual and Spring Meetings. The WBG’s A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 17 commitment to such dialogue is further exemplified by the could be scaled up to deal with adaptation and mitigation in annual CIF Partnership Forum, a broad-based meeting of Africa. stakeholders, including contributing and eligible recipient countries, MDBs, the UN, nongovernmental organizations, The climate change website launched in July 2009 has more and private sector entities held each year. than 100,000 page views per year. This website is key to reporting the latest news and comments on climate change The World Bank Group has been developing communica- and disseminating various knowledge products. The blog on tion strategies around COP meetings that include organiz- Development in a Changing Climate has 90,000 page views ing events with stakeholder and client countries on relevant annually and is a forum where experts from within and out- analytical work done through the year. The Africa Region side the WBG can express their latest trials and triumphs on provided technical and communication support to the climate change. Social media—including blogs, twitter, and Africa Union to make sure that COP-17 in Durban was multimedia—have been integral parts of the communication “Africa’s COP.� It helped put forward the extent of climate strategy, enabling it to reach to a younger audience willing to change impacts on Africa and highlight innovations that engage on climate change in a more interactive way. 18 D E V E LO PM E N T A N D C L I M AT E C H A N G E Annex 2. Implementation Progress for Key Actions and Deliverables SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Enhance Collaboration with the FY09–11 Completed: Regular interaction through the UN Area 1: cooperation UN and its agencies on HLCP Working Group on Climate Change (WB Support with a coordinated approach & UNDP Co-Conveners for thematic group on Climate development to climate change, finance), joint high-level and thematic events at Action in partners particularly financing, COP-15 and COP-16, UNDP/WB Climate Finance Country-led to facilitate capacity building, and Knowledge Platform launched in Nov. 2010. Development global action monitoring Processes Joint implementation of FY09–10 Completed: CIFs ($7 billion in pledges) are CIFs with other MDBs now playing a key role in meeting international climate change objectives with activities in 46 countries through 39 country and regional pilots. New partnerships FY09–10 Completed: Several new partnerships established, particularly established around financial products, shared to facilitate the work operational issues, and technical issues. For on technology and example, in partnership with GIZ, the WB adaptation organized a training workshop on adaptation tools for the government of Mexico. The WB has engaged in partnerships with University of Cape Town and Columbia University for climate data sharing and knowledge management. Support Actions to strengthen FY09–11 Completed: Actions to address climate climate climate resilience resilience were specified1 in 9 (41 percent), actions by are supported by 11  (65 percent), and 13 (76 percent) of CASs/ operational several CASs, with an CPSs approved in FY09, FY10, and FY11 strategies estimated demand by respectively. at least ten countries with high vulnerability to climate risks Support to climate FY09 Completed: The IFC has designated climate actions included in change as one of its corporate strategic business strategies for priorities and adopted a new Solar Investment WB regions, MIGA, and Strategy. A regional strategy for climate resilient IFC growth in Africa and a report on climate change in South Asia to guide SAR activities have been completed, as have climate change papers and/ or business plans in EAP, ECA, LCR, and MNA. MIGA has added to its annual business plans its desire to support climate change projects when pursued by private sector investors. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 19 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Support Urban Strategy update FY09 Completed: Urban Strategy includes climate Area 1: climate includes consideration change and disaster management as one of its Support actions by of climate risks and five business lines. Climate operational support to climate Action in strategies actions Country-led (continued) Energy Sector Strategy FY10 Progress made: The proposed World Bank Development includes consideration Group Energy Sector Strategy includes Processes of climate risks and consideration of climate risks and support to (continued) support to climate low-carbon energy sector development efforts. actions Social Development FY10 Completed: Mid-Cycle Implementation Progress Strategy update Review (MCIPR) of the Social Development includes consideration Strategy was endorsed by CODE in May of climate risks and 2011. Alongside the existing three pillars of support to climate the strategy—social inclusion, social cohesion, actions and social accountability—the MCIPR adds a fourth pillar on social resilience, which recognizes explicitly the social and distributional (including gender) dimensions of the climate change, disaster risk reduction, and green growth agendas as a core part of the social development agenda. Environment Strategy FY11 Completed: New WBG Environment Strategy update includes has been endorsed by CODE and a new consideration of climate Environment Strategy was approved by the risks and support to Board in 2012. The strategy articulates a vision climate actions for a green, clean, and resilient world for all. Two elements of this vision, namely clean and resilient, will directly address climate change concerns. ICT Strategy update FY11 Progress made: New WBG Strategy for includes consideration Information and Communication Technologies of climate risks and (ICTs) at consultation stage. The ICT Strategy support to climate will take a cross-sectoral approach, including actions climate change. (continued on next page) 20 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Support A plan for FY09–10 Completed: The Bank has adopted a Area 1: climate strengthening comprehensive climate risk management Support actions in synergies between approach focused on mainstreaming disaster Climate lending support to disaster risk management (DRM) and climate adaptation Action in programs risk management and (CCA) in development as reflected in both the Country-led support to adaptation Cancun and Durban WBG adaptation building Development developed and blocks and exemplified by the adoption of a Processes implementation started joint GFDRR-ENV work program for FY12. Over (continued) two-thirds of CAS/CPSs adopted in FY10– 11 recognized disasters as a challenge to the strategy’s implementation, half identified DRM as a cross-cutting strategic issue, and 15 set DRM as a distinct pillar of their strategy. This strategic recognition of DRM is leading to major investment in disaster and climate-resilient development, with real results on the ground. Reflecting this, in FY09–11 the WB has financed 15 operations totaling $1.15 billion that pursue DRM and CCA objectives in an integrated manner across all Bank regions. Over the same period, CCA was firmly established and operationalized as an integral part of the GFDRR mandate and a core pillar of its business plans with a focus on providing country-level climate change information, strengthening weather and climate information systems, helping countries access climate risks, including post-disaster, promoting climate risk financing and transfer solutions, and scaling up community adaptation. For the 31 GFDRR priority countries, 30 national DRM and CCA programs have been adopted and one is under completion. Close to 80 percent of the GFDRR portfolio and pipeline focus on climate change adaptation in AFR, EAP, LCR, MNA, SAR, and, globally, leveraging significant IDA, IBRD, and CIF resources. Screening of relevant FY09 Progress made: Work has been carried out projects for climate and published on the impact of climate change risks and sectorwide on hydrologic indicators and exposure risk at vulnerability the level of catchments (8,400 catchments for assessments introduced six Bank regions). This will form the basis for project-level screening for climate risk. The specific mechanism for how to do so in a manner that is both robust and operationally relevant is currently under consideration. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 21 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Support • starting with Completed: A hydropower toolkit has been Area 1: climate hydropower projects delivered. Gaps in global knowledge and Support actions in analytical uncertainties necessitate additional Climate lending work to develop operational applications. Action in programs • extending to other FY10–11 Progress made: Following the IDA16 Country-led (continued) vulnerable sectors replenishment that included climate-resilient Development within regional development as a special theme, work has Processes context begun on developing screening approaches (continued) to assess vulnerability of country assistance / partnership and sector strategies. • methodology for FY11 Completed: The Urban Risk Assessment citywide climate Framework has been developed for assessing vulnerability disaster and climate risk in cities to enable assessment informed decision making and urban planning developed in the design of risk management programs. The URA provides a full picture of hazard risk at the city level, an assessment of vulnerable populations, and a mapping of relevant institutions pointing to gaps and duplications in roles and responsibilities. The URA tool has been implemented in several cities, such as Dar es Salaam, Jakarta, Mexico City, and São Paulo over the past year with very positive results. Screening for EE FY09 Completed: A comprehensive assessment opportunities in of opportunities for screening for EE was infrastructure projects implemented during CY2010. The activity introduced looked at all projects categorized as having an energy component and evaluating these • starting with energy projects for missed EE opportunities. Of the sector projects 63 projects screened, two-thirds were found to have EE built in, and just 5 were found to have missed opportunities. However, coding of projects remains an issue, as it was noted that a third of these reviewed energy sector projects had EE components but were not reported as EE projects in terms of coding. The detailed findings of the EE screening evaluation are provided in the final report, which can be downloaded at: http://intresources.worldbank. org/INTENERGY/Resources/Energy_Efficiency_ Screening_FINAL.pdf. (continued on next page) 22 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Support • extending to FY10–11 Progress made: A primer on EE for municipal Area 1: climate transport, water, and water and wastewater utilities jointly undertaken Support actions in urban projects by ESMAP, Water Anchor, and WSP provides Climate lending information on opportunities and good Action in programs practices for improving EE and reducing Country-led (continued) energy cost in municipal water and wastewater Development utilities. The primer highlights energy-saving Processes opportunities and viable potential in water and (continued) wastewater utilities. • comprehensive FY11 Progress made: In 2007, an EE Scale-up Action approach to Plan for the World Bank was prepared to promoting EE in WB identify steps required to ramping up the scale operations developed and scope of EE in operations. This plan is in the process of being updated to incorporate lessons learned from the rapid expansion of the EE portfolio within the energy practice during the last few years. The update will include lessons learned from projects in recent years, and discuss the institutional, operational, and organizational issues and knowledge gaps that remain, and how they could be addressed to further support the scale-up of EE operations in the World Bank. The recommendations will also draw on the lessons learned from the EE screening exercise (CY11), and are expected to include steps to explore approaches to tap into more EE opportunities. Increase in WBG FY09–11 Completed: The WBG’s renewable energy financing for new RE portfolio more than doubled from $2.9 billion and EE by an average in FY06–08 (18 percent of total WBG energy of 30 percent per financing in the period) to $6.6 billion in FY09– annum 11 (22 percent). The share of total WBG energy financing for low-carbon projects rose from 42 percent to 51 percent. FY11 marked an all-time record in WBG low-carbon financing, with $5.9 billion in new commitments. Compared to a target average annual increase of 30 percent in financing for new renewable energy (new RE) and energy efficiency (EE) to FY11, amounting to total financing of about $6 billion over FY09–11, the WBG’s financing for new RE and EE actually increased by about 48 percent per annum, and totaled some $9.2 billion.2 (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 23 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Support WBG low-carbon FY11 Completed: The share of low-carbon projects3 Area 1: climate energy projects share increased from $6.76 billion (42%) in FY2006–08 Support actions in reaches 50 percent to $14.9 billion (51%) in FY2009–11. Climate lending Increased demand FY11 Completed: The share of the roads and Action in programs for and lending in highways subsector has decreased (from Country-led (continued) support of modal shifts 88  percent in FY01 and 76 percent in FY06 to Development in freight and public 50 percent in FY10 and 65  percent in FY11). The Processes transport (as compared share of the railways subsector has increased (continued) to FY06–08) (from 1  percent in FY01 and 6  percent in FY06 to 14  percent in FY10 and 16  percent in FY11). Engagement in the urban transport subsector increased over time (“General Transport,� with an urban transport majority, from 9  percent in FY01 and 13  percent in FY06 to 29  percent in FY10). A program to assist FY09–11 Completed: Projects in more than 5 cities with sustainable approved for sustainable urban investment: urban investments is $25 million IBRD for improved solid waste developed and piloted management and landfill operation in Amman, in at least 5 cities with associated carbon finance operation; $200 million from CTF and $200 million from IBRD for the transformation of urban transportation in Mexican cities, focusing on integrated mass transit corridors and low-carbon vehicle technologies; CTF Investment Plan for Thailand includes $70 million for urban transformation in Bangkok to cofinance the development of a bus rapid transit (BRT) system, and investments in energy efficiency for municipal facilities and public spaces, focusing on electrical appliances and air-conditioning; Brazil integrated solid waste management and carbon finance project, $50 million IBRD—supports municipalities throughout Brazil to invest in solid-waste-related infrastructure, which also reduces methane emissions. Develop an A set of definitions and FY09 Completed: Development of both actions. outcome- outcomes developed by Outcome-based results framework completed based results the WBG and included as part of this report. framework Improved climate- FY10 Improved climate-related portfolio tracking related portfolio system has been developed and adopted to tracking track IDA and IBRD lending and nonlending activities. New system will be fully integrated into Bank operating systems by the beginning of FY13. (continued on next page) 24 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Increase Maintained or increased FY11 Successful IDA replenishment based partially Area 2: access to IDA replenishment on increased needs for supporting climate Mobilize additional levels, and improved resilience in client countries. Additional finance to tracking of ODA Completed: System for tracking climate Concessional cover higher to climate-related cobenefits in the IDA portfolio developed and costs and actions, mitigation, and during FY11, to be piloted in FY12, and will be Innovative risks adaptation (with DAC) introduced Bank-wide at the beginning of FY13. Finance Climate Investment FY09 Completed: CTF and PPCR became operational Funds operational with in FY09, with pledges of over $6 billion (now a target of $6 billion $7 billion). The FIP and SREP under the SCF became operational in the first half of FY10. $4.4 billion has been allocated for CTF investment plans leveraging other resources 1 to 8. Across the CTF and PPCR, activities are ongoing in over 20 countries. Country-level activities FY11 Completed for all programs under the SCF start under FIP and PPCR: SREP; implementation • 13 Strategic Programs for Climate Resilience of strategic programs endorsed by Sub-Committee for starts under PPCR approximately $1 billion in PPCR funding: Bangladesh, Cambodia, Grenada, Mozambique, Nepal, Niger, Samoa, St. Lucia, St. Vincent and the Grenadines, Tajikistan, and Zambia (FY11); the Plurinational State of Bolivia and Jamaica (FY12); • 7 projects approved by Sub-Committee for approximately $121 million in PPCR funding (4 projects in FY11, 3 in FY12); • of which 4 projects approved by World Bank Board (in FY11 and FY12) for about $96 million in PCCR funding (cofinancing: $27 million from IBRD/IDA and $21 million from other sources). FIP: • 4 Investment Plans endorsed by Sub- Committee for $180 million in FIP funding: Burkina Faso and Democratic Republic of Congo (FY11), Mexico and Lao PDR (FY12); • 1 project approved by Sub-Committee for approximately $42 million in FIP funding (FY12), and subsequently approved by World Bank Board (cofinancing: $350 million from IBRD/IDA and $333 million from other sources); • local communities and indigenous peoples’ groups are in the process of finalizing the design of a Dedicated Grant Mechanism for Indigenous Peoples and Local Communities. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 25 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Increase Country-level activities SREP: Area 2: access to start under FIP and • 4 Investment Plans endorsed by the SREP Sub- Mobilize additional SREP; implementation Committee for $160 million in SREP funding: Additional finance of strategic programs Honduras, Kenya, Mali, and Nepal (FY12) Concessional to cover starts under PPCR • 1 project approved by Sub-Committee for and higher costs (continued) approximately $25 million in SREP funding Innovative and risks (FY12). Finance (continued) Increased leverage of FY09–11 Completed: (continued) GEF funds through • Over FY09–11, $239 million in GEF, LDCF, and programmatic SCCF funding helped green World Bank and approaches IFC projects worth $979 million, with other cofinancing of $1,602 million. • In FY11, the Bank’s Africa unit developed the Sudan-Sahelian Program, a multifocal area program worth $111million, combining $14 million from the LDCF, $4.6 million from the SCCF, and $81 million from the GEF Trust Fund. Altogether the program, combining efforts in 12 countries, is valued at $1,997 million. Guidelines to help FY09 Completed: Draft paper comparing use of GEF, access various financing CTF, and CF instruments prepared in June 2009. instruments and reduce Prototype Climate Finance Knowledge Platform transaction costs developed. prepared Guidelines extended FY11 Completed: Knowledge Product— Concessional to a broader range of Climate Finance: MDB Experience and instruments Opportunities —completed in FY11. Climate Finance Options Knowledge Platform developed as joint product by WB and UNDP, launched at COP-16 in Nov. 2010 and WB DGFR funding provided 2011–2013 for continuous expansion and fundraising for long-term sustainability. Country-specific versions under development. WBG-wide Ad-hoc Climate Finance Expert Group established in FY10. (continued on next page) 26 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Increase FCPF rolled-out: Progress made: Key milestones, on the path Area 3: access to from REDD+ Readiness to carbon finance: • at least 18 readiness FY09 Facilitate the market grants provided; • Out of 37 developing forest countries Development products, • at least 5 countries FY10 participating in the FCPF: 16 Readiness of Market- including for have successfully built Preparation Proposal (R-PP) Formulation grants based REDD and FCPF capacity; signed; Financing adaptation • Readiness Preparation FY11 27 countries have prepared R-PPs, with 19 R-PPs Mechanisms Proposals assessed, assessed and Readiness Preparation Grants national working allocated; groups on REDD+ to 4 Readiness Preparation Grants signed: guide policy dialogue Democratic Republic of Congo, Indonesia, and established, and Nepal (FY11), Ghana (FY12); broad-scoped Common Approach to Environmental and consultations on Social Safeguards for Multiple Delivery Partners REDD+ strategy approved, for enhanced Readiness service initiated, in 15 coverage. countries • Carbon Fund operational since May 2011 with $206 million in pledges • Pledged funding to FCPF amounts to $436 million, for initial target of $385 million; request to approve higher ceilings for Readiness Fund ($300 million) and Carbon Fund ($350 million). CPF operationalized: FY09 Progress made: CPF Carbon Fund operational May 2010. • initial capitalization of at least / about €350 €133 million in commitments to Carbon Fund million and €11 million in donor contributions to • 12–16 CPF Emission Carbon Asset Development Fund. Reduction Programs 8 emission reduction programs under developed development with 7 CPF Seller Participation Agreements signed and 1 program formally included in Carbon Fund portfolio FY11. Access to climate risk FY10 Progress made: Weather Risk Management for management products the period 2010–2011: and reinsurance markets • Weather Risk Management work in progress in increased LAC Region (hedging products); • Africa Drought Risk Financing facility: The World Bank is currently working with the Africa Union, the World Food—Programme, and DFID to explore the feasibility of establishing a Pan-African disaster risk pool; • 4th renewal of the Malawi Weather derivative. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 27 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Increase MIGA guarantee FY09–11 Progress made: Market conditions after 2008 Area 4: leveraging instruments increasingly financial crisis led the private sector to defer Leverage of private used for 2 low-carbon investment decisions in infrastructure and low- Private Sector investments (RE/EE) investments carbon projects. The 2012–13 pipeline includes Resources over FY09–11 several projects deferred from earlier years. Innovative financing FY09–11 Completed: Growing portfolio of low-emission packages combining projects with innovative financial structures CF, GEF, and/or CIF achieve high leverage. These projects at IFC to leverage private are managed by the “FinMech� group: 2 such investments structured projects were approved in FY09, 3 in FY10, and and applied by IFC (at 9 in FY11. Leverage over the 3 fiscal years was least 10 during FY09–11) over 9.6 and in FY11 over 12. IFC leverage of FY11 Completed: Preliminary results for FY11 exceed low-carbon private 4 to 1 ($11 billion in clean energy investments investment is at least 4 with IFC participation of $1.6 billion, or 7 to 1 to 1 in dollar values ratio) Subnational-level FY09 Completed: Three subnational operations with application of financial climate change cobenefits approved by the tools is tested for Board in FY09: projects with climate • Panama Canal expansion, where the water- cobenefits—at least saving design of the new locks will make canal 3 in a pilot phase operations more resilient to climate variability (further estimates to be and the wider locks will allow larger, more fuel- provided if/when post- efficient shipping ($300 million as part of a pilot stage approved) consortium funding this $5 billion investment). • Istanbul metro project finances a 22-km extension of the existing system, allowing an estimated daily ridership of 450,000 by 2012 to avoid a heavily congested traffic corridor (€50 million as part of a consortium funding this €750 million investment). • Mytischi Heating (Russia) aimed at expansion and refurbishment of district heating system, leading to savings of 5 million m3 of natural gas annually and 3,000 MWh of electricity, while improving heat services for 10,000 people ($9 million investment as an expansion of an earlier Bank-financed upgrade project). (continued on next page) 28 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Develop new Proposals for FY09 Completed: IFC Solar Investment Strategy Area 5: partnerships supporting clean adopted and a Cleantech Investment Program Support and energy technology initiated for early stage cleantech companies Accelerated approaches innovation prepared by in developing countries (FY09). Three Development for technology IFC and WB technology innovation models (e.g., regional and cooperation energy innovation centers, technology policy Deployment support, and strengthening client’s science and of New technology capacity) developed and presented in Technologies a technical briefing to the Board in January 2009; ongoing and growing within IFC with dedicated units in the new Climate Business Group and the Funds Department. Program to support FY10 Progress made: Climate Innovation Center technology innovation (CIC) global report delivered. CIC country piloted business plans developed for India and Kenya. CIC’s feasibility under way in Ethiopia, South Africa, and Vietnam. Funding secured for Kenya CIC launch in late 2011. Ethiopia and India CICs to follow in 2012. Work by CGIAR FY09–11 Progress made: Climate Change Agriculture and on climate-resilient Food Security CGIAR Research Program approved agriculture technologies by a CGIAR Fund Council Nov. 10—a 3-year scaled up (measured by program, total budget of $392 million focused on increase in funding) delivering technologies and policies that support smallholder farmers adapt to climate change. Preliminary work had begun in 2009 and 2010 in preparation of approval of this program. Action Advance The global economics FY10 Completed: December 2010. Additional Area 6: knowledge on of adaptation dissemination activities ongoing. Global Step Up climate and study completed report and 11 background reports completed Policy development and improved September 2009. Seven country reports and Research, the knowledge of associated background papers completed Knowledge, adaptation processes, December 2010. Country studies have been and Capacity costs, and benefits integrated into development programs of the Building countries to varying degrees. Synthesis report completed December 2010. Low-carbon growth FY09 Progress made: Low-carbon growth studies studies provided were under way in Brazil, China, India, Mexico, knowledge of the and South Africa in FY09, but due to a variety incremental costs and of factors (including enhanced remits, national benefits of development political considerations, and challenges programs with lower obtaining data) the studies were completed GHG emissions— in FY10 and FY11. Indonesia and Poland at least 5 studies were added to the group of countries being completed in FY09 supported, resulting in the completion of 7 studies as of FY11. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 29 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Advance WDR 2010 on climate FY10 Completed: WDR 2010 launched September Area 6: knowledge on change launched 2009. Step Up climate and and contributed to Policy development global knowledge and Research, (continued) dialogue Knowledge, Monitoring on global FY10 Completed: Tracking system for climate and Capacity climate action improved, cobenefits to be introduced as mandatory Building through joint effort with in World Bank in FY13. Shared with MDBs (continued) the UN and OECD, and and OECD DAC in March 2011 as basis for reported in flagship harmonizing systems worldwide. WBG knowledge products (such as WDI) Develop and Good practice FY09 Completed: Operational toolkit prepared test new guidelines to help on the social dimensions of climate change analytical relevant operations (including gender aspects). tools account for social and In addition, more specific sets of guidance gender dimensions notes have been completed or are under of climate change preparation based on good practices in prepared addressing social aspects of the following types of operations: • Poverty and Social Impact Analysis (PSIA) for climate change and green growth development policy operations (DPOs) • Community-Driven Development (CDD) and climate resilience • Climate-responsive social protection • Social risks and opportunities in carbon finance • Benefit sharing and carbon rights in REDD+. Toolkits and decision- FY09–10 Completed: A flagship report that assesses making guides for climate change risks and portfolio vulnerability adaptation / mitigation at the regional level has been delivered for the to climate change in water sector. A basin-level database of climate agriculture and water and hydrologic indicators was developed with sectors developed and the methodology report that provides guidance applied on uncertainties, decision making, and use of tools. Case studies illustrating the uncertainties of the data with respect to five basins were also presented. (continued on next page) 30 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Develop and Toolkits and decision- FY09–10 Progress made: ESW on carbon assessment Area 6: test new making guides for in croplands produced bounded estimates Step Up analytical adaptation / mitigation of soil carbon sequestration for more than Policy tools to climate change in 20 land management practices; geospatial Research, (continued) agriculture and water modeling/database revealed mitigation Knowledge, sectors developed and potential of key land management practices; and Capacity applied Marginal abatement cost curves illustrated cost- Building (continued) effectiveness of the practices in Africa, Asia, and (continued) Latin America. Will be delivered in FY12. FY10–11 Progress made: KP on piloting the ex ante carbon balance tool developed by FAO in the WB regions. KP in the form of a report with case studies of the appraisals performed, and would include analysis on the advantages and shortcoming of the EX-ACT in assessing the carbon balance of ARD projects, along with an assessment of their cost-effectiveness. To be delivered in FY12. GHG analysis is FY09–11 Completed: IFC’s analysis ongoing and developed and applied expanded plans going forward. 1. Carbon in IFC real investment Emissions Estimator Tool now online; 2. portfolio and select WB Analytical methods for evaluating financial sector energy, transport, and and advisory services under development; 3. forestry sector projects Back-fill analysis completed to review 1,300 real sector projects in IFC’s portfolio as of July 1, 2009; 4. Pilot project under way is testing methodologies for evaluating GHG abatement from climate-related investments. GHG analysis piloted in select energy, transport, and forestry sector projects at the World Bank. Progress made: Tools and methodologies identified for a number of WB projects across energy, transport, and forestry. GHG emissions assessment from investment lending operations in the three sectors likely to be phased in as a World Bank business requirement over two years starting in mid-FY13. (continued on next page) A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 31 (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Capacity Country-level expertise FY09–11 Progress made: Carbon Finance Capacity Area 6: building and capacity to manage Building (CFCB) program in emerging Step Up development–climate megacities of the south: 4 cities—Dar es Policy linkages and access Salaam; Jakarta; Quezon City; São Paulo—are Research, to additional finance participating; capacity building to facilitate Knowledge, strengthened inclusion of carbon finance options in low- and Capacity emission development; PINs developed. Building Progress made: Climate-smart agriculture (continued) project in Kenya; provided support for methodology development; additional TA to be delivered. Completed: PoA Rural Energy Agency in Tanzania; provided TA including 3 tailor- made trainings on know-how/tools to support establishment of coordinating entity; 2 PINs were created. Potential of existing FY09 Completed: A new joint program with UNDP to programs reviewed develop a Climate Finance Knowledge Platform and enhanced, and a established and generated broad support and coordinated program interest from other development partners. with UN agencies developed Wide coverage of FY 09–11 Progress made: Mitigation Actions staff and managers Implementation Network (MAIN): LCR delivered by specialized to 9+ countries. training programs Progress made: Energy Efficiency Program for on development and E. Europe: 3 participating countries. climate change; climate issues included in other Progress made: South-South Exchange on training programs, as Agriculture: India-Kenya exchange on SRI; 2,000 appropriate farmers benefited. Progress made: Cities and Climate Change Program: 4 participating cities. Completed: Development Marketplace (DM) for Adaptation: 27 DM finalists selected and grant agreements completed. Progress made: Global and regional carbon forums: 3 global and 9 regional forums. Progress made: Regional CDM workshops: 12+ regional workshops (but moving from CDM to LED/NAMA content). Progress made: E-learning platforms: E-courses in 4 thematic areas. (continued on next page) 32 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) SFDCC Products/Processes/ Time Objective Action Indicators Line Deliverable Status Action Capacity Number of training FY09–11 Completed: Ten in-country training sessions in Area 6: building sessions held in client FY11; 7 in FY10; 14 in FY09 (gradual shift toward Step Up (continued) countries (and staff regional deliveries and through e-learning). Policy covered) Research, Enhanced skill mix to FY10 Completed: Knowledge, support climate actions  irst Mitigation Actions Implementation • F and Capacity (in client countries) Network (MAIN) workshop focused on Building supporting development of NAMAs: 9+ LAC (continued) countries;  lobal Carbon Expo: 2600+ private sector and • G government participants (38 countries hosted official pavilions) plus regional forums.; • E-Learning Platform; • Cities and Climate Change program (carbon finance capacity building) established; • South-South Knowledge Exchange Program (Kenya-India) established for agriculture. Outreach and Communication and FY09–10 Progress made: communication outreach plans for  elivery of COP and other event/report- • D the implementation related communication strategies designed phase developed and and implemented; implemented • Climate change website fully operational with nearly a 100,000 page views per year; • Social media integrated into all communication plans related to climate change. The climate change blog has nearly 90,000 page views annually. The climate change twitter feed has 5,000 followers; • A mechanism set up to integrate all Bank regions working on messaging around the SFDCC with an effort to develop a common climate change communication strategy by the Sustainable Development Network of the Bank. GHG emissions for all FY 11 Completed: The WBG is committed to reducing WBG offices enrolled its corporate GHG emissions from daily operations in the carbon-neutral supported by a comprehensive program to program reduced by measure and manage its emission sources. The 7 percent by 2011 & WBG enrolled offices (that is, HQ) achieved more remaining emissions than a 7 percent reduction in GHG emissions offset by purchase of by 2011 and all WBG offices globally have carbon credits maintained carbon neutrality since 2009. Sufficient information about the actions was provided. 1  Following a review completed in FY11, it was discovered that WBG financing for new RE and EE over FY05–07 was under-reported. Therefore, the 2  baseline against which WBG increases in financing for new RE and EE are measured is revised from $600 million to $898 million. Defined as: Renewable energy projects (including all sizes of hydropower projects), energy efficiency improvement, power plant rehabilitation 3  to improve efficiency; district heating; biomass waste–fueled energy; gas-flaring reduction; and increased use of cleaner fuels to displace more carbon intensive fuels. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 33 Annex 3. the projects in the pipeline for fiscal years 2009–12 and 30 percent of the AAA tasks contribute (directly or indirectly) Highlights of Addressing to implementation of the strategy. Highlights of the Bank’s Climate Change-related engagement in the African climate agenda follow. Programs in the World Supporting Low-carbon Growth Bank Regions Forests and REDD+. Deforestation, forest degradation, and Africa Region (AFR) land-use changes represent the major source of greenhouse gas emissions (75 percent) in the region. Sustainable man- Making Development Climate-Resilient. A World Bank agement of forests is therefore a major avenue for mitigating Strategy for Sub-Saharan Africa, the Region’s climate climate change and ensuring the sustained carbon sink change strategy, operationalizes the climate action frame- function of the Congo basins and other major forested areas. work defined at a corporate level by the SFDCC. The It is a good strategy for African countries to adapt to climate regional strategy calls for support to mainstream climate changes and preserve environmental services. action into country and regional programs across four pil- lars: (1) making adaptation and climate risk management a The Bank has been working closely with countries in the core developmental component; (2) taking advantage of Congo basin and with dry forest countries (for example, mitigation opportunities; (3) focusing on knowledge and Burkina Faso) to help them seize opportunities afforded by capacity development; and (4) scaling up financing the REDD+ mechanism. The World Bank’s assistance mate- opportunities. rializes through a range of instruments, including (a) analyti- cal work on current and future drivers of deforestation in the Implementation of the strategy over the last three fiscal years Congo Basin, (b) technical assistance for REDD-readiness has resulted in significant scaling up of the Bank’s work on (though the $35 million for FCPF for country-level work the climate agenda. Climate change has been included as a and $13 million from the GEF for regional work in the major theme in the CAS/CPS of over 13 countries in Sub- Congo Basin); and (c) investments (through the FIP, $100 Saharan Africa (during fiscal years 2009–10), laying the million in DRC, Burkina Faso, and Ghana) (box 6). ground for strategic engagement through analytical work, lending, and technical assistance. A preliminary review of Agriculture. The Bank is promoting the “climate-smart the region’s work program suggests that some 60 percent of agriculture� agenda (higher yields, higher climate resilience, Box 6. Humbo (Ethiopia), a BioCF Project The Humbo Project (Ethiopia) is the first large-scale forestry Clean Development Mechanism (CDM) project in Africa to be reg- istered with the United Nations Framework Convention on Climate Change (UNFCCC). Humbo is 420 km southwest of the Ethiopian capital of Addis Ababa, with a population of 48,893. More than 85 percent of its residents live below the poverty line. Three decades ago, this area in the Great Rift Valley was covered with a dense jungle but with variable rainfall, environ- mental degradation, and (in the 1980s) severe food shortages. The lush green forests had turned into a barren stretch. Seven forest cooperatives were legally established—with local communities, representatives from World Vision, and the Ethiopian Forestry Department—to manage and reforest the land surrounding Humbo. The project uses a technique called farmer-man- aged natural regeneration (FMNR), which is a system of farm tree and forest regeneration that has been developed and refined for over 20 years in West Africa. The WBG’s BioCarbon Fund will purchase 165,000 metric tons worth of these credits and will provide an income stream of more than $700,000 to the local communities over a minimum of 10 years. The regeneration proj- ect has resulted in an increased production of wood and tree products, such as honey and fruit, which contribute to household economies. Improved land management has also stimulated grass growth, providing fodder for livestock. The money from carbon credits is being used for social benefits, like building a granary for the local community. 34 D E V E LO PM E N T A N D C L I M AT E C H A N G E and reduced emissions) through IDA financing for the SREP program is promoting low-carbon energy access investment frameworks that countries are developing under through smaller scale or off-grid solutions, working in par- the Comprehensive African Agriculture Development ticular with Ethiopia, Kenya, and Mali. Programme (CAADP). In Kenya, the Bank is supporting a pilot program aimed at supporting the adoption by small- Building Climate Resilience holder farmers of innovative sustainable agricultural land management practices. These practices will raise farm pro- The Bank is engaged in strengthening the climate resilience ductivity levels, enhance their resilience to climate shocks, of sectors vulnerable to drought, floods, and other climate and enable them to receive payments from carbon markets hazards, such as agriculture and urban development. Under for enhancing the storage of carbon in agriculture soils. the Pilot Program for Climate Resilience, the Bank is assist- This can pave the way to develop a broader soil carbon ing (with financial packages of $50–$100 million per coun- market in Africa, which according to one estimate, has the try) Mozambique, Niger, and Zambia to mainstream potential to mobilize resources of the same order of magni- adaptation to climate variability and change in core develop- tude as current Official Development Assistance (ODA) to ment programs. The PPCR provides support for improved the region’s agriculture. weather forecasting and information, improved land and water management, enhanced agricultural productivity and Energy and Transport. Bank lending in energy and trans- intensification, enhanced climate resilience in infrastructure port averages $2 billion per year to support the region’s design and management, and reduced vulnerability of effort to fill the gap in infrastructure stock and the quality coastal zone development to floods and sea level rise. of service provision. Increasing efforts have being devoted to promote low-carbon solutions for the region’s infrastructure In drought-prone Ethiopia, the Bank is supporting gov- development challenges. For example, the Lagos Bus Rapid ernment efforts through the Productive Safety Net Transit project in Nigeria has provided $100 million to Program worth $2.1 billion (of which $480 million is transform a congested system into a model that is faster and World Bank financing) to improve the effectiveness of the cheaper, creating jobs and reducing carbon emissions by 20 country’s system to assist chronically food-insecure rural percent. In the energy sector, the Lighting Africa initiative households. The Bank is working with the government to aims to bring light to 250 million Sub-Saharan Africans by integrate additional drought risk management measures 2030 through high-tech compact fluorescent lamps and into the program. In Madagascar (a country chronically light-emitting diodes powered by renewable energy sources exposed to cyclones), the Bank has been supporting and mechanical means. The Bank is engaged in promoting hydro-meteorological risk assessment for agriculture, geothermal energy developments in the East Africa Rift cyclone impact modeling, updating of infrastructure Valley, and supporting hydropower expansion or rehabilita- norms and standards, vulnerability analysis for drought- tion (for example in Ethiopia and Nigeria). prone areas, an analysis of historical and projected climate change, and technical assistance and capacity building for An important impetus for the Bank’s work on low-carbon local entities. development has been provided by the CIFs. The Bank has mobilized, in partnership with the Africa Development Bank, Through the TerrAfrica partnership (kick-started by the resources to finance a $2.3 billion Investment Plan in South Bank and currently housed in NEPAD/Africa Union), the Africa (including a $500 million contribution from the Clean Bank has helped prepare and finance two umbrella invest- Technology Fund). The plan supports a grid-connected solar ment programs to improve land management and support thermal power plant, utility-scale wind power development, climate resilience. The first is the $1.25 billion Strategic solar water heaters, and energy efficiency. In Nigeria, a $250 Investment Program (SIP) for Sustainable Land million CTF investment has been approved, and will finance Management (SLM), which has 36 operations in 26 coun- low-carbon growth in urban transport, clean energy, and tries (12 of which are Bank-financed). The SIP has energy efficiency through financial intermediation. The expanded SLM practices on an estimated 250,000 hectares A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 35 of land. The second umbrella is the nearly $2 billion Knowledge and Capacity Development WB-GEF Sahel and West Africa Program (SAWAP) in support of the Great Green Wall Initiative, which was A strong program of analytical and advisory activities (AAA) approved in May 2011 (box 7). The 12 countries participat- has underpinned the Bank’s dialogue at the regional, subre- ing in SAWAP are rolling out the program through prepa- gional, and country level, and is now laying the groundwork ration of individual projects. for further operational engagement of the Bank in climate- related action. A particular focus is on a “second generation� The Bank is also helping to enhance climate resilience by type of analysis, which addresses more explicitly future cli- integrating flood and drought management and broader mate variability and opportunities for low-carbon growth. climate and watershed management in Kenya and Malawi ($75.5 million), as well as agricultural, irrigation, and range- „„At the request of heads of state of the Niger Basin ripar- land management operations in Burkina Faso, Ethiopia, ian countries, the Bank is completing a major climate Ghana, Kenya, Madagascar, Mozambique, Niger, Nigeria, risk analysis to enhance the resilience of the basin’s $8 Uganda, and Rwanda. billion investment plan for irrigation, hydropower, and other infrastructure. Integrating Climate Change Adaptation and Disaster Risk „„Under the TerrAfrica program, the Bank has helped Management. In eight focus countries (Burkina Faso, develop knowledge products with broad regional appli- Ethiopia, Ghana, Malawi, Mali, Mozambique, Senegal, cability, such as the book Sustainable Land Management and Togo), national plans for Disaster Risk Management in Practice: Guidelines and Best Practices. (DRM) have been agreed with national governments. „„At the country level, the Bank is close to delivering a Implementation of these plans will reinforce countries’ abil- climate change assessment for Nigeria that organizes ity to respond to climate variability and improve their readi- and enhances knowledge and policy insights on low- ness for higher climatic variability in the future. carbon, climate-resilient growth. The results are being used to inform the design of a $500 million operation to The Bank has been supporting post-disaster recovery and support soil erosion and climate change priorities. reconstruction through GFDRR-sponsored assessments in „„Other noteworthy knowledge products include reports Burkina Faso, Central African Republic, Namibia, Senegal. on the economics of adaptation to climate change DRM Country Plans—in initial implementation for (Ethiopia, Ghana, Mozambique); on the economic and Ethiopia, Mali, Mozambique, and Senegal; and in prepara- trade implications of a carbon tax (South Africa); on the tion for Burkina Faso, Ghana, Malawi, Madagascar, and drivers of deforestation (the Congo Basin); on water Togo—also identify strategic investment needs for DRM resources (Zambezi, Uganda, the Nile); on improved and for adaptation to climate-related disasters. charcoal management in Tanzania; on flood risk Box 7. Supporting Climate-resilient Development in the Sahel and West Africa The 2011 GEF Council approved the Sahel and West Africa Multisectoral Program. The program addresses major land deg- radation challenges common across the region. These include economic issues, such as food security and environmental concerns like climate change. The countries in the program include those in the Sahel/Sahara region: Burkina Faso, Chad, Ethiopia, Mali, Mauritania, Niger, Nigeria, Senegal, and Sudan, as well as Benin, Togo, and Ghana, which have important savannah and forest systems linked to the Sahel/Sahara region. The goal is to expand sustainable land and water manage- ment (SLWM) in targeted landscapes and in climate-vulnerable areas in West African and Sahelian countries through expan- sion of investments in sustainable land and water management technologies, as well as improving land-use spatial planning at the watershed scale. It will use a “mosaic approach� linking productive landscapes, rangelands, parks, reserve, and com- munal lands and consider increased productivity, adaptation, and mitigation to climate change. The focus will be on manag- ing trade-offs between multiple uses such as demand for rich floodplains for grazing or crops or woodlands’ value for fuel- wood, and the need for retaining watershed functions and protected areas. 36 D E V E LO PM E N T A N D C L I M AT E C H A N G E mapping in Luanda and Dakar; and on the implications models and financing mechanisms to help the government of climate change on fisheries, gender, youth, communi- achieve its ambitious energy intensity reduction targets. ties, coastal cities, migration, and health (in particular Portfolio highlights include (a) the China Energy Efficiency malaria) in selected African countries. Financing Project, a $300 million IBRD loan on-lent to three Chinese banks for industrial energy efficiency invest- East Asia and the Pacific (EAP) ments, plus a $13.5 million GEF grant to the participating banks for technical assistance and to the government for sup- The region is highly diverse in terms of countries’ climate porting the 12th Five-Year Plan; and (b) the Shandong change exposure and their contribution to GHG emissions. Energy Efficiency Project, a $150 million IBRD loan to sup- Adaptation takes precedence over mitigation in many coun- port energy service companies for energy efficiency invest- tries, particularly in the Pacific Islands, but also in other ments that was approved by the Board in fiscal 2011 (box 9). countries—such as Vietnam and the Philippines—where a large part of the population is located in coastal zones. Renewable Energy. Almost all countries in EAP have adopted ambitious medium- and long-term renewable EAP has a solid and well-diversified climate change portfo- energy targets and put in place policy and regulatory frame- lio with a wide range of products and sectors. Over fiscal works to support implementation. Portfolio highlights are (a) years 2008–11, EAP averaged an approval rate of 12–16 the China Renewable Energy Scale-Up Program (CRESP). climate-change-related projects a year. Initially the assis- Phase I—a $40 million GEF grant and $200 million IBRD tance program was dominated by carbon finance; as this loan—was completed at the end of 2011, and the GEF tapered off in fiscal 2010, lending under IBRD/GEF and approved $30 million for CRESP Phase II. CRESP Phase I GEF picked up. Of the projects approved during this period, has made important contributions to the scale up of renew- carbon finance and IBRD/IDA made up 36 percent each of able energy in China through policy support, RE technology the lending program. Energy leads with 44 percent, fol- improvements, and large-scale investments; (b) the lowed by ENV and ARD at 20 and 18 percent respectively. Indonesia Geothermal Clean Energy Investment Project, The climate change lending portfolio is expected to further supported by $175 million of IBRD and $125 million of grow in the next two years and has about 64 projects in the CTF funds approved by the Board in July 2011; and (c) the pipeline representing a commitment of about $3.961 billion. Indonesia Upper Cisokan Pumped Storage Hydroelectric Of this, about $1.93 billion (49 percent) is dedicated to cli- Power Project, with an IBRD loan of $640 million. mate change. China has the largest portfolio of projects with climate change content under lending and supervision, Low-carbon Cities. Cities are at the center stage of GHG both in terms of numbers and commitment amounts (box 8). reduction in EAP. Given the rapid urbanization in the EAP region, assisting the clients in building low-carbon cities is Supporting Low-carbon Growth an emerging business line. Highlights include the Green Energy Scheme for a Low-carbon City in Shanghai, a $100 Regional Analysis. A regional flagship study—Winds of million IBRD loan and a $5 million GEF grant under Change: East Asia’s Sustainable Energy Future—supported preparation. To help clients set low-carbon targets and iden- high-level policy dialogue on sustainable energy and led to tify cost-effective abatement options, the abatement poten- follow-up policy advice to implement the Renewable Energy tial, cost, and ease of implementation of various mitigation Law in the Philippines and green energy subsidies in options were developed with three alternative abatement Indonesia. A follow-up flagship study—One Goal Two scenarios to deliver an ambitious low-carbon target. This Paths: Increasing Access to Electricity and Clean Cooking Fuels— proposed project plans to adopt a multisectoral approach to was also successfully launched in Jakarta. integrate energy efficiency, clean energy technologies, and sustainable transport to achieve low-carbon objective. The Energy Efficiency. The bulk of EAP’s energy efficiency port- region also undertook a study with the TRACE model to folio is in China. The Bank introduced market-based delivery identify sustainable energy and emission reduction A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 37 Box 8. China, the World Bank Group, and Climate Change China is embarking on an ambitious National Climate Change Action Plan. This includes national and provincial caps on energy and carbon intensity, the piloting of domestic emissions trading systems for carbon dioxide in several provinces and large cities, and possibly absolute caps on coal use and/or carbon emissions in the next few years. In addition, it is increas- ingly serious about both low-carbon (“green�) development at the policy and investment levels, and climate adaptation, pri- marily in the water and agricultural sectors. Finally, China is highly motivated to raise its profile as a pro-active and innova- tive partner to developing countries in achieving carbon mitigation, and is increasingly doing so through demonstration projects and expanded south-south cooperation. The World Bank is a strong partner in China’s climate change efforts. In terms of investments, China has the World Bank’s largest climate change investment program, covering almost every aspect of climate change mitigation in the energy, urban, transport, agriculture, and forestry sectors. Currently, over 79 percent of the future three-year WB lending pipeline (includ- ing GEF) has environmental objectives, and 43 percent of the projects will have positive climate change impacts.* In addition, World Bank carbon finance in China totals nearly $1.3 billion (in addition to loans, since many carbon finance projects are blended with investment projects). This represents two-thirds of the Bank’s Clean Development Mechanism (CDM) commitments worldwide. New programmatic carbon finance investments are being prepared under the Carbon Partnership Facility (CPF) with purchase of credits extending to 2022. For example, the Hebei Regional Farm Biogas Program will improve manure management systems in about 40 livestock farms in 11 prefectures of Hebei Province. The World Bank has developed and will continue to develop new carbon finance methodologies in China for possible future proj- ects, including in the energy (CCS-ready IGCC) and forestry (grassland) sectors. In terms of World Bank implementation of GEF climate change financing, the GEF is a successful “platform of engagement,� with climate initiatives at both the national level (programmatic projects with multiple subprojects) and at subnational levels. The GEF-financed climate change portfolio currently under implementation is worth $320 million. Furthermore, 14 of 18 ongoing GEF projects are fully blended with IBRD loans, which provide additional potential for promoting innovation, policy dialogue, and capacity building. Apart from project finance, the World Bank is highly involved in three new areas of technical assistance. The first, via the “China 2030� AAA, is to model a major rebalancing of the economy toward green growth, including a fiscally neutral intro- duction of carbon taxes generating 5 percent or more of all public revenues. The second, via the Partnership for Market Readiness, is to support the creation of domestic trading platforms, including standards, registration, and MRV protocols. The third is to support the multibillion-dollar “China CDM Fund� in developing its early investments in climate finance in China. Finally, IFC is very involved in energy efficiency, renewable energy, clean technology, and forestry activities in China, all con- tributing to carbon emission reductions. It is also supporting green finance and the Equator Principles in the banking sector, including regulators. MIGA, at the moment, is not active in China domestically, but is seeking to support Chinese enterprises investing in Africa. Note: * As per the China office staff calculations. opportunities in three Southeast Asian cities (Cebu, the Indonesia, Malaysia, Philippines, Thailand, and Vietnam. Philippines; DaNang, Vietnam; and Surabaya, Indonesia). The overall EAP portfolio is well diversified and includes renewable energy, industrial gas, energy efficiency, waste Carbon Finance. EAP has built a strong carbon finance management, and reforestation. portfolio in terms of the number and value of projects. EAP accounts for 65 percent of the Bank’s active carbon finance Over the past two years, EAP has expanded and enriched portfolio, with a total value of approximately $1.5 billion. its portfolio by signing nine Emission Reduction Purchase The largest share belongs to China, while half of the proj- Agreements (ERPAs). New sectors such as energy distribu- ects are broadly distributed across the region, including the tion have been added to the portfolio, and animal waste and 38 D E V E LO PM E N T A N D C L I M AT E C H A N G E Box 9. Leveraging Domestic Banks for Energy Conservation Investments in China The China Energy Efficiency Financing Project (CHEEF, Phase I and II) (a) on-lends IBRD Loans of $300 million to support energy conservation investments in industrial enterprises through three domestic participating banks; and (b) provides a GEF Grant of $13.5 million for technical assistance to support the government’s energy conservation priority programs under the 12th Five-Year Plan and assist the participating banks in developing and sustaining energy conservation lending business lines. CHEEF Phase I has disbursed $106 million, more than half of the allocated IBRD funds, which leveraged $430 million from participating banks and industrial enterprises. The total subprojects are expected to save energy of 1.6 million tons of coal equivalent and reduce CO2 emissions by 4.2 million tons per year. More importantly, the CHEEF project has substantially increased participating banks’ capacity in identifying and appraising EE investments, and their commitment in mainstream- ing EE lending as one of their main business lines. Experience to date with the ongoing CHEEF project offers a few valuable lessons learned: (a) the government’s EE commitments and policies drive demand for EE services and investments; (b) tech- nical assistance and capacity building for participating banks to defray up-front “learning curve� expenses are an essential ingredient to success; and (c) dedicated credit lines through local banks are effective at mainstreaming energy efficiency investments. But they tend to favor large and medium-size enterprises and projects, and changing local banks’ underwriting criteria from balance-sheet financing that heavily relies on sub-borrowers credit ranking to project-based financing that focuses on energy savings has been a major challenge. wastewater treatment projects have been popular due to the a significant contribution to the recovery of the stratospheric high global warming potential of methane emissions. ozone layer. It is expected that the stratospheric ozone layer Significant progress has been made in the CDM process: will return to its 1970s condition by 2050. As global warm- two projects were registered, and seven projects delivered ing potentials of ozone-depleting substances are 1,000 to their first CERs. 10,000 times higher than CO2, phasing out these chemicals has delivered an additional climate benefit equivalent to The largest part of the EAP portfolio is supported by emission reduction of more than 10 GtCO2. carbon funds that deliver Kyoto compliant credits. In the last two years, new instruments such as the FCPF and the Since 2009, the region’s Montreal Protocol Program has CPF gained importance through readiness activities and the engaged in development of HCFC Phase-out Management development of CDM programs. In fiscal 2012, EAP’s Plans in China, Indonesia, the Philippines, Thailand, and carbon finance activities were further enhanced through the Vietnam. HCFCs (hydrochlorofluorocarbons) are another Partnership for Market Readiness and new business devel- set of ozone-depleting substances controlled by the opment for projects in the post-2012 period. Montreal Protocol. HCFCs have a high global warming potential, several hundred times higher than CO2. The Montreal Protocol. The Bank’s East Asia Montreal Protocol Bank has secured grant funds of $85 million to support Program contributed to the successful phaseout of produc- three HCFC phaseout programs in the consumption sector tion and consumption of chlorofluorocarbons, halons, in China, Indonesia, and Vietnam over 2012–16. These carbon tetrachloride, and methyl chloroform—ozone- three programs will permanently phase out more than depleting substances controlled by the Montreal 13,000 MT of HCFCs in the consumption sector, and con- Protocol—by January 2010 in China, Indonesia, Malaysia, tribute to reductions of approximately 12 million tCO2 the Philippines, Thailand, and Vietnam. The combined con- equivalent per year. The World Bank’s East Asia Montreal sumption of these countries was 59 percent of developing Protocol Program expects to deliver additional HCFC country consumption and 57 percent of overall production. phaseout programs in the consumption sector in Thailand More than 200,000 tons of ozone-depleting substances and the Philippines in fiscal 2012. To ensure the sustainable were phased out in the production and consumption sectors phaseout of these chemicals, the Bank is working closely of the Bank’s East Asia Montreal Protocol Program. This is with China to develop an HCFC production phaseout pro- A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 39 gram. This program is expected to cover permanent pro- Poverty and Social Impact Analysis (PSIA). A PSIA was duction phaseout of 75,000 metric tons per year of HCFCs undertaken for a Climate Change Development Policy by 2015. Operation to help the government of Vietnam implement its National Target Program to Respond to Climate CTF Investment Plans have been elaborated for Change. The PSIA helped the government and partners Indonesia, the Philippines, Thailand, and Vietnam. Projects assess the potential impacts of policy reforms on the poor are now proceeding to implementation. and vulnerable. „„The Indonesia Geothermal Investment Project is sched- The PSIA found that the poor are likely to be highly vulner- uled for board approval in fiscal 2012. able to the future effects of climate change, and some nega- „„The Philippines CTF-supported Renewable Energy tive effects are already being felt. Key factors impacting the Program is due for fiscal 2012 delivery, while the Cebu poor are likely to be changes in water regimes that have neg- Bus Rapid Transit Project is due in fiscal 2013. ative implications for agriculture and crop yields; increases in „„China is the Bank’s largest climate change investment the frequency and intensity of storms and floods; sea level program (excluding DPLs). Twenty-seven projects under rise; and associated impacts such as salinity intrusion. supervision have low-carbon (climate mitigation) ben- Incomes, livelihoods, housing, health, water availability, and efits. Of these, 17 are IBRD loans with climate and access of the poor to other assets are likely to be affected by development cobenefits and 10 are GEF grants. climate change in some way. Overall, the DPO actions did not introduce strong negative impacts, but some adjustments Building Climate Resilience of the DPO approaches were made to make them more pro- poor. Positive impacts on the poor are likely for several policy Kiribati GEF Adaptation Phase II. This program has actions, including the expansion of participatory irrigation helped climate-proof national water management policies management and community-based disaster risk manage- and plans, increase the climate resilience of freshwater ment plans. The PSIA process provided an opportunity to supply systems, improve government capacity for risk assess- deepen the consultations on the policy reforms and solicit ment and adaptation planning of coastal public assets, and meaningful feedback from key stakeholders. support consultation and public education on climate change vulnerability and adaptation. Further PSIA research will focus on the institutional mech- anism for financing under the DPO to ensure that the Philippines Country Assistance Strategy. The Philippines mechanism and criteria for the use of funds have a pro-poor CAS for 2010–12 has climate change as one of its five stra- dimension while meeting public investment management tegic objectives. Climate adaptation and disaster risk man- standards and ensuring transparency and accountability. agement have good traction with the government under the This research is financed through the PSIA MDTF; find- soon-to-be approved Cat DDO DPL. The proposed ings will feed into the policy dialogue. Central Philippines Rural Development Project will assist the government in making the agricultural sector more cli- Increasing Access to Finance mate resilient. China is the largest user of the Bank’s carbon finance PPCR in Cambodia and Samoa. A Civil Society Facility has instruments, with a total of 20 projects (4 in the pipeline been established to support engagement and integration of and 16 under supervision) and $1.3 billion in financing. civil society knowledge, experience, and capacity in imple- Sectors covered include energy efficiency, renewable mentation of the PPCR. A report has been prepared to estab- energy, hydropower, coal-bed methane, landfill and live- lish an “agreed position� on the scope and type of support stock waste gas recovery, reforestation, and HFC destruc- required by civil society. The Asian Development Bank has tion. This program covers the CDM and the Carbon established the facility and leads the PPCR in Cambodia. Partnership Facility. 40 D E V E LO PM E N T A N D C L I M AT E C H A N G E PMR Readiness Plans. PMR Readiness Plans for China, Tonga Renewable Energy Development. Tonga renewable Indonesia, and Thailand received funding to help think energy development funded a report under the “Tonga through and plan how they will design, pilot, and eventually Energy Road Map.� Recognizing the vulnerability of implement market-based instruments for greenhouse gas Tonga’s electric sector to the price of oil, the government has mitigation. set a target of 50 percent renewable energy for the grid- based electricity supply in three years. The study identifies Accessing CDM for Bank-Financed Projects. The Laguna de the options available, evaluates their potential role in grid Bay Institutional Strengthening and Community electricity supplies, and determines the best combination of Participation Project supported access to carbon finance renewable energy projects to meet the target. The work was through the Bank-managed Community Development completed early in 2010. Carbon Fund. Climate Change Scale-up in the Mekong Delta. The Bank Forest Carbon Partnership Facility Portfolio. Indonesia is helped advance understanding of climate change issues in leading the readiness process, signing a grant agreement for the Mekong Delta to build considerations into the Mekong $3.6 million in mid-2011. Lao PDR, Vietnam, and Water Resources Development Project. Analytical work was Cambodia are closely following Indonesia’s footsteps. They conducted on climate change issues in the Mekong on agri- submitted good-quality Readiness-Preparation Proposals culture, water, aquaculture, and urban areas. Some work (R-PPs) for consideration to the Participants Committee. was supported by the MCSUF, but a lot was accomplished Lao PDR and Vietnam are expected to sign their prepara- under the EACC country sector studies and the Bank’s sup- tion grant with the World Bank in fiscal 2012, and port for the Vietnam Climate Change Strategy. Cambodia has chosen the UNDP as delivery partner. Other FCPF participant countries from the EAP region are Philippine National Climate Change Action Plan (NCCAP). Vanuatu, Thailand, and Papua New Guinea. Vanuatu The Bank supported consultations led by the Climate signed the grant agreement for the R-PP in May 2010, but Change Commission in NCCAP development, including implementation has been delayed due to the inability to with development partners, government agencies, local gov- appoint a project coordinator. Thailand submitted a formal ernment units, and civil society organizations. request to access the formulation grant in April 2011; it is expected to be signed in fiscal 2012. PNG has not formally Europe and Central Asia (ECA) expressed an interest to engage in the FPCF, but signaled that it might do so soon. The ECA region addresses both adaptation and mitigation. Reduction in greenhouse gas emissions from large emitters Development Policy Loans for Climate Change. Indonesia in ECA can help achieve global targets and energy effi- delivered a DPL in fiscal 2010. A new operation is coming ciency improvements have already proven to be cost-effec- onstream in fiscal 2012 in Vietnam. Both budget-support tive investments. The WBG is helping partner countries operations are being undertaken in partnership with other build their knowledge base on climate science, assess the donors, including JICA, Afd, AusAID, Korea, and CIDA. consequences and adaptation approaches, and strengthen the climate resilience of investments. Supporting Knowledge and Capacity Building Supporting Low-carbon Growth TA for Vietnam Energy Efficiency Program. The Bank sup- ported a number of consultations led by the Climate The Russia Energy Efficiency Financing Project. This proj- Change Commission in the development of the NCCAP, ect (box 10) comprises an IBRD loan of $300–$500 million including consultation with development partners, govern- and a GEF grant of $22.7 million. It applies a financial ment agencies, local government units, and civil society intermediary approach through selected banks, as well as organizations. significant technical assistance to the banks, project owners, A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 41 Box 10. Supporting Russia in Implementing EE Measures and Reducing GHG Emissions According to recent IBRD/IFC estimates, Russia can cut its energy consumption by about 45 percent, or some 300 mtoe. This amount exceeds the annual energy consumption of France. This would translate into a CO2 emissions reduction of about 800 million tons per year. The largest technical EE potential can be found in residential and public buildings (53.4 mtoe and 15.2 mtoe correspondingly), electricity generation (44.4 mtoe), industry (41.5 mtoe), transport (38.8 mtoe), and heat supply systems (31.2 mtoe). However, if Russia’s EE potential and related economic and environmental benefits are to be realized, the country will need to mobilize about $300 billion for EE investments. The Russian authorities have recognized the importance of EE for sustained economic growth. President Medvedev signed a decree in 2008 calling for an action plan to cut the energy intensity of Russia’s economy by 40 percent by 2020. It was followed by a number of actions, including a state program—Energy Savings and Increase in Energy Efficiency through 2020— approved by the government in December 2010. The objective of the program is to reduce the energy intensity of the econ- omy by 13.5 percent by 2020, which would make great strides toward the 2020 goal. Russia’s interest in IFI support for EE has increased over the last two years. The ECA region is about to appraise the Russia Energy Efficiency Financing Project, which will comprise an IBRD loan of $300–$500 million and a GEF grant of $22.7 million. It focuses on a financial intermediary approach through selected banks, as well as through the provision of significant technical assistance to these banks, to project owners, and to service providers. In terms of target sectors, those that possess significant savings potential and appear ready for commercial investments include heavy industry, municipal heating and power networks, and public buildings. and service providers. Sectors with significant mitigation Building Climate Resilience potential that appear ready for commercial investments are heavy industry, municipal heating and power networks, and Tajikistan PPCR. Five of six Phase 1 technical assistance public buildings. projects are under way and slated to be completed by the end of fiscal 2011. The first Phase 2 investment project (cli- Turkey Private Sector Renewable Energy and Energy mate and weather services) was approved by the Bank’s Efficiency Project. This project combines CTF financing Board in late fiscal 2011 (box 11). ($100 million) with IBRD financing ($500 million). With IBRD support, the government is transforming its energy Central Asia Hydrometreology Modernization Project. This sector to increase competition, expand private investment, project supports the Hydromet services in Tajikistan and and promote sustainable use of its renewable energy resources. Kyrgyzstan to build the capacity of local staff and provide funds for new equipment. It links these Hydromet services Rosneft Gas Flaring Reduction Project. This project will with others in the region (International Fund for Saving the eliminate 6.65 million tons of CO2, which is equivalent to Aral Sea, Kazakhstan and Uzbekistan) and with the global Russia’s first Kyoto Protocol commitment period (2009–11). meteorological system. The project treats associated petroleum gas on-site and transmits it through a new 5.5-km pipeline to Gazprom’s ECCU2 Climate Change Action Plan. This plan aims to natural gas pipeline. provide the underpinnings to operationalize the climate change adaptation agenda in Belarus, Moldova, and Energy Eff iciency and Renewable Energy Development Policy Ukraine. The plan has generated considerable knowledge Loan. This loan followed Poland’s enactment of an energy on vulnerabilities and priorities as well as perceptions, efficiency law that introduces a “white certificates� scheme. understanding, and attitudes to climate change. This scheme places an obligation on energy suppliers to achieve specific annual energy savings targets. The suppliers Adapting Vulnerable Energy Infrastructure to Climate work with consumers to help them achieve such reductions. Change. This initiative identifies and prioritizes hazards 42 D E V E LO PM E N T A N D C L I M AT E C H A N G E and vulnerabilities to projected climate scenarios for the government to assess trade-offs across technological period 2030–50. It identified adaptation options with their options, while looking at economic and fiscal ramifica- costs and benefits. tions (box 12). The approach is setting the stage for fol- low-on work in other EU member states and candidate Increasing Capacity to Adapt Water Resources Management, countries. Planning, and Operations to Climate Change in SE Europe. A study is being conducted on the mechanisms to adapt Lights Out? The Outlook for Energy in Eastern Europe and water resource management to climate change in the Sava Central Asia. This initiative outlines significant needs in River Basin. A Water and Climate Adaptation Plan will be building energy security while exploring policies and instru- developed to help distinguish the character of water ments that take advantage of enhancing energy efficiencies, resources in the basin. reducing GHG emissions, and furthering global efforts to address climate change. Supporting Knowledge and Capacity Building Adapting to Climate Change in Europe and Central Asia. Agricultural Vulnerability. The World Bank has teamed up This report summarizes in a non-technical manner what is with Albania, FYR Macedonia, Moldova, and Uzbekistan known about climate change and its likely impacts in ECA, to increase the resilience of agricultural systems to climate and draws conclusions about the associated needs and change. Work includes recommendations to address specific options for adaptation in client countries. vulnerabilities of countries’ agricultural sectors and aware- ness raising initiatives. It is being scaled up to Armenia, The Macedonia Green Growth and Climate Change Analytic Azerbaijan, and Georgia. and Advisory Support Program. This is an umbrella pro- gram of analytic work and nonlending technical assistance. Transition to a Low-emissions Economy in Poland. This It supports the Macedonian government in (a) assessing the effort integrates “bottom-up� engineering analyses with economic costs and benefits of a shift to greener growth, “top-down� economy-wide modeling to allow the taking into account projected climate change; and Box 11. PPCR in Tajikistan Tajikistan was selected as one of the first countries under the Pilot Program for Climate Resilience (PPCR), the flagship mul- tidonor effort on climate adaptation. The program has been recognized for its innovative approach on climate action. The World Bank brought together all three MDBs working in the country, as well as key bilateral agencies to form one cross- sectoral, cross-institutional partnership supported by around $52 million in grants. A consensus for joint multisectoral action was built through continuous dialogue with all stakeholders. A Secretariat is now in place to foster mainstreaming of climate resilience across national development policies and programs. Tajikistan already suffers from droughts and floods, severely constraining development. With high natural sensitivities and weak institutional capacity, it is also the most vulnerable country in the ECA region to future climate change. To be effec- tive, new climate funding required close donor coordination and alignment of donors’ efforts with the government strat- egy. The coordinated approach is starting to have an impact. Technical assistance grants managed by the MDBs are now (a) building awareness of climate resilience across government and stakeholder communities; (b) assessing appropriate measures to enhance resilience in the agriculture, energy, and water sectors; and (c) building the scientific basis for addressing risks from melting glaciers and changing temperature and climate regimes. In the next few years, investments initiated and implemented in fiscal years 2011–13 through MDB support will vastly improve weather and climate services to better manage flood and drought risk, while improving climate science. It is expected to scale up the most effective technologies and policies to enhance sustainable land and water management under new climate threats. The program is expected to bolster resilience of hydropower plants for national and interna- tional energy security. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 43 Box 12. Low-carbon Development in Poland: Supporting Diagnostics and Implementation Poland recognized the need to build up its analytic capacity to examine trade-offs integral to low-carbon development. Could the country commit to ambitious overall greenhouse gas mitigation targets for the longer term—to 2030 and beyond? Questions arose such as what technological options were available, and how expensive were they compared with existing tech- nologies? Would there be high costs in lost growth and employment? Over a shorter horizon, to 2020, what were the implica- tions for Poland of implementing EU policies on climate change? To support Poland’s decision making, the World Bank helped the country develop a suite of economic tools to analyze policy options. The results are captured in the report entitled Transition to a Low-Emissions Economy in Poland, which was published in February 2011. The team integrated “bottom-up� engineering analyses with “top-down� economy-wide modeling to allow the government to assess trade-offs across technological options, while looking at economic and fiscal ramifications. While energy efficiency is the cornerstone of the government’s energy strategy, with only nine more years to go the country is already falling behind on its interim energy savings targets. Similarly, the share of renewable energy is today only about 7.5 per- cent of Poland’s final energy consumption. The government realized that further piecemeal efforts to enhance energy efficiency would not do and that it first needed to put in place the enabling framework, which had been lacking. It also needed to formu- late a coherent and comprehensive plan on how to achieve its renewable energy target. The Energy Efficiency and Renewable Energy Development Policy Loan (Board date of June 2011) followed Poland’s enactment of an Energy Efficiency Law that intro- duces notably a “white certificates� scheme. This scheme will put an obligation on the suppliers of energy to achieve specific annual energy savings targets. In turn, the suppliers will work with consumers to help them achieve such reductions. (b) prioritizing implementation actions identified by the climate resilience; (b) institutional capacity strengthening; National Strategy for Sustainable Development and supple- and (c) investments to strengthen climate resilience. mented by the program’s recommendations. The government of Mexico successfully hosted the Latin America and the Caribbean 16th Conference of the Parties (COP-16) to the Region (LCR) UNFCCC in 2010. The Bank established a strong partnership with the government on strategic aspects The LCR Climate Change Program is characterized by of the COP and supported the organization of several innovation.8 Responding to demand from sophisticated events, such as Water Days and Forest Day. Help was middle-income country clients or the small-island develop- provided to convene representatives of indigenous peo- ing states, the LCR Region is developing new products and ples to enable them to articulate their vision and posi- ways of doing business. This spans citywide approaches to tion on issues of climate change in the run-up to carbon finance, the development of green bonds and mort- COP-16. During the COP, the Bank was represented gages, and support for the Bank’s first water sector DPLs by a high-level delegation led by the Bank President, and for social resilience. Robert Zoellick. One of the highlights of the Bank’s participation at the COP was the signing by All new Country Partnership Strategies tackle climate Presidents Calderon and Zoellick of the Mexico Low change. For example, the Belize CPS, approved by the Carbon Development Policy Loan and the innovative Board in September 2011, has a central theme: to support Mexico Energy Efficiency and Efficient Appliances the government to achieve “inclusive and sustainable natural project—one of the first Bank projects to combine resource-based growth and enhanced climate resilience.� financing from the Clean Technology Fund (CTF), The main results areas are (a) policies and strategies for IBRD, and GEF. 8 The Bank’s first flagship report on climate change—Low Carbon, High Growth: Latin American Responses to Climate Change —was undertaken in LCR in 2009. This was followed by a companion technical volume—Low-Carbon Development in the LCR—in 2010. The Bank’s first paper on decision making under uncertainty (for sea level rise adaptation in Campeche) was also undertaken in LCR. 44 D E V E LO PM E N T A N D C L I M AT E C H A N G E Supporting Low-carbon Growth Box 13. Supporting the Development of the Brazilian Carbon Market Brazil Interaguas. This is a $100 million TA loan on water resources, irrigation, urban water supply, and disaster risk Executed by the Brazilian São Paulo Stock exchange, this $1 million grant (a) built a database of more than 18,000 management that builds on our long-term engagement with potential emissions reduction projects (61 kind of technolo- Brazil. gies/activities, five different sectors), including the identifi- cation of sites and firms that could implement them—such Partnership for Market Readiness (PMR). PMR assists as power utilities, breweries, cement and paper factories, client countries to think through and pilot the develop- steel industries, rural producers, and transport compa- ment of the next generation of climate finance products in nies—corresponding to an abatement potential of up to 4 billion tCO2 in 10 years and an additional generation capac- support of greenhouse gas mitigation. Funded by a multi- ity of around 450 GW; (b) performed a diagnosis of the bar- donor trust fund established by the Bank as a follow-up to riers preventing the development of a Programme of the Cancun climate talks, PMR is being used by Brazil, Activities (PoAs) under the CDM; (c) elaborated proposals Chile, Colombia, Costa Rica, and Mexico to design for improving the legal and regulatory framework for certi- market instruments in key economic sectors with mitiga- fied emission reductions (CERs) and associated transactions tion potential. in Brazil; (d) elaborated a guide for facilitating the participa- tion of municipal governments and other public entities in the CERs market; and (e) studied and proposed options for Low-carbon City Development Program in Rio de Janeiro. the development of an organized forward market for CERs This program is helping to identify and quantify the GHG and a domestic carbon credits market in Brazil. mitigation potential of an umbrella of planned city-level investments across different sectors ahead of the mega events like Rio+20, the Soccer World Cup (2014), and the Summer Olympics (2016). The carbon finance perspective Mexico Efficient Lighting and Appliances Project. This proj- on new investments acts as a catalyst for green, low-carbon ect is a catalyst for the transformation of residential lighting growth for at least part of the estimated $200 billion that and refrigeration subsectors. It supports replacement of 45 Rio will likely receive over the next 5 to 10 years. Other ini- million inefficient incandescent light bulbs and 1.7 million tiatives include support for the development of the Brazilian old and inefficient refrigerators and air conditioners with carbon market (box 13). more efficient models across a range of beneficiaries, mostly lower income groups. Integrated and Sustainable Mass Transit Programs. These programs have advanced methodologies and monitoring A $100m Low-carbon DPL (FY11). This DPL supports a mechanisms to reduce combined GHG and local particulate transition to low-carbon growth, particularly in the forestry, emissions. This has taken place under the urban transport energy, and mining sectors. programs in Mexico (box 14), Brazil, and Argentina. These efforts have seen results in Lima, the fifth largest city in the Brazil N20 Emission Reduction Project. This project helps region, where the Metropolitano Bus Rapid Transit, partially reduce 6 million tCO2e through avoided emissions of N2O, a financed with a Bank loan, is handling 350,000 trips per day. powerful greenhouse gas, which would have been emitted into the atmosphere contributing to the damaging effects of Sustainably Extending Energy Services. The Peru Rural climate change. This is among the first industrial projects Energy Project ($50 million) focuses on poverty reduction explicitly combining brown environment and climate change. and new energy innovation. This operation will not only provide thousands of poor people access to electricity, but Argentina GEF Energy Efficiency Project. The Bank pro- will also promote productive use to improve income genera- vided assistance to the government to design and implement tion and foster the use of new and renewable energy (photo- a national program on efficient and rational use of energy, voltaics) in remote poor areas of Peru. including passing a law to phase out incandescent bulbs by A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 45 Box 14. A Comprehensive Approach to Support Mexico in Reducing Emissions from Urban Transport Mexico has voluntarily established the goal of reducing its GHG emissions by 2030 to 2002 levels and by 2050 to half the 2002 levels. Urban transport accounts for 18 percent of all emissions, and these emissions are growing faster than other sec- tors. Mexico, in collaboration with the World Bank, has launched a comprehensive strategy to reduce the carbon growth path of urban-transport-related emissions. As part of the National Infrastructure Fund, Mexico created the National Mass Transit Support Program to help cities improve their public transport. In addition, Mexico submitted to the Clean Technology Fund a proposal with ambitious goals for urban transport. The CTF awarded $200 million for this effort, which was complemented by $150 million from IBRD to create the Urban Transport Transformation Project. The Urban Transport Transformation Project (UTTP) seeks specifically to reduce the carbon growth path of urban transport by improving public transport with the hope of inducing a significant shift of users from cars to mass transit and of preserving the share of trips done by mass transit. The World Bank has deployed other instruments to help Mexico, including the GEF-financed Sustainable Transport and Air Quality Project and technical assistance. The following chart shows the range of instruments deployed by Mexico and the World Bank to try to curb urban transport emissions. Policies Funding instruments Mexico’s goal: reduce GHG emissions by 2030 to 2002 Transport GHG emissions: levels and by 2050 to half of 18 percent of national total 2002 levels DPL (P 116808): strengthens federal policy for urban transport low-carbon growth path Mexico’s response: place urban transport on a low-carbon growth path States and Private sector municipalities Technical Assistance (MoU P1 Carbon Partnership Facility: 17624): helps prepare and purchases emission UTTP (P 107169): compre- implement projects reductions from municipalities hensive urban transport PROTRAM tends for mass interventions that emphasize transit projects under mass transit, NMT, FONADN’s rule’s low-emission vehicles, immediate action and urban Clean Technology Fund transport poverty window Credit (P 107169): �nances state and municipal public entities and private entities via BANOBRAS credits FONADIN: grants, loans, and GET-STAQ Grant (P1 14012) Investment Loan (P 107169): guarantees to states and prepares Project in four states and municipal public municipalities for infrastruc- cities for projects eligible entities and private entities ture projects with private for UTTP and PROTRAM via BANOBRAS loans sector participation 46 D E V E LO PM E N T A N D C L I M AT E C H A N G E 2011. The project promotes energy efficiency activities in actions at the farm level and improve access to capacity SMEs through a credit line, develops an EE standard and building and knowledge sharing. labeling program and carries out an information and educa- tion campaign. Colombia Weather Derivative. A Disaster Risk Management DPL with Catastrophe Deferred Drawdown Building Climate Resilience Option (Cat DDO) loan provided Colombia with a line of credit in 2010 when it faced one of the worst humanitarian Caribbean Regional Pilot Program for Climate Resilience. emergencies after an unusual rainfall (box 15). The Bank has taken the lead on five of the six pilot proj- ects (Dominica, Grenada, Haiti, St. Lucia, St. Vincent and Carbon Finance the Grenadines). The $47 million Regional Disaster Vulnerability Reduction projects for Grenada and St. The Region supports the REDD agenda through the Forest Vincent and the Grenadines is one of the first truly inte- Carbon Partnership Facility (FCPF). Fifteen of the 37 pilot grated adaptation/disaster vulnerability reduction projects countries are in LAC. The FCPF will help countries par- in the region. It is cofinanced by regional IDA, IDA, and ticipate in negotiations and take advantage of opportunities the PPCR. Several governments have taken Cat DDO to reduce emissions through avoided deforestation in the loans that function as a line of credit to provide countries post-2012 global climate change framework. The Region is with immediate access to financing following a natural working with Mexico and Brazil under the FIP, which is disaster. part of the CIF. A complex financing package in Mexico blends a $300 million forest investment loan with $43 mil- Social Resilience to Climate Change. This $200 million lion in FIP concessional financing. It is linked to the social loan—Mexico: Strengthening Social Resilience to Climate Change—is the first DPL designed primarily to address the impact of climate change on vulnerable groups. It was pre- pared as part of a multisectoral effort involving urban devel- Box 15. Colombia Weather Derivative opment, forestry, environment, disaster risk management, and social development. In 2008, the government of Colombia chose to use a Catastrophe Deferred Drawdown Option (Cat DDO) loan, which functions as a line of credit to provide countries with Subnational Support on Climate Change. The Region has immediate access to financing following a natural disaster. supported Mexico’s subnational agenda related to climate In 2010, when it faced one of the worst humanitarian change; for example, in Michoacan, Campeche, and lately emergencies after an unusual rainfall, the World Bank dis- in Zacatecas. Engagement is built on the Yaqui River Basin, bursed $150 million to support the 2 million affected a targeted hands-on approach to address climate change at people. Cat DDO funds can be disbursed (partially or in full) when the occurrence of a natural disaster leads to the the basin level. declaration of a state of emergency. The government had requested the use of this instrument from the WB as it Natural Resource Management and Climate Change Project. gives the authorities the flexibility to use the funds only if In Uruguay, the sustainability of on-farm investments had needed. The Cat DDO complements Colombia’s existing been highly influenced by extreme climatic events, particu- disaster risk management program. The Bank’s engage- larly droughts. This project was approved in 2010 and con- ment in the area of disaster risk management seeks to coordinate national efforts to respond to emergencies. stitutes the first IBRD lending focused on adaptation. It The $150 million disbursement supported the government supports “climate-smart agriculture� by promoting tech- in addressing immediate needs. The engagement also nologies that can enhance productivity, improve sustainable seeks to improve prevention, reduce vulnerability to natu- development and resilience, and support low-carbon growth. ral disasters, and improve the quality of services delivered The project will create a unique opportunity to enhance by the National Disaster Prevention and Management synergies and cobenefits between adaptation and mitigation System. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 47 resilience DPL focused on forestry and blends financing Middle East and North Africa (MNA) from the French government and from the FCPF. The MNA Strategic Framework for Climate Action for fiscal The Carbon Partnership Facility pipeline includes a program years 2011–13 forms the World Bank response to a growing, in Brazil for the capture of methane from landfills, associated client-driven demand for climate-smart development. It is with a Bank loan to Caixa Economica Federal to strengthen supported by four pillars of action that offer a solid founda- environmental practices in solid waste management. tion for climate action. The first two pillars, “building resil- ience� and “reducing emissions,� provide the broad goals for Supporting Knowledge and Capacity Building the region’s adaptation and mitigation needs. The third and fourth pillars, “leveraging funding� and “generating and shar- Low-carbon Studies. Low-carbon studies are under way in ing knowledge,� frame the Bank’s financial and institutional Colombia and Uruguay and focus on emissions from the capacity to implement opportunities for climate action. agricultural sector. Over the past five fiscal years, the Bank has been financing Regional Agriculture and Climate Change Study. This study (through its IBRD and IDA lending) investment in the developed a user-friendly model to simulate and assess the MNA region of around $3.5 billion to adapt and mitigate impact of climate change on agro-ecological zones and climate change in the water, urban development, agriculture, component land uses linked to other global models. For energy, and transport sectors. Over 60 percent of active example, the model can help a farmer to determine what lending and nearly 80 percent of the lending value in the crops to grow when, where, and with what risks. pipeline support investments with cobenefits for the adapta- tion and mitigation agenda. The active lending portfolio on Green and Efficient Cities—The Energy Dimension. This climate change numbers 55 projects, or roughly 40 percent study was conducted in partnership with the U.S. of all sustainable development projects in the region. MNA Department of Energy. The study will develop a compen- is financing $1.1 billion in adaptation projects and $2.2 bil- dium of existing information that highlights the relevance lion in mitigation projects. A small category of projects are and strengthens knowledge on the energy dimension for related to both adaptation and mitigation. green and resilient cities. Supporting Low-carbon Growth Greening the Wind: Environmental and Social Considerations for Wind Power Development in Latin Concentrated Solar Power (CSP). CSP has the potential to America and Beyond. This study describes the key environ- be a major part of MNA countries’ contribution to global mental and social impacts associated with large-scale, grid- GHG emission reductions. The CTF Investment Plan connected wind power development. It builds on recent aims to mobilize nearly $6 billion (including $750 million World Bank experience with wind power development in from the CTF) to accelerate deployment of CSP projects Latin America and other regions where wind power is in Algeria, Egypt, Jordan, Morocco, and Tunisia (box 16). growing rapidly. The investment plan aims at a private sector demonstration effort by cofinancing 11 commercial-scale power plants As a follow-up to the successful dissemination of the Brazil totaling around 1 gigawatt of generation capacity over a low-carbon study in 2010, four low-carbon sectoral techni- 3-to-5-year timeframe, and two transmission projects that cal reports—on LULUCF, transport, waste management, contribute to Mediterranean grid enhancement and and energy—were published both in Portuguese and exports. English. The MACTool builds on the prototypical version developed under the Brazil and Mexico low-carbon country Wind Energy. The region has begun to make investments in case studies to provide a free, user-friendly, open-code tool wind power. Three projects are under way: the Al-Mokha for marginal abatement cost curve analysis. wind park in Yemen, one in Jordan, and another in Egypt. 48 D E V E LO PM E N T A N D C L I M AT E C H A N G E Box 16. CTF in Morocco A planned 500-megawatt concentrated solar power (CSP) plant at Ouarzazate in Morocco is the first big piece of a greater vision for the expansion of this renewable energy technology across North Africa and the Middle East, a vision engaging Algeria, Egypt, Jordan, Morocco, and Tunisia and multiple global partners with names like Desertec and Medgrid. The Clean Technology Fund has endorsed the Investment Plan for MNA CSP with a commitment of $750 million and the aim of mobilizing nearly $6 billion. Ouarzazate, planned in phases, will be one of the biggest CSP plants in the world but, perhaps more importantly, will begin to build the MNA region into a major global climate change mitigation player with the installa- tion of over 1GW of CSP generation capacity in the next five years, doubling worldwide capacity. By 2020, capacity could reach 5GW, according to a progress report made to the Clean Technology Fund (CTF) Committee in November last year. The CTF is designed to finance transformational actions with global impact. MNA’s unique geography makes it the perfect spot: abundant sunshine, low humidity, and plenty of flat, unused land near road networks and transmission grids. The CSP is easy to integrate into conventional electricity systems and is relatively simple technology. MNA is one of the fastest-growing electricity consumers in the world looking to scale up its supply, diversify away from hydrocarbons, and increase its energy security. Morocco imports 97 percent of its energy needs, currently dominated by coal. Its forward-looking energy policy focuses on two key objectives: improving energy security while addressing climate change mitigation, but also ensuring energy access for all citizens and businesses at the lowest possible cost. There is potential for further expansion in wind power, par- Moving People and Goods. The WBG is assisting Egypt in ticularly in coastal areas. mobilizing carbon finance resources to support the taxi and bus renewal program in Cairo. A similar study is under way Tunisia Sustainable Agricultural Land Management. This in Yemen. The use of alternative fuels—such as CNG and carbon finance project is a pilot—the second in the world— LPG—has been studied in some countries in MNA, particu- designed to reduce emissions from agriculture and increase larly Palestine. The recent Morocco Urban Transport DPL the sequestration of carbon in soils through more sustain- (approved by the Board in 2011) supports implementation of able and lower-emitting agricultural practices. the national urban transport strategy and the restructuring of public bus transport systems in Casablanca and Rabat. Sustainably Used and Reinforced Coastal Zones. The Yemen Climate Resilient Integrated Coastal Zone Management Building Climate Resilience (ICZM) project is financed by the Least Developed Countries Fund (LDCF) under the supervision of the GEF Increase Agricultural Resilience to Climate Change in Secretariat. The objective is to (a) enhance capacity and Morocco. This project, funded by SCCF, aims to integrate awareness on climate-resilient ICZM at national and local climate change into the implementation of the national agri- levels in selected coastal governorates; and (b) demonstrate cultural strategy, the Plan Maroc Vert (PMV). The PMV benefits of implementing climate-resilient ICZM in three aims to create the conditions in which rain-fed farmers can target areas. thrive, but the adverse impacts of climate change threaten to overrun the positive impacts of these investments (box 17). Greening Cities. To fully capture the mitigation potential of cities—which account for around 70 percent of GHG emis- Tunisia Second Natural Resource Management Project. This sions in the region—an innovative citywide approach—the project includes a $10 million GEF grant to integrate cli- Amman Green Growth Program—is being developed with mate change adaptation into a $68 million community- the Greater Municipality of Amman. Its objective is to pro- driven natural resource management and rural development mote low-carbon investments and policies that sustain eco- project. The overall objective is to improve the living condi- nomic growth in the city. tions of rural communities in the project areas by increasing A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 49 biodiversity important to agriculture and associated local Box 17. Increase Agricultural Resilience to traditional knowledge. Climate Change in Morocco In Morocco, a project funded by SCCF (GEF) aims to inte- The Oum Er Rbia Basin (Morocco) Irrigated Agriculture grate climate change into the implementation of the Modernization Project. The objective is for participating national agricultural strategy, the Plan Maroc Vert (PMV). The PMV aims to create the conditions in which rain-fed farmers in the Oum Er Rbia Basin to increase the produc- farmers can thrive, but the adverse impacts of climate tivity and promote more sustainable use of irrigation water change threaten to overrun the positive impacts of these to overcome current and future water deficits. Financing is investments. The SCCF project targets government invest- provided for modernization of off-farm irrigation networks ments directed to smallholders, and finances the incremen- to make pressurized water suitable for on-farm micro irri- tal costs for the implementation of climate change adapta- gation equipment. tions to enhance the agriculture sector’s resilience. The project addresses the knowledge and capacity gap of stakeholders to face the new climate scenario in a flexible Integrated Ecosystem Management in the Jordan Rift Valley. and dynamic way. It will constitute a catalyst for the spread This GEF project, with a component on climate change of climate change adaptation in vulnerable regions of impacts on biodiversity conservation, supports conservation Morocco and in relevant agri-food chains. In addition, the planning and assessment. climate change adaptations will be evaluated in terms of their contributions to increase the soil carbon stock, Improving Food Import Supply Chains in Arab Countries. addressing in an innovative way the potential interactions between adaptation and mitigation actions in agriculture. An objective is to improve food security and reduce the vulnerability of Arab countries to climate-induced food price spikes. The potential benefits of improving food import supply chain efficiency are large and offer a promis- access to basic infrastructure and services, sustainably ing way for Arab countries to minimize the costs of increasing incomes, and improving natural resource man- adaptation. agement practices. Supporting Knowledge and Capacity Building Augmenting Water Supplies. The region faces a scarcity of water. Water therefore plays a central role in core develop- Adaptation to a Changing Climate in the Arab Countries. This ment choices. The Bank is investing in water efficiency and MNA flagship report aims to provide information on climate conservation measures (that is, demand side management) change in the Arab region and technical guidance on adapta- and measures to increase water supply (that is, supply side tion to climate change. It is the first report to address climate management) from unconventional sources such as desalini- change adaptation for all 22 Arab countries, and provides zation and reuse. strategic guidance on short-term adaptation, while taking longer-term climate change projections into account. Pilot Program for Climate Resilience. The Strategic Plan for Climate Resilience for Yemen, currently under preparation, Reducing Vulnerability to Climate Change in Agricultural sets forth a $110 million suite of investments and technical Systems. The study aims to develop agricultural response assistance to help make the transition to a more climate- strategies for three different production systems in three resilient development pathway. countries in the Middle East, by using the best available knowledge and tools to assess the effects of climate change Adaptation to Climate Change Using Agrobiodiversity and bringing these together with inputs from experts, stake- Resources in the Rain-fed Highlands of Yemen. Aimed at holders, and decision makers. farmers who rely on rain-fed agriculture in the Yemen high- lands, this project aims to enhance coping strategies for cli- Support Climate Downscaling in the MNA Region. The mate adaptation through the conservation and utilization of Bank is supporting a regional study on climate change 50 D E V E LO PM E N T A N D C L I M AT E C H A N G E downscaling to enhance the ability of decision makers and of environmental services to ensure that development is ren- resource managers to adopt an improved methodology for dered more resilient. assessing climate change impacts in various sectors. It will provide better quality and usable climate change data at Climate change investment in SAR has had steady growth. detailed spatial and temporal scales, which will eventually In fiscal 2011, 30 percent of the IBRD/IDA projects contribute to integration of climate change resilience into approved had mitigation and/or adaptation cobenefits, with overall development policies and programs. 20 percent of funds categorized as mitigation cobenefits and a quarter as adaptation cobenefits. Countries such as The Cairo Congestion Study is preparing policy recommen- Bhutan and the Maldives, where lending was inactive, did dations and an action plan to reduce traffic congestion and not have any adaptation projects, but all other countries had GHG emissions in the Greater Cairo Metropolitan Area. adaptation projects approved in fiscal 2011. Bangladesh had the highest ratio—three out of seven projects had an adap- Climate-Induced Migration in MNA. This initiative is tation component. undertaking studies in Algeria, Egypt, Morocco, Syria, and Yemen to (a) assess the role of climate shocks on households’ Supporting Low-carbon Growth migration decisions; (b) analyze the role of mobility and remittances in facilitating adaptation to climate shocks; and India’s Application for Clean Technology Fund. India has (c) suggest policy options to enhance the role of migration as become the first country among the BRICs to request fund- an adaptation tool and manage migration through infra- ing from the CTF. The $775 million CTF investment plan structure investments and public services. was endorsed by the CTF Trust Fund Committee in November 2011. India’s Low-carbon Growth Study, which Adapting to Climate Change and Preparing for Natural targeted energy intensive sectors, was used in the plan as Disasters in the Coastal Cities of North Africa. This work one of the key elements. was completed in 2011 for Alexandria, Casablanca, Tunis, and for the urban development area of the Bouregreg Valley Low-carbon Development Study. This study was under- in Morocco. It included in-depth identification of the main taken to develop the analytical capacity to identify low- challenges and supported preparation of adaptation and pre- carbon growth opportunities using a bottom-up approach paredness action plans. It is being extended to Amman and up to the end of the 15th Five-Year Plan (March 2032). It Algiers. facilitates informed decision making by improving the knowledge base and awareness of India’s challenges to Enhancing Jordan’s Capacity for Undertaking Nationally address low-carbon growth. Appropriate Mitigation Actions. This work assists the gov- ernment in defining and prioritizing nationally appropriate Sustainable Energy. The engagement in the energy sector mitigation actions and climate finance instruments while has three components that are consistent with low-carbon demonstrating the possibility to integrate public-private growth: (1) promote cleaner and lower emitting technologies partnerships. such as hydropower (Nepal, India), wind power (India), small-scale hydropower, and solar (Nepal, Bangladesh) and South Asia Region (SAR) cleaner coal (GEF Project in India); (2) promote high- efficiency transmission; and (3) promote the institutional SAR’s climate change activities are guided by five pillars: (1) capacity to address India’s energy and low-carbon growth promoting “no-regrets� approaches, given the uncertainty of challenges. Nepal and the Maldives are also among the pilot impacts; (2) building resilience of the climate-vulnerable countries for the Scaling-up Renewable Energy Program. poor; (3) investing in knowledge to address critical informa- tion gaps; (4) regional cooperation to deal with cross-border Sustainable Transport. SAR is providing investment assis- climate-related challenges; and (5) maintaining the integrity tance in a dedicated freight corridor in India to support a A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 51 modal shift from road to rail transport, and in sustainable (box 18) and the Lahore Composting Project in Pakistan— urban transport, and sustainable transport solutions in Sri demonstrate important development impacts while reducing Lanka (Metro Colombo Project) and various second-tier greenhouse gas emissions. cities in India (Sustainable Urban Transport cofinanced with GEF). Building Climate Resilience GEF Energy Efficiency Program. During the GEF4 period Multi-Donor Trust Funds to Address Climate Resilience and (2006–10), the Bank pioneered two major programmatic Adaptation. The Bank established multi-donor trust funds approaches in India. One of these, the Energy Efficiency in Bangladesh ($125 million) and the Maldives ($8.6 mil- Program, which supports SME energy efficiency projects lion) to assist adaptation efforts and build resilient infra- and chiller projects, is being implemented. The Bureau of structure and livelihoods (box 19). This enables a Energy Efficiency (BEE) is the main counterpart of this coordinated effort of donors to address critical change issues program. BEE has helped establish priorities and integrate in the respective countries, and ensure country ownership in GEF activities more strategically with their domestic energy identifying priorities. efficiency programs. Pilot Program for Climate Resilience. The Strategic Plans Carbon Finance. As of June 2011, SAR had 18 projects in the for Climate Resilience for Bangladesh and Nepal are carbon finance portfolio, covering sectors such as industry, approved, and preparation of projects such as coastal adap- forestry, urban development, and transportation. They are tation, watershed management, and flood information sys- projected to lead to a total reduction of approximately 12 mil- tems are under way. The volume of assistance is a $50 lion tons of greenhouse gases. Some carbon finance proj- ects—such as the FaL-G Bricks and Blocks Project in India Box 19. Multi-donor Trust Funds (MDTF) in South Asia Box 18. Carbon Finance Delivers Many donors are interested in channeling funds to assist Community Benefits adaptation (and mitigation) efforts in the South Asia region. The Bank is administering three such trust funds in the The FaL-G Bricks and Blocks Project in India is a carbon region. The Bangladesh Climate Change Resilience Fund finance project that reduces GHG emissions and has a posi- (Denmark, EU, Sweden, Switzerland, and the United tive development impact. FaL-G stands for fly ash, lime, and Kingdom – $125 million) assists adaptation efforts and gypsum, all of which are either waste or by-products from enables Bangladesh to effectively use international assis- thermal power plants or the chemical industry. Unlike con- tance. Under this trust fund, the following projects are being ventional clay bricks, FaL-G technology enables construc- prepared: Cyclone Shelters, Agricultural Adaptation in tion material production through chemical reaction. Under Climate Risk Prone Areas, Climate-resilient Participatory this CDM project, the CO2 emissions are approximately 70 Afforestation/Reforestation, and Community Climate percent less per production volume than conventional tech- Change. The Maldives Climate Change Trust Fund (EC, nologies. So far, 234,000 tons of carbon credits have been AusAID – $9.5 million) supports both adaptation and mitiga- generated, with a total expected volume of approximately tion, responding to the context of a country facing sea level 450,000 tons of carbon dioxide equivalent (tCO2e). In addi- rise and aiming to become carbon-neutral by 2020. Under tion to such global benefits, FaL-G technology also avoids this trust fund, one project each for adaptation and mitiga- air pollutant emissions and disposes/utilizes industrial waste tion was appraised in September (Wetlands Conservation in an environmentally sustainable manner. and Coral Reef Monitoring for Adaptation to Climate Most importantly, unlike the traditional brickmaking industry, Change, and Clean Energy for Climate Mitigation). The South which stops production during the rainy season, the FaL-G Asia Water Initiative (UK, Australia, Norway – $10 million) technology enables year-round brick production and employ- seeks to improve the management of water within and ment for more than 1,000 workers. Year-round employment between South Asian countries, with an emphasis on pro- for brick workers, which are often among the landless poor in moting transboundary cooperation and enhanced resilience India, allows their children to pursue formal education. to climate change. 52 D E V E LO PM E N T A N D C L I M AT E C H A N G E million grant and $60 million concessional lending for ensure food security is a high priority. The study examined each country. the implications of climate change on food security and identified adaptation measures in the agriculture sector. A Andhra Pradesh Drought Adaptation Initiative (APDAI). menu of adaptation responses identified potential options to APDAI was launched in 2006 to find solutions to the fre- enhance the resilience of Bangladesh’s agriculture sector. quent droughts in the drought-prone districts of the state. This recipient-executed technical assistance project imple- Ganges Strategic Basin Assessment. Completed in 2011, this mented a number of field pilots with small and marginal assessment built knowledge and promoted dialogue on the landholders and landless residents to facilitate the integration risks and opportunities of cooperative management in the of adaptation strategies, and reduce the vulnerability of the basin. The centerpiece of this regional research was the rural economy and population of Andhra Pradesh to climate development of a set of nested hydrological and economic variability and change. A key achievement has been the river basin models that can be used to examine alternative mainstreaming of adaptation strategies into the flagship scenarios across a range of Ganges futures. wage employment program of India, the National Rural Employment Guarantee Scheme, through area-based plan- Climate Change Impact and Agriculture Adaptation ning. Lessons from the technical assistance project are used (Pakistan). This study examines various drivers (including to design an adaptation component in the IDA National both climate risks and socioeconomic changes at the 20–30 Rural Livelihood Project; a GEF grant is planned. year planning horizon) that impact allocations across water- related sectors in the Indus Basin system and result in Integrated Coastal Zone Management (ICZM). This IDA changes in food and water security. A better understanding project ($222 million) invests in integrated management of of trade-offs will help guide prioritization and planning of India’s coastal zone, which is of crucial importance for eco- future investments and ultimately strengthen water and systems and the security of lives and livelihoods of coastal food security. communities. The project involves national-level capacity and knowledge building to address the adaptation needs of Energy Efficiency and Cleaner Technology in Bangladesh communities from coastal hazards. It also includes state- Brick Manufacturing. Brick manufacturing is a major level subprojects to pilot ICZM approaches. A number of source of GHG emissions and air pollutants, especially in these aim to build local resilience in coastal communities. peri-urban areas of Dhaka. This study presented the ben- efits of low-carbon and less polluting brick technologies and Supporting Knowledge and Capacity Building provided concrete recommendations for their adoption in Bangladesh. The study included a cost-benefit analysis of Sundarbans Sustainable Socioeconomic Development. the direct costs and benefits for the entrepreneur, the Spanning India and Bangladesh. the Sundarbans is the impacts of air pollution on health, and the effects of CO2 largest mangrove system in the world and home to 4.4 mil- emissions on climate change. lion inhabitants; about half of these residents live below the poverty line. Historic sea level rise from deltaic subsidence, Vulnerability of Kolkata Metropolitan Area to Increased salinity intrusion, flooding, and nutrient loss in local soils Precipitation in a Changing Climate (India). Using hydro- have made this one of the most hazardous areas in the logical, hydraulic, and urban storm drainage models, this Indian subcontinent. The technical assistance will develop a study identifies the likely impact of climate change on strategy for biodiversity conservation, climate resilience, and increased precipitation and flooding in Kolkata socioeconomic development in the Sundarbans. Metropolitan Area. Through a combination of social, land- use, and flood vulnerability indices, the study identifies the Climate Change Risks and Food Security in Bangladesh. wards that are most vulnerable to climate change. A Bangladesh is a densely populated agriculture-dependent damage assessment estimates the additional damages that country with a high incidence of poverty. Adaptation to are likely to occur because of climate change. The report A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 53 concludes with an adaptation strategy that recommends Regional Monitoring of Water Resources in the Greater basic actions to increase the resilience of Kolkata to flooding Himalayan Region. The catchments of the Himalayas, in general and to the added impact of climate change. including the glaciers, are a significant portion of the water budget in Asia. Baseline information describing glacier mass The Cost of Adapting to Climate Extremes in Bangladesh. balance, the local and general mountain climate(s), and the This study assesses the potential intensification of inland hydrologic regime and resulting water resources volumes and monsoon floods and cyclones in a changing climate. It timing for the Hindu Kush – Himalayan (HKH) mountain sheds light on potential damage from extreme weather region is required before the implications of climate change events and associated adaptation costs. It identifies vulner- on the rivers of South Asia can be assessed realistically. This able populations and infrastructure, quantifies outstanding study presents a first-order synthesis of the quantity and deficits in dealing with current climate-related risks, and quality of the existing monitoring in these areas, with rec- estimates the cost of adaptation to avoid further damage due ommendations for future monitoring investments. to climate change. 54 D E V E LO PM E N T A N D C L I M AT E C H A N G E Annex 4. The Results Framework for climate change is anchored to achievements in four broad areas that are not mutually Results Framework for exclusive: Climate Change 1. Country-led climate actions to increase resilience to the impacts of climate change and variability so that devel- Background opment results are achieved even with a changing climate The Strategic Framework for Development and Climate 2. Country-led climate actions to reduce or capture green- Change adopted a dual-track approach to developing a house gases results framework:9 (a) a set of key actions, deliverables, 3. Mobilization of finance and markets (including private and indicators to monitor WBG progress during fiscal resources) for country-led climate actions on increasing years 2009–11 in six action areas;10 and (b) a longer-term resilience or mitigation, including setting up innovative process of developing, in a consultative manner, an out- financing mechanisms, leveraging private sector come-oriented results framework to accommodate new resources, and taking a catalytic global role in increasing developments in the global climate negotiations and climate financing knowledge. Annex 2 reports on progress made in deliv- 4. Fostering innovation, knowledge, capacity, and partner- ering on the immediate action areas during fiscal years ships in support of actions to increase resilience, mitiga- 2009–11. tion, or climate finance; for example, advancing knowledge on climate and development; developing This annex presents the Results Framework that will be mitigation- and adaptation-related toolkits, guidelines, used to monitor results beyond 2011. The Framework was and products; building capacity and expertise; and work- developed through consultations with the World Bank net- ing with development partners to facilitate global action. work anchors, GFDRR, CIF, and IFC. It builds on exist- ing efforts by sectors to mainstream climate into respective The purpose of the Results Framework is to help monitor strategies. The Framework conforms to recently proposed progress in these four areas over the coming decade. The OPCS guidelines on the development and design of sector Framework includes a three tier-structure that defines the strategies. results chain and specifies a set of indicators that will be used to measure progress and performance on the results for The Results Framework is a “living document� that will each tier (tables 1–3). The source for each indicator, the evolve and improve over time as the World Bank’s ability to units of measurement, and the baseline values are also report on results expands. The current indicators are provided. aligned with the availability of data based on the corporate scorecard, sector strategies, and core sector indicators. The first and highest tier sets the global context for the Going forward, the Bank aims to develop and update the Results Framework organized around the four areas— framework as more or improved outcome indicators become climate resilience, climate mitigation, climate finance, available. For example, metrics for additional indicators (for and knowledge/capacity/innovation/partnerships. It example, energy efficiency) are being developed separately includes indicators that show the status of high-level out- under a parallel sector indicators initiative. comes in each of these action areas. These high-level 9 World Bank. 2008. Development and Climate Change: A Strategic Framework for the World Bank Group. Technical Report. Washington, DC: World Bank. 10 The six action areas of the SFDCC are to (1) support climate actions in country-led development; (2) mobilize additional concessional and innovative finance; (3) facilitate the development of market-based financing mechanisms; (4) leverage private resources; (5) support accelerated development and deployment of new technologies; and (6) step up policy research, knowledge, and capacity building. Source: Development and Climate Change: A Strategic Framework for the World Bank Group, p. 5. A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 55 outcomes cannot be attributed to the World Bank Group; international prices. As a result of revisions in PPP instead, countries and their development partners all exchange rates, poverty rates for individual countries cannot contribute to these achievements through their interven- be compared with poverty rates reported in earlier editions. tions, actions, and policy decisions across multiple sectors. Average, weighted by the total population. (Data Source: They can also be affected by external global shocks such Corporate Scorecard – World Bank staff calculation using as the recent financial crisis. PovcalNet tool. Data are based on primary household survey data obtained from government statistical agencies In the second tier, the focus is on outputs and outcomes and World Bank country departments – June 2011.) supported by WBG operations, which include support to country programs, policies, and knowledge activities, as GDP per capita (constant 2000 $): Gross domestic well as to global public goods. The results in this tier product divided by midyear population. GDP is the reflect the “contribution� of the WBG to the development sum of gross value added by all resident producers in efforts of the country. It includes development results that the economy plus any product taxes and minus any sub- are low-carbon and/or climate-resilient—countries with sidies not included in the value of the products. It is disaster risk reduction programs, irrigation services pro- calculated without making deductions for depreciation vided with improved methods, avoided greenhouse gas of fabricated assets or for depletion and degradation of (GHG) emissions, power generation from renewable natural resources. Data are in constant 2000 U.S. dol- sources, or adoption or scaling up of technologies that lars (Data Source: Corporate Scorecard – World Bank improve resilience or reduce emissions. In addition, it staff estimates based on data from WDI, World Bank includes results on the mobilization of finance and the fos- national accounts data, and OECD national accounts tering of knowledge, innovation, and capacity, which are data files – June 2011). often not limited to country boundaries. Cereal yield (kg per hectare): Measured as kilograms per The third tier focuses on operational effectiveness of WBG hectare of harvested land, includes wheat, rice, maize, barley, programs to achieve low-carbon and climate-resilient devel- oats, rye, millet, sorghum, buckwheat, and mixed grains. opment results. It includes the entire range of investment Production data on cereals relate to crops harvested for dry financing, programs, and strategies that are being adjusted grain only. Cereal crops harvested for hay or harvested to take into account climate change. For lending activities, green for food, feed, or silage and those used for grazing are this includes the quality and implementation performance excluded. Averaged, weighted by land under cereal produc- of the climate-related portfolio, as defined by a new system tion (Data Source: Corporate Scorecard – World Bank staff the World Bank has adopted for tagging projects at Board estimates from WDI; Food and Agriculture Organization, approval as providing climate mitigation or climate adapta- electronic files and website – June 2011). tion cobenefits. For nonlending activities, this includes the integration of climate change considerations into country Percent of countries with DRR programs addressing assistance strategies and sector strategies. Finally, Tier III five HFA priority areas (%): Number of GFDRR priority includes the integration of climate change considerations countries that are successfully implementing/completing into various knowledge products, including analytic and comprehensive national DRR programs that adequately advisory services, guidelines, and tools. address all five HFA priority areas. The HFA priority areas are (a) ensuring DR is a national and local priority with Definitions of Indicators strong institutional bases for implementation; (b) identify- ing, assessing, and monitoring disaster risks and enhancing Tier I early warning; (c) using knowledge, innovation, and educa- tion to build a culture of safety and resilience; (d) reducing Population below $1.25 (PPP) a day (%): Percentage of underlying risk factors; and (e) strengthening disaster pre- the population living on less than $1.25 a day at 2005 paredness for effective response (Source: UNISDR). 56 D E V E LO PM E N T A N D C L I M AT E C H A N G E Results Framework on Climate Change TIER I | CLIMATE IN A DEVELOPMENT CONTEXT Baseline Indicators Value Year Increased climate resilience in country-led development process Population below $1.25 (PPP) a day % of total population 25.4 2005 GDP per capita constant 2000 $ 1,873 2009 Cereal yield kg per hectare 3,021 2009 Countries with DRR programs addressing 5 HFA priority areas %     Access to an improved water source % of population 84.5 2008 Paved roads % of total roads 35.3* 2004–08 Protected terrestrial areas % of total surface area 12.2 2009 Increased climate mitigation in country-led development process CO2 emissions metric tons per capita 3.0 2007 Average annual deforestation % 0.18 2000–10 Access to electricity % of population 75 2009 Electricity production from renewable sources billions kwh 3,839 2009  Increased financing of climate actions in country-led development process International commitments for climate finance billions of $   2010 Increased climate knowledge, capacity, innovation, and partnership in country-led development process Number of countries with National Adaptation Plans # of countries   2010 Number of countries with Nationally Appropriate Mitigation Actions # of countries   2010 Number of countries with Voluntary Partnership Agreements on # of countries 4 2010 forestry sector governance Notes       Data [ ] IDA only { } IBRD only   * Based on data covering less than 50 percent of countries in the group. Access to an improved water source (% of population): WDI, World Health Organization/UNICEF Joint Indicator refers to the percentage of the population with Monitoring Programme, http://www.wssinfo.org/ – June reasonable access to an adequate amount of water from an 2011). improved source, such as a household connection, public standpipe, borehole, protected well or spring, and rainwater Roads, paved (% of total roads): Paved roads are those sur- collection. Unimproved sources include vendors, tanker faced with crushed stone (macadam) and hydrocarbon binder trucks, and unprotected wells and springs. Reasonable or bituminized agents, with concrete, or with cobblestones, as access is defined as the availability of at least 20 liters per a percentage of all the country’s roads, measured in length. person a day from a source within 1 kilometer of the dwell- Median, based on the most recent estimates available within ing. Average, weighted by the total population (Data Source: the last 5-year period (Data Source: Corporate Scorecard – Corporate Scorecard – World Bank staff estimates from World Bank staff estimates based on data from WDI, A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 57 Results Framework on Climate Change TIER II | COUNTRY CLIMATE RESULTS SUPPORTED BY THE WBG Baseline* Indicators Scope Value Year Increased climate resilience in country-led development process from WBG-supported activities Development outcomes incorporating climate resilience People provided with access to improved water sources by WB million  IBRD   operations incorporating climate resilience Beneficiaries covered by social safety net programs supported by million  IBRD   WB operations incorporating climate resilience Countries with DRR programs addressing 5 HFA priority areas with % IBRD   WBG support WBG-supported outputs with increased CC resilience Area provided with improved irrigation and drainage services and hectares IBRD   increased climate resilience Collaborative agriculture research or extension subprojects that # of projects IBRD   incorporate climate resilience Beneficiaries who have adopted improved technologies in agriculture # beneficiaries IBRD   operations that incorporate climate resilience Hydropower projects that address river basin planning and water use % WBG   50 2009  management in planning and design Volume of wood-fuel produced in a sustainable manner cu meters WBG Increased climate mitigation actions in country-led development process from WBG-supported activities CO2 emissions from WBG activities Amount of emission reduction with support from special climate metric tons WBG finance instruments Amount of emissions from energy, transport, and forestry sector metric tons/$ WB investment operations Amount of emissions from IFC investment operations metric tons IFC Population newly gaining access to renewable energy by household number WBG    connection form WBG-supported operations Generation capacity of renewable energy constructed under WBG- MW WBG   supported projects Amount of energy saved through energy efficiency improvement MWh or MJ IDA/IBRD under WBG-supported projects Afforested or reforested ha WBG Protected areas with strengthened management ha WBG (continued on next page) 58 D E V E LO PM E N T A N D C L I M AT E C H A N G E (continued) Results Framework on Climate Change TIER II | COUNTRY CLIMATE RESULTS SUPPORTED BY THE WBG Baseline* Indicators Scope Value Year Increased climate financing mobilized by WBG Commitments mobilized for climate finance $ million WBG   Increased climate knowledge, capacity, innovation, and partnership in WBG-supported activities Countries with WBG-supported low-carbon strategies # of countries WBG   Countries with WBG-supported climate-resilience strategies # of countries WBG   Global/regional agreements with WBG on CC # of agreements WBG   Notes: * Baseline values are not currently available for some indicators. Their availability is appended to the definitions of indicators. International Road Federation, World Road Statistics and staff estimates based on data from WDI. Food and Agriculture electronic files, except where noted – June 2011). Organization, electronic files and website – June 2011). Protected areas (% of total terrestrial area): Terrestrial Access to electricity (% of population): Indicator refers to protected areas are those officially documented by national the percentage of the population with access to electricity, authorities. Average, weighted by land area (Data Source: either grid or off-grid. Data are compiled by IEA from a vari- Corporate Scorecard – World Bank staff estimates from ety of data sources including national and local power utilities, WDI, United Nations Environment Programme, and the household surveys, and so on, and statistical techniques to fill World Conservation Monitoring Centre, as compiled by gaps. Data quality may vary by country. Average, weighted by the World Resources Institute, based on data from the total population (Data Source: IEA database 2009). national authorities, national legislation, and international agreements – June 2011). Electricity production from renewable sources (kWh): Electricity production from renewable sources includes CO2 emissions (metric tons per capita): Carbon dioxide hydropower, geothermal, solar, tides, wind, biomass, and emissions are those stemming from the burning of fossil biofuels (Data Source: IEA Statistics © OECD/IEA, http:// fuels and the manufacture of cement. They include carbon www.iea.org/stats/index.asp; Energy Statistics and Balances dioxide produced during consumption of solid, liquid, and of Non-OECD Countries; Energy Statistics of OECD gas fuels and gas flaring. Average, weighted by the total Countries; and Energy Balances of OECD Countries; also population (Data Source: Corporate Scorecard – Carbon available in World Development Indicators). Dioxide Information Analysis Center, Environmental Sciences Division, Oak Ridge National Laboratory, Tennessee, United International commitments for climate finance (billions States – June 2011). $): Target annual commitment levels agreed at UNFCCC by the parties for financing climate-related actions in devel- Average annual deforestation (% of total surface area): oping countries (Data Source: UNFCC website). Permanent conversion of natural forest area to other uses, including agriculture, ranching, settlements, and infrastruc- Number of countries with National Adaptation ture. Deforested areas do not include areas logged but Programmes of Action (#): Number of countries that have intended for regeneration or areas degraded by fuel-wood prepared or updated their NAPA and submitted to the gathering, acid precipitation, or forest fires. Average, weighted UNFCCC in the past 10 years (Data Source: UNFCCC by forest area (Data Source: Corporate Scorecard – World Bank website). A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 59 Results Framework on Climate Change TIER III | OPERATIONAL AND ORGANIZATIONAL EFFECTIVENESS Baseline Performance Indicators Value Year Standard Increased operational effectiveness of climate actions Lending commitments     climate adaptation WB $ millions     monitored climate mitigation IFC $ millions     monitored climate adaptation WB $ millions     monitored climate mitigation IFC $ millions     monitored Climate-related financial intermediary funds managed WB $ millions     monitored IFC $ millions     monitored Proportion of lending commitments with adaptation cobenefits WB % monitored with adaptation cobenefits IFC % monitored with mitigation cobenefits WB % monitored with mitigation cobenefits IFC %     monitored Proportion of CASs that include climate considerations %     monitored AAA activities with objectives accomplished with adaptation cobenefits WB number     monitored with adaptation cobenefits IFC number     monitored with mitigation cobenefits WB number     monitored with mitigation cobenefits IFC number     monitored Satisfactory operation outcomes at completion Operations with adaptation cobenefits WB %     monitored Operations with adaptation cobenefits IFC %     monitored Operations with mitigation cobenefits WB %     monitored Operations with mitigation cobenefits IFC %     monitored Staff trained on climate actions and programs number     monitored World Bank climate data accessed by global users millions of visits     monitored Notes: Baseline values are not currently available for some indicators. Their availability is appended to the Definitions of Indicators. Performance Standards: Performance standards/targets are provided where available. Indicators are “monitored� where performance standard or target is not relevant. Blanks show that some standards are not developed. Number of countries with Nationally Appropriate Number of countries with Voluntary Partnership Mitigation Actions (#): Number of countries that have Agreements on forestry sector (#): Voluntary Partnership prepared or updated their NAMA and submitted to the Agreements are agreed between wood-producing countries UNFCCC in the past 10 years (Data Source: UNFCCC and the EU or other international bodies. They aim to website). ensure that wood products being exported are legal and that 60 D E V E LO PM E N T A N D C L I M AT E C H A N G E forest governance in the exporting country is improved. A Bank-supported programs that have been identified as pro- signed VPA indicates that the producer country has made a viding climate adaptation cobenefits. (Data Source: World serious commitment to curtail illegal logging, which is one Bank staff estimates based on last 4 years, available FY15) of the drivers of deforestation and forest degradation (Data source: EU database 2010).11 Collaborative agriculture research or extension sub- projects focused on CC&CV (# of projects): Number of Tier II collaborative agriculture research or extension subprojects that have been identified as providing climate adaptation People provided with access to improved water sources by cobenefits. (Data Source: World Bank staff estimates based WB operations that incorporate climate resilience (mil- on last 4 years, available FY15) lions): Number of people who benefited from improved water supply services (following the WHO/UNICEF Joint Clients in a project area who have adopted climate- Monitoring Programme definition) that have been constructed smart technologies promoted by the project (# of clients): under Bank-supported operations and have been identified as Number of clients in the project area who have adopted an providing climate adaptation cobenefits. (Data Source: World improved agricultural technology promoted by the project Bank staff estimates based on last 4 years, available FY15) for project operations that have been identified as providing climate adaptation cobenefits. (Data Source: World Bank Beneficiaries covered by social safety net programs staff estimates based on last 4 years, available FY15) supported by WB that incorporate climate resilience ($ millions): Number of individual beneficiaries from Bank- Proportion of hydropower projects that address river supported social safety net programs that have been identi- basin planning and water use management in planning fied as providing climate adaptation cobenefits. (Data and design (# of projects): Percentage of total portfolio for Source: World Bank staff estimates based on operations which enhancing development benefits to local communi- closed in last 4 years, available FY15) ties programs has been integrated into project planning, design, and implementation as defined in the Hydropower Percent of countries with DRR programs addressing Business Plan: Sustainability Balanced Scorecard (Annex five HFA priority areas (%): Number of GFDRR priority II), December 2008. (Data Source: World Bank Staff esti- countries that are successfully implementing/completing mates based on active projects since 2003) comprehensive national DRR programs that adequately address all five HFA priority areas through WBG Support. Sustainable wood-fuel production produced by WBG- The HFA priority areas are (a) ensuring DR is a national and supported project (cubic meters): Estimated volume of local priority with strong institutional bases for implementa- wood-fuel produced by WBG-supported project in a sus- tion; (b) identifying, assessing, and monitoring disaster risks tainable manner (Data Source: World Bank staff estimates – and enhancing early warning; (c) using knowledge, innova- Forestry team). tion, and education to build culture of safety and resilience; (d) reducing underlying risk factors; and (e) strengthening CO2 emissions reduction through special climate disaster preparedness for effective response. (Source: World finance instruments (metric tons): As per the WBG Bank staff estimated—GFDRR Results Framework) Environment Strategy (Data Source: CIF Admin unit, IFC, World Bank staff estimates available FY15). Area provided with improved irrigation and drainage service and increased climate resilience (hectares, mil- CO2 emissions from investment operations (metric lion): Area provided with improved irrigation services by tons): Description based on WBG Environment Strategy. 11 (http://ec.europa.eu/europeaid/what/development-policies/intervention-areas/environment/forestry_intro_en.htm) and European Forest Institute – FLEGT Facility (http://www.euflegt.efi.int/portal/home/vpa_countries/). A S T R AT EG I C FR A M E WO R K F O R T H E WO R L D BA N K G R O U P: T EC H N I C A L R E P O R T 61 (Data Source: IFC, World Bank staff estimates available strategies with WBG support during the past five years FY15) (Data Source: WBG staff estimates). Number of people provided with access to electricity Countries with WBG-supported climate-resilience (through renewable energy) (total # of people): This strategies (# of countries): Number of countries that have indicator calculates the number of people that have developed or updated their climate resilience or adaptation received electricity access under the project by household strategies with WBG support during the past five years connection. It is expected that the baseline value for this (Data Source: WBG staff estimates). indicator will be zero (Data Source: Energy Core Sector Indicator). Global/regional agreements with WBG on CC (# of agreements): Number of global or regional agreements Generation capacity of renewable energy constructed between the World Bank Group and other institutions on or rehabilitated under the project (megawatts): climate-related activities (Data Source: World Bank staff Megawatts of generation capacity of renewable energy con- estimates). structed under Bank-supported programs (Data Source: Core Sector Indicator energy; World Bank staff estimates Tier III based on operations closed between FY01–FY10, last 3 years aggregate – June 2011). Lending commitments for climate adaptation ($ mil- lion): Dollar value of the sum approved by the Board to Amount of energy saved through energy efficiency be extended to the client in loan, credit, or grant terms improvements under WBG-supported projects (MWh from IBRD/IDA sources tagged as providing climate or MJ): This indicator calculates the amount of electricity adaptation cobenefits (Data Source: World Bank data (MWh) or fuel (MJ) saved through energy conservation system). measures (Data source: Energy Core Sector Indicator). Lending commitments for climate mitigation (IBRD/ Afforested or reforested area (hectares, million): Area IDA, $ million): Dollar value of the sum approved by the afforested or reforested by Bank-supported programs that Board to be extended to the client in loan, credit, or grant have been identified as providing climate adaptation coben- terms from IBRD/IDA sources tagged as providing climate efits (Data Source: World Bank staff estimates – Forestry mitigation cobenefits (Data Source: World Bank data team). system). Protected area with strengthened management (hect- Climate-related financial intermediary funds managed ares, million): Protected areas that have strengthened man- (volume, $ million): Climate-related financial instruments agements through Bank-supported programs (Data Source: designed to support engagements with development partner- World Bank staff estimates – Forestry team). ships and/or programs for which the Bank, as trustee, administrator, or treasury manager: (a) provides an agreed Financing commitments mobilized by WBG for cli- set of financial and administrative services, and (b) has no mate finance action in developing countries ($ million): responsibility for supervision of funded activities (Data Financing commitments mobilized by WBG for financing Source: World Bank and IFC data system). climate actions in developing countries during the past five years (Data Source: World Bank staff estimates). Proportion of WB lending commitments that provide climate adaptation cobenefits (% of commitments): Countries with WBG-supported low-carbon develop- Dollar value of the sum approved by the Board to be ment strategies (# of countries): Number of countries that extended to the client in loan, credit, or grant terms from have developed or updated their low-carbon development IBRD/IDA sources tagged as providing climate adaptation 62 D E V E LO PM E N T A N D C L I M AT E C H A N G E cobenefits as a share of total sum approved by the Board Satisfactory operations outcomes at completion— (Data Source: World Bank data system). operations with adaptation cobenefits (%): Percentage of projects that provide climate adaptation or climate mitiga- Proportion of WB lending commitments that provide tion cobenefits that upon exit are rated marginally satisfac- climate mitigation cobenefits (% of commitments): tory, satisfactory, or highly satisfactory on achievement of Dollar value of the sum approved by the Board to be outcomes by IEG (Data Source: World Bank staff estimates, extended to the client in loan, credit, or grant terms from annual reviews). IBRD/IDA sources tagged as providing climate mitigation cobenefits as a share of total sum approved by the Board Satisfactory operations outcomes at completion— (Data Source: World Bank Data System). operations with mitigation cobenefits (%): Percentage of projects that provide climate adaptation or climate mitiga- Proportion of CASs that includes climate consider- tion cobenefits that upon exit are rated marginally satisfac- ations (%): Percentage of country assistance strategies, tory, satisfactory, or highly satisfactory on achievement of country partnership strategies, or country interim strategies outcomes by IEG (Data Source: World Bank staff estimates, that analyze climate change impacts and vulnerabilities, or annual reviews). Nationally Appropriate Mitigation Actions and propose subsequent actions in at least one sector or provides explana- Staff trained on climate actions and programs (# of tions as to why actions are not needed (Data Source: World trained staff): Number of staff trained on climate informa- Bank staff estimates). tion and programs as recorded in LMS system (Data Source: World Bank data system). Analytic and advisory activities with climate coben- efits objectives accomplished (% of activity completion World Bank climate data accessed by global users (mil- summaries rating objectives fully or partially accomplished): lions of visits): Number of unique visitors to the climate data Applies to AAA activities coded as having climate coben- websites managed by the WB, including climate change efits only (Data Source: World Bank data system). data portal, climate finance platform (Data Source: World Bank data system). 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