By Sophie Mbugua
As nations of the world gathered on Monday in Paris to reach a new and universal climate change agreement, Germany, Norway, Sweden, and Switzerland has announced a new $500 million initiative that will find new ways to create incentives aimed at large scale cuts in greenhouse gas emissions in developing countries to combat climate change.
The initiative developed through the World Bank Group will measure and pay for emission cuts in large scale programs in renewable energy, transport, energy efficiency, solid waste management, and low carbon cities.
“We want to help developing countries find a credible pathway toward low carbon development,” said World Bank Group President Jim Yong Kim.
Dubbed the Transformative Carbon Asset Facility, the initiative will help developing countries implement their plans to cut emissions by working with them to create new classes of carbon assets associated with reduced greenhouse gas emission reductions, including those achieved through policy actions.
Speaking during the initiative launch at the global climate talk on the 21st Conference of Parties (COP21) in Paris, President Jim Yong Kim noted “This initiative will help countries create and pay for the next generation of carbon credits.”
The initiative is planned to start operations in 2016 until 2028 with an initial expected commitment of more than $250 million from contributing countries. With $2 billion support of investment and policy-related lending from the World Bank, the facility will remain open for additional contributions until a target of $500 million is reached.
The facility will help countries implement programs and policies that will assist them in achieving their mitigation goals. Through the concept of net mitigation, the facility will only purchase a portion of the emission reductions generated by the programs with individual countries deciding if to use the remaining carbon portions to meet the targets outlined in their respective INDCs.
This follows the World Bank Group unveiling its new financing plan that calls for $16 billion in funding to help African people and countries adapt to climate change and build up the continent’s resilience to climate shocks.
“Sub-Saharan Africa is highly vulnerable to climate shocks, with research showing this could have far-ranging impact from child stunting and malaria to food price increases and droughts” noted President Jim Yong Kim.
The financial plan, Accelerating Climate-Resilient and Low-Carbon Development, the Africa Climate Business Plan lays out measures to boost the resilience of the continent’s assets its people, land, water, and cities as well as other moves including boosting renewable energy and strengthening early warning systems.
Per current estimates, the plan says that the region requires $5-10 billion per year to adapt to global warming of 2°C.
The World Bank and the United Nations Environment Programme estimates that the cost of managing climate resilience will continue to rise to $20-50 billion by mid-century, and closer to $100 billion in the event of a 4°C warming.
Of the $16.1 billion that the ambitious plan proposes for fast-tracking climate adaptation, some $5.7 billion is expected from the International Development Association (IDA), the arm of the World Bank Group that supports the poorest countries.
About $2.2 billion is expected from various climate finance instruments, $2.0 billion from others in the development community, $3.5 billion from the private sector, and $0.7 billion from domestic sources, with an additional $2.0 billion needed to deliver on the plan.
150 World leaders meeting in Paris for the 21st Conference of Parties of the United Nations Framework Convention on Climate Change have launched an ambitious attempt to hold back the earth's rising temperatures, and are expected to come up with a legal abiding agreement in two weeks of bargaining.