INTERVIEW-World Bank seeks $5 bln for clean energy fund
19 Mar 2008 20:00:01 GMT Source: Reuters
By Lesley Wroughton WASHINGTON, March 19 (Reuters) - Donor commitments to finance a World Bank clean technology fund for developing countries have not yet reached the $5 billion target, the bank's top environment official says. Talks with donors are determining their interest in contributing to the fund and with developing countries on its design, Kathy Sierra, World Bank vice president for sustainable development, told Reuters. She said the fund would accelerate and scale up low carbon and climate-resilient investments in the developing world. "Our target would be $5 billion, but we are not quite there yet in terms of either commitments or some private discussions we've had," Sierra said in a recent interview. "We think it is a reasonable number but as we're going around consulting, anything from $5 billion to $10 billion would be the type of number that would be sufficient to make a big difference," she added. So far, the fund has commitments of $2 billion in climate funds from U.S. President George W Bush, part of 800 million pounds ($1.6 billion) Britain pledged for "environmental transformation" and undisclosed promises from Japan. "Hopefully over the next couple of months this will lead to an agreement and we will be able to launch that fund," Sierra added. SWITCHING TO CLEAN ENERGY She said the World Bank would try and help countries switch to cleaner energy through so-called "transformational projects," citing Mexico as an example of a country looking to transform its transportation system to cut emissions. Sierra said the clean technologies fund would provide the World Bank with the opportunity to bulk up investments in clean energy, also by bringing in the private sector. "Instead of doing plant by plant, or company by company, we're hoping this instrument will allow us to aggressively open the markets and change the dynamic and, perhaps that would work better than just doing project by project," she said. Sierra said many countries were coming up with their own projects to increase energy savings, as prices of oil and other commodities skyrocket. "Rapidly industrializing countries are moving to smartly decouple their energy growth from growth itself. Of course, they want to do this based on their own growth strategies and own needs for growth and job creation, and not because someone is telling them what to do," she added. Most carbon dioxide heating the planet is now a result of Western industrialization, and developing countries want help to cut their own growing emissions.A UN report last year said cost of returning greenhouse gas emissions to present levels by 2030 would be about $200 billion annually, through measures such as investing in energy efficiency and low-carbon renewable energy. PRACTICAL SOLUTIONS As countries shape a new global agreement to succeed the Kyoto Protocol, which expires in 2010, to reduce greenhouse gas emissions, Sierra said the World Bank was seeking "practical solutions" to tackle climate change and environmental issues. In that vein, the bank is developing a new carbon fund that would pay developing countries for protecting and replanting tropical forests. The bank's Forest Carbon Partnership Facility would provide financial incentives to developing countries to reduce greenhouse gas emissions from deforestation. Deforestation contributes 20 percent of total greenhouse gas emissions, more than all of the world's cars, trucks, trains and airplanes combined. Environmental groups say protecting tropical forests is the most direct and fastest way to mitigate some of the impact of climate change. Sierra said investment was needed to put in place a sustainable forestry program in countries to avoid deforestation and benefit from the carbon facility. The facility will require countries to determine the present state of their forests and measure future deforestation, while also establishing carbon content in forests where not all trees are equal carbon storehouses. As the World Bank seeks funds for the carbon facility, Sierra said initial discussions with donors have focused on "who is doing what" and the funding gap. "This is work that is in progress and hopefully with technical assistance and some way of financing the investment, through ourselves or marshaling bilateral support, we will have a much stronger program at the country level," she added. (Editing by Chizu Nomiyama)
