World Bank

Before commenting on the fund within the World Bank, it is worth pointing out that as the major funder with the regional development banks, it provides financial and technical assistance to developing countries for development programmes (e.g. bridges, roads, schools, etc.) with the stated goal of reducing poverty. It does this under the Poverty Reduction Strategies and the Comprehensive Development Frameworks. Governments seeking funding grants, loans and guarantees do not have any forecasting for the impacts of the project in contributions to greenhouse gases. In addition, its funds are not yet dependent upon showing that development programmes are linked to climate reduction strategies.

Currently, projects funded by one part of the World Bank or government agency could undermine the activities of other parts of the Bank or development agency in their attempt to get the production of greenhouse gases under control. Clearly, some joined-up thinking is needed here. The World Bank Framework on Climate Change does nothing to address this.

The battle between the World Bank and the GEF for control of most of the climate funds in the future needs real debate, as does where future funding for climate change will fit in the much broader international environmental governance landscape.

Finally, the funds so far available from bilateral means (e.g. Japan Cool Earth Partnership, the Environmental Transformation Fund - International Window (ETF-IW), the North American Aerospace Defense Command (NORAD) Rainforest Fund, the European Commission's Global Climate Change Alliance (GCCA), the Spanish MDG Fund and the German International Climate Initiative) are of a magnitude of around five times that available from the multilateral agencies, although some of the money at present channelled through the bilateral funds may be committed to multilateral funds in the future.

World Bank Climate Investment Fund (CIF) The World Bank and other members of the multilateral development banks (MDBs) have developed the Climate Investment Fund (CIF) as an interim measure. This is to help scale up assistance to developing countries and thus strengthen the knowledge base in the development community on climate change adaptation and mitigation. In 2008 the donors approved US$6.1 billion, although it is unclear where this is going to come from as of yet. The CIF is broken down into two separate funds: the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF).

The CTF has a focus on financing transformation actions by offering incentives for low-carbon development and mitigation of GHGs, scaling up and sharing clean technologies, and looking for environmental and social co-benefits contributing to sustainable development and the delivery of the MDGs.

The Strategic Climate Fund is also focused on scaling up but looks at new approaches. It focuses on areas such as sustainable forest management, greening energy access and climate resilience schemes.

This represents a new source of funding that will enable the MDBs to provide additional grants and concessional financing. One interesting development is the governance model for the funds. Under the Climate Investment Fund, the decision-making committees for both the CTF and the SCF have equal members from both the donors and recipients. The role of stakeholders in advising and participation is still to be agreed.

Carbon Partnership Facility (CPF) This is more focused on fostering strategic interventions in sectors, as opposed to individual projects. It aims to link through partnership buyers and sellers, and targets long-term emissions, including in uncertain markets. It hopes to have a carbon fund of around 5 billion Euros over five years. In addition, a carbon asset development fund will be established to help provide sellers and host countries with grants or resources to enable programme development and methodological emission reduction work to be undertaken.

Forest Carbon Partnership Facility (FCPF) This facility will have a capital fund of initially around US$300 million and it will focus its work on two mechanisms:

1 readiness (i.e capacity-building in up to 20 countries, focusing on developing a reference scenario and a REDD strategy, as well as creating an effective monitoring system with around US$100 to disburse);

2 carbon finance, which will work on demonstrational project transactions in around five countries with US$200 million to disburse.

The governance process is through a participants' committee and a broader participants' assembly.

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