Carbon Finance for sustainable development 2015 ANNUAL REPORT 1 l CARBON FINANCE 2015 ANNUAL REPORT OUR MANDATE Carbon finance is providing solutions and integrating Deploy innovative financial solutions and technical expertise to climate action into development work deliver results-based climate finance for low carbon growth in World Bank Group client countries. Support design of domestic climate policy and build capacity for clients to price carbon through either market-based mechanisms like emissions trading schemes or taxes. The report covers the carbon-related funds, facilities, and financial products managed by the World Bank Group between January 1, 2015 and December 31, 2015. An online version of this report is available at: www.worldbank.org/climatefinance Note: All dollar amounts are in U.S. dollars ($) unless otherwise indicated. The euro/U.S. dollar exchange rate used in this report is 1.20, the pound sterling/U.S. dollar exchange rate used in this report is 1.55, and the NOK/U.S. dollar exchange rate used in this report is 0.13. These exchange rates were used by the carbon funds and facilities in reporting to their participants in 2015. All greenhouse gas emission reductions are reported in metric tons of carbon dioxide equivalent (tCO2e). This report is provided for informational purposes only. The carbon funds, facilities, and financial products reported on are not legal partnerships. No warranties or representations are made as to the accuracy, reliability, and completeness of any information herein. 2 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 3 TABLE OF CONTENTS ACRONYMS Building on the Paris Climate Agreement................................................... 7 Carbon Pricing Spreading Globally....................................................... 8 BioCF BioCarbon Fund MRV Monitoring, Reporting, and Verification Forests Slow Climate Change and Increase Resilience.....................10 CDM Clean Development Mechanism MWP Methodology Work Program CER Certified Emission Reduction NCM Networked Carbon Markets Innovation and Carbon Finance...............................................................13 Ci-Dev Carbon Initiative for Development NGO Nongovernmental organization Evolution of Carbon Pricing at the World Bank Group........................14 COP Conference of the Parties PA Partnership Assembly (PMR) Supporting China’s Climate Action.......................................................15 CO2 Carbon Dioxide PAF Pilot Auction Facility for Methane and Results-Based Finance Is Testing New Ways to Reduce Emissions..16 CPF Carbon Partnership Facility Climate Change Mitigation Financing for Forestry and Landscapes..............................................18 ER Emission Reduction PC Participants Committee (FCPF) Gender and REDD+............................................................................. 19 ERPA Emission Reduction Purchase Agreement PMR Partnership for Market Readiness ETS Emissions Trading System POA Programme of Activities Implementing Climate Action.................................................................. 21 EU European Union RBF Results-Based Finance Kyoto Funds and Facilities................................................................... 22 FCPF Forest Carbon Partnership Facility REDD Reducing Emissions from Deforestation GHG Greenhouse Gas and Forest Degradation Next Generation Carbon Market Initiatives....................................... 24 INDC Intended Nationally Determined REDD+ REDD plus Conservation, Sustainable Partners Around the World.................................................................. 26 Contribution Management of Forests, and 2015 Highlights..................................................................................... 28 IP Indigenous Peoples Enhancement of Forest Carbon Stocks Achievements and Impacts................................................................. 32 ISFL Initiative for Sustainable Forest RGGI Regional Greenhouse Gas Initiative The Year at a Glance.......................................................................... 32 Landscapes (BioCF) tCO2e Metric tons of Carbon Dioxide Lighting Rural Bangladesh with Rooftop Solar................................... 35 JI Joint Implementation Equivalent LDC Least Developed Country TCAF Transformative Carbon Asset Facility Micro-Hydros Earn First Carbon Revenues in Nepal.......................... 37 MRP Market Readiness Proposal (PMR) WBG World Bank Group Climate-Smart Farming in Kenya........................................................ 39 Carbon Credits Heat Moldova in Bitterly Cold Winters....................... 41 Who We Are............................................................................................... 42 4 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 5 BUILDING ON THE PARIS CLIMATE AGREEMENT John Roome Senior Director, Climate Change World Bank Group L ast year was historic in many ways, ending We have been supporting carbon market Continuing our support for scaled up mitigation, on a high note in Paris with nations around development and building capacity for carbon we announced the new Transformative Carbon “The world needs to find effective the world agreeing to limit the global pricing instruments for 15 years. This has Asset Facility on the first day of COP21 in temperature rise this century to well below involved implementing about 150 mitigation Paris. The facility will help create and monetize ways to reduce carbon pollution. 2° Celsius. projects on the ground and piloting new the next generation of carbon credits, including We must design the best ways to By the time the COP21 concluded, 187 approaches to deliver innovative market- and those achieved through policy actions. This will results-based carbon instruments. We will be important in the context of carbon assets price carbon in order to help cut countries had submitted their proposals on continue our work of balancing implementation created under a new regime, for which TCAF climate action in their Intended Nationally pollution, improve people’s health, Determined Contributions (INDCs). and innovation through our growing list of next generation carbon market initiatives. can act as a catalyst. and provide governments with a Implementation of these INDCs is the foundation for the success of the Paris We have the Partnership for Market Ultimately, it will be the private sector that makes the massive investments needed for pool of funds to drive investment Agreement. We were happily surprised to Readiness, which helps countries establish a sustainable future. To promote these green see the extent to which language enabling market-based carbon pricing mechanisms. investments, we are working to put in place a in a cleaner future and to protect the establishment of a new carbon market For example, the PMR is supporting the robust and predictable price on carbon, make poor people.” was ultimately included in the agreement. It implementation of carbon taxes in Chile and climate opportunities more investor-friendly, essentially acknowledges that markets can help South Africa, and the development of national and leverage private capital. For example, last countries get on a low-emission development cap-and-trade systems in China and Kazakhstan. July, the new Pilot Auction Facility held its first Dr. Jim Yong Kim pathway and also enhance collective ambition. We are helping many other countries prepare auction to support methane projects with the President and implement innovative instruments to scale participation of 28 private sector bidders from We were also excited to see that countries up climate change mitigation domestically, and around the world. And in Paris, the Carbon World Bank Group signed off on wording in the final agreement share lessons learned. Pricing Leadership Coalition was officially that explicitly recognizes the role that land use— launched, bringing together governments, forests in particular—has in addressing climate Key to implementing the country climate plans businesses, and NGOs who all agree and change. After decades of work, the technical and keeping global warming under 2° Celsius advocate that carbon pollution should be priced and scientific rules to build forest protection is to dramatically scale up climate action. The fairly, effectively, and efficiently. plans, the significance of REDD+, and the Carbon Partnership Facility is one initiative vital contributions that forests and landscapes that focuses on scaled up mitigation programs Looking ahead, the Networked Carbon can make have all been recognized on the to catalyze investment for low-carbon growth. Markets Initiative is working to create the international stage. Also, the Carbon Initiative for Development institutions and services to link the different is piloting new projects that focus on energy climate actions that countries are now And while we cannot expect that carbon access in previously underserved communities, designing and implementing. By making markets will be rebuilt in the near future, the such as poor countries in Africa, with the goal to voluntary cooperation workable—through the Paris Agreement paves the way for a renewed test what works and could also be successfully establishment of a basis to compare different international carbon market that will look and be done elsewhere. Both are examples of Results- climate actions—assets could be transferred different. Some of the parameters and “rules Based Finance, meant to comply with the from one jurisdiction or country to another. of the game” may change for carbon markets, provisions on market mechanisms in the Paris but we at the World Bank Group are well- Lessons learned from all these initiatives will Agreement. positioned—with decades of experience and ensure effective implementation of mitigation a solid set of procedures and infrastructure in We are also mobilizing climate finance for actions and contribute to new, innovative place—to inform the next steps: forests and landscapes on a larger scale. The approaches to deliver climate finance. While we Forest Carbon Partnership Facility and the cannot underestimate the challenges involved, • Countries will continue to design, BioCarbon Fund Initiative for Sustainable we have a hub of knowledge and pilots to test test, and implement market-based Forest Landscapes—with combined financial approaches that document country process and domestic carbon pricing initiatives. contributions of more than $1.4 billion— progress, and pioneer solutions that we hope Each country will find a solution that fits collaborate with over 50 forest countries to will help deliver on the Paris Agreement. its circumstances—whether it is cap and reduce emissions from deforestation and trade, a carbon tax, or something else. We are proud to share our highlights and forest degradation. Through these efforts, the milestones in this annual report, and we • Countries will need to create the release of millions of tons of emissions into invite you to explore this work further online infrastructure necessary to compare and the atmosphere can be avoided and, just as and through social media, and engage in connect a wide range of climate actions. important, the investments made and capacity conversation with us in 2016 and beyond. And they will have to get ready to trade built will improve livelihoods, reduce poverty, carbon assets and emission reductions and ensure the long-term sustainability of these under the rules of the new agreement countries’ economies. and other bilateral, regional, or club-like frameworks. 6 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 7 Regional, national, and subnational carbon pricing instruments already implemented or scheduled for implementation: share of global GHG emissions covered 14% 14% 38 37 38 37 12%12% 36 36 35 35 CARBON PRICING SPREADING GLOBALLY 10%10% 31 31 8% 8% 23 23 Global Emissions Covered by a Carbon Price 12% 6% 6% “Putting a price on carbon is 18 20 15 18 Share of global GHG emissions 20 Share of global GHG emissions 14 15 now widely 4% 4% 9 9 10 14 10 acknowledged as a priority. Helping countries get it 7 BILLION 2% Number of Number of implemented instruments tons of CO2 covered 2% implemented instruments right will be key, by carbon price and market-based 2 4 5 6 7 8 0% 2 4 5 6 7 8 approaches can 0% help with that.” 1991 2001 2011 1998 7 007 2017 199594 1996 95 004 005 2014 2015 1992 2002 2012 1993 003 2013 1999 009 1998 008 1996 006 2016 9190 2000 2010 199 2001 1 1997 27 2017 19 19 1994 25 24 5 4 2002 2 2 1993 23 3 9 1999 29 28 26 6 1990 2000 0 201 200 200 200 201 201 191 199 201 200 201 200 200 200 201 201 Vikram Widge Head Finland carbon tax (1990 ) Switzerland carbon tax (2008 ) Shenzhen Pilot ETS (2013) Carbon and Climate Finance Finland carbon Poland tax carbon tax(1990  (1990 ) ) Switzerland RGGI (2009 carbon ) tax (2008 ) Shenzhen Shanghai Pilot Pilot ETS ETS (2013 (2013 ) ) World Bank Group Poland carbon tax (1990 ) RGGI (2009 ) Shanghai Pilot ETS (2013  Sweden carbon tax (1991)  Ireland carbon tax (2010) Beijing Pilot ETS (2013 ) ) Sweden carbon Norway tax carbon (1991 tax  (1991 ) ) Ireland carbon Iceland tax carbon (2010 tax  (2010 ))  BeijingPilot Tianjin PilotETS ETS (2013 (2013  ))  Norway carbon Denmark tax (1991 carbon ) ) tax (1992 Tokyo carbon Iceland tax CaT (2010 (2010 ) ) Tianjin Pilot Pilot Guangdong ETS ETS (2013 ) ) (2013 Denmark tax(1995 carbon tax Latvia carbon (1992)) Tokyo CaT Saitama (2010 ETS )) (2011 Guangdong Hubei Pilot Pilot ETS ETS (2014 (2013 ) ) Latvia carbon Slovenia tax (1995 carbon ) ) tax (1996 Saitama ETS Kyoto ETS (2011 (2011  ) )  Hubei PilotPilot Chongqing (2014 ETS ETS ) ) (2014 Estonia Slovenia carbon carbon tax tax (2000 (1996 ))  California Kyoto CaT (2012 ETS (2011 ) ) France carbon Chongqing tax Pilot (2014 ETS ) ) (2014 THE WORLD REACHED AN ACCORD ON CLIMATE CHANGE  EU ETS Estonia (2005 carbon ) tax (2000) AustraliaCaT California CPM (2012 (2012 - 2014) ) Mexico carbon tax (2014 France carbon (2014) Representatives of 195 nations carbon pricing. Currently, about 40 Climate change could have a EU Alberta ETS (2005 ) (2007) SGER Japan carbon Australia tax (2012 CPM (2012 ) - 2014) Korea MexicoETS (2015tax carbon ) (2014 ) signed on to the landmark Paris countries and 23 cities, states, and significant impact on poverty levels. Switzerland ETS (2008 Alberta SGER (2007 ) ) Québec CaT (2013  ) Japan carbon tax (2012) Portugal Korea ETScarbon (2015tax (2015 ) ) climate agreement on December regions are using a carbon price— The World Bank Group (WBG) is New Zealand Switzerland ETS ETS ) ) (2008 (2008 Kazakhstan Québec CaT ETS (2013 ) ) (2013 Portugal carbon tax (2015 )) South Africa carbon tax (2016 12, 2015. Each country pledged their outputs represent only 12 working with 130 countries to to lower greenhouse gas (GHG) percent of annual GHG emissions. help implement “climate-smart” BC carbon tax (2008 New Zealand ETS (2008 ))  UK carbon price floor ) ) Kazakhstan ETS (2013 (2013 Chile South Africa tax carbon (2017 carbon )(2016 ) tax emissions in what could mark a As part of the Paris deal, more development and will increase turning point in the global effort than 90 developed and developing investments in climate-related BC carbon tax (2008 ) UK carbon price floor (2013 ) Chile carbon tax (2017) to slow climate change. The deal countries have included carbon- projects by as much as $29 billion a Note: Only the introduction or removal of an ETS or carbon tax is shown. Emissions are given as a share of global GHG emissions in 2012. Annual changes in global, regional, recognized the role of incentives pricing schemes among the actions year by 2020—a one-third increase national, and subnational GHG emissions are not in the graph. shownSystem Data on the Note: Only the introduction or removal of an Emissions Trading (ETS) or carbon is shown.of taxcoverage the city-level Emissions Kyotoas are given ETS of accessible; are not a share global GHGits coverage emissions inis therefore 2012. Annual shown as zero. in reducing emissions, including they intend to take. over current levels. changes in global, Note: Only regional, national, the introduction and subnational of an ETS GHG or removal emissions or carbon are tax is not shown shown. in the graph. Emissions Dataas are given onathe coverage share of the of global city-level GHG Kyotoin emissions ETS are not 2012. accessible; Annual changes itsin coverage global, regional, thereforeand is national, shown as zero. GHG emissions are not shown in the graph. Data on the coverage of the city-level Kyoto ETS are not accessible; its coverage is therefore shown as zero. subnational Source: State and Trends of Carbon Pricing 2015 8 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 9 FORESTS SLOW CLIMATE CHANGE Forests and trees provide vital resources to 1.3 billion people. AND INCREASE RESILIENCE For sts provid critic l c rbon sink. It is rod d how v r b d for st tion nd for st d r d tion. 2.9 Other energy 10% Agriculture 12% BILLION Buildings 6% lost to deforestation FORESTS ARE AN IMPORTANT SOURCE OF INCOME and degradation In developing countries, forest income is second only to crops for rural communities with access to forests. Forestry and land use change 12% Electricity and heat production 25% A “HIDDEN HARVEST” Crops: 29% 4 BILLION Transportation 14% About 50% of forest tons of CO2 income is non-cash sequestered in forests Making the net forest carbon sink Industry 21% Self-owned business: 8% FORESTS: 22% $ 50% or a “hidden harvest” that provides food, fuel, fodder and 1.1 BILLION tons Greenhouse gas emissions by sector construction material. Livestock: 12% Sust in bl m n m nt of rur l l ndsc p s Wages: 15% c n r duc pr ssur on for sts. 1 IN 11 PEOPLE FOREST INCOME REDUCES INEQUALITY :etcejGlobal SourcSource: orP nob raC labProjecte: Carbon olG :ecruoScruoS with access to forests are lifted Regions lower their scores for the Gini coef cient – a measure of inequality – 80% of 100 Urban expansion OUT OF EXTREME POVERTY by several percentage points when income from forests is included. 80 Infrastructure thanks to forest resources. Africa Latin America South Asia East Asia 60 d for st tion Mining Agriculture (local/subsistence) 40 worldwid Agriculture (commercial) 20 is driv n b 0 ricultur -3 -5 -3 -4 Global Africa America Asia Sources: FAO (2014). State of the World's Forests 2014; Noack, F. et al. (2015). Responses to Weather and Climate: A Cross-Section Analysis of Rural Incomes. World Bank About 2 billion h ct r s of d r d d for st l nd could b r stor d to Background Paper. function l, productiv cos st ms th t h lp fi ht clim t ch n . In Ni r, pl ntin R storin just nitro n-fixin tr s 350 million h ct r s mon crops incr s d of for st could B int r tin sor hum i lds b produc n stim t d tr s on th ir f rms, 20–85 % nd mill t $170 billion of rl c ttl r nch rs in In Ethiopi , th i lds b 15–50%, b n fits in w t rsh d Colombi , Cost Ric r stor tion of n tiv whil nh ncin prot ction, ricultur l nd Nic r u for st in Humbo will p opl ’s r sili nc in productivit , nd incr s d v r milk bsorb bout 880,000 tim s of drou ht. for st products. productivit b 18%, m tric tons of CO2 ov r d cr s d soil rosion th n xt 30 rs, b 88%, nd incr s d th ir n t incom p r h ct r b 55%. $ n r tin c rbon p m nts nd incom from for st products. Sources: Pan, Y. et al. (2011). A large and Persistent Carbon Sink in the World’s Forests; IPCC (2014). Summary for Policymakers, Climate Change 2014: Mitigation of Climate Change; Hosonuma N. et al. (2012). An assessment of deforestation and forest degradation drivers in developing countries. Environmental Research Letters; Global Partnership on Forest Landscape Restoration (2011); World Bank (2011). Climate-smart Agriculture: a call to action; World Bank (2008). Colombia, Costa Rica, and Nicaragua—Integrated Silvopastoral Approaches to Ecosystem Management Project—Implementation Completion Report; New Climate Economy (2014). Better Growth, Better Climate: The New Climate Economy Report; World Bank (2013) Ethiopia Humbo Community Based Natural Regeneration Project—Implementation Status Result Report. 10 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 11 INNOVATION AND CARBON FINANCE Innovation has been a key factor of the develop scaled up approaches to REDD+ WBG’s work to support carbon markets for across landscapes. over 15 years, providing groundbreaking solutions, tools, and instruments that These three themes, discussed in the next mitigate climate change. This work included section, have the potential to expand our launching the first-ever carbon fund in operations and make them more efficient 2000. and effective. Most importantly, by succeeding in these areas, millions of people Today, innovation continues: we are around the world will benefit from improved spearheading the discussion on how to price health and quality of life, and billions of tons carbon, testing new models for Results- of GHG emissions will be cut. Based Finance (RBF), and continuing to Pioneering History of Carbon Finance at WBG Pioneering Kyoto Broadening & deepening Planning for beyond Testing RBF & intensifying Pioneers of Paris mechanisms Kyoto mechanisms Kyoto & REDD+ carbon pricing discussion mechanisms 2000 2014 Prototype 2008 2013 Carbon Fund Launch 2002 to 2010 2005 2010 11 additional WBG’s 2000 “Kyoto Funds and Facilities” first CDM transaction 2008 2016 2004 2011 BioCF , first land- use fund 2015 1998 2002 2006 2010 2014 Paris Agreement (COP21) 1997 Kyoto Protocol signed (COP3) 2001 Marrakech 2004 2009 2012 Copenhagen Accord (COP15) Accords (COP7) IFC Post-2012 Carbon Facility 2011 2012 2004 First MDB capitalized First commitment First CDM period of Kyoto expired private sector carbon facility registration 12 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 13 MAKING THE CASE AND EVIDENCE FOR CARBON PRICING EVOLUTION OF CARBON PRICING • Carbon Pricing Leadership Coalition • State and Trends of Carbon Pricing reports AT THE WORLD BANK GROUP IMPLEMENTATION, SCALE-UP Enabling scale-up CONNECTIVITY, PLANNING, of carbon pricing DESIGN efforts for a COMPARABILITY Putting a price on carbon is a key component of global efforts to address climate change. Innovating and meaningful price Enabling connectivity building readiness on carbon of carbon pricing efforts It should be an integral part of governments’ sustainable growth policies. Pricing carbon for carbon pricing for a long-term, stable • CPF • PMR also offers a “triple dividend”: giving the private sector the certainty and predictability price on carbon • PMR • FCPF • PAF • TCAF • ISFL needed to make long-term decisions, driving investment in clean technologies, and • Ci-Dev • NCM improving the environment and people’s health through reduced GHG emissions. Governments—at both the national options for pricing carbon, such as a carbon or altogether remove fossil fuel subsidies, and local level—and companies are tax, an ETS, or other measures. Over 30 mitigate impacts on the poor, and use of increasingly turning to carbon pricing to countries—13 of which are participants with carbon pricing revenues. reduce their emissions and meet their carbon pricing mechanisms already in place, mitigation targets. This is particularly true As countries develop their various carbon such as the EU ETS—meet regularly and in the wake of the climate action plans made pricing approaches, they are faced with share lessons learned and suggestions for by countries in the run-up to and during the challenge of how to link or tie these countries that are deciding which approach the 21st session of the Conference of the different solutions together. It is clear that best fits their circumstances. For example, Parties (COP) in Paris, the Intended Nationally a networked carbon market will be more the PMR has been instrumental in guiding Determined Contributions (INDCs). Once the efficient than a patchwork of national or even and offering financial support to South Africa Paris Agreement is ratified by the parties, statewide solutions that are not connected. and Chile in developing their carbon taxes and Supporting China’s Climate Action an INDC becomes a Nationally Determined Under a networked configuration, carbon to China in developing its national ETS. Contribution. An INDC is a country’s post- prices will probably be more stable and 2020 plan for action on climate change. Today, the PMR is looking closely at the emission reductions (ERs) be achieved at a INDCs to see how they can support countries lower cost. But differing political circumstances in implementing their post-2020 mitigation and development priorities mean that With this in mind, the Networked Carbon scenarios, and is developing a number Markets (NCM) Initiative was created countries and businesses require tailored of reports on technical matters such as in 2014 to work with governments, In the past years, China has market is an important example of the and disclosing the key indicators, support to identify, assess, design, and carbon pricing modeling and other analytical demonstrated leadership country’s climate leadership. Building on components, and assumptions that implement successful carbon pricing the private sector, and civil society to the experience of seven ETS pilots currently are used to model mid- and long-term products. policies. There are several pieces that need develop a post-2020 infrastructure to link in climate action in many operational, the PMR has provided China scenarios. One of the products of this to fall into place for this to happen. Countries As a complement to the PMR’s work on heterogeneous climate actions. The aim ways—from testing pilots on a with an $8 million grant to support the support—the discussion paper Pursuing must lay a technical foundation, including key the ground and as a natural progression is to help create a connected international jurisdictional level to planning a National Development Reform Commission an Innovative Development Pathway: toward an international political carbon market that is liquid and delivers in developing a national ETS and in carrying Understanding China’s INDC—has also tools and services for the readiness phase. agreement on carbon pricing, the Carbon financing for services and institutions national ETS for 2017. China has Countries must also move from design to also announced that it intends out analytical work and consultations on helped better understand how China’s political engagement and support, where Pricing Leadership Coalition was launched that are needed to enhance transparency, several essential components of the ETS INDC could be seen as a powerful vehicle key challenges commonly arise. Finally, at COP21 to provide a platform to expand comparability, and fungibility of different to achieve peak carbon dioxide design, including the role of state-owned for innovation and help shift the country as governments design a carbon pricing the collaboration between governments, carbon assets. (CO2) emissions around 2030 enterprises and the power sector. toward a new development pathway. system, they may want to consider linking up businesses, and nongovernmental and increase the share of non- With these three complementary organizations (NGOs) worldwide and China’s national ETS will be one of the Country INDCs—most of which with other systems to benefit from lower- broaden the scope and place of effective initiatives, the WBG is supporting carbon fossil fuels to 20 percent in its cost reduction opportunities and increased most important means to achieving outlined actions to be taken by 2025 or carbon pricing. The 20 governments and pricing on various levels and from many primary energy mix by the the mitigation targets put forward in 2030—were a cornerstone of the Paris efficiency. Sometimes these pieces develop angles to ensure that carbon pricing is sequentially and sometimes in parallel, over 90 businesses and NGOs that have same year. the country’s INDC. In addition, many Agreement. Many of them, in particular taken into account both by the public depending on the country. joined the Carbon Pricing Leadership aspects of the national carbon market those put forward by developing countries, and private sectors in client countries To do so, China has put forward an array of Coalition are creating a space for high-level design—such as setting caps or interacting include both specific targets and climate To advance well-designed and appropriate worldwide as well as mainstreamed into its climate policies, including setting mandatory political dialogue as well as sharing evidence with government policies and development policy actions being considered within the carbon pricing systems around the world, operations. All three initiatives are developing national emission targets in its Five-Year for successful carbon pricing, mobilizing objectives—are closely linked with the countries’ overall development framework. the WBG’s support has evolved over important knowledge products and platforms Plan, pricing carbon through its ETS, progressive businesses to support good country’s mid- and long-term mitigation The integration of these policies into the time. In 2011, the Partnership for Market to facilitate dialogues on several levels, to increasing clean energy investments, and policy, and facilitating conversations on goals. national economic and social development Readiness (PMR) was created to support make sure carbon pricing instruments are accelerating energy efficiency measures, to global, regional, and national levels on how plans is challenging, and the PMR’s 18 emerging economies with financial scaled up and used to cover more than today’s name just a few. to put in place successful pricing policies, With this in mind, the PMR also provides comprehensive support to China aims to and technical assistance to prepare and 12 percent of annual global GHG emissions, despite the obstacles. This includes tackling analytical support that has contributed help address those challenges. implement carbon pricing instruments. and as a key tool to shift economic growth While certainly not the only one, China’s common political challenges that arise in to the development of China’s INDC and This assistance includes readiness support, toward a more sustainable path. effort to develop a national carbon creating a carbon pricing system, such as facilitated the process of presenting which means that countries assess various loss of competitiveness, how to reduce 14 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 15 RESULTS-BASED FINANCE IS TESTING NEW WAYS TO REDUCE EMISSIONS Results-based approaches in climate finance provide payments upon delivery of pre-defined climate Results-based approaches to climate finance are acquiring greater prominence in outcomes, such as verified the international development arena. The WBG has been testing different uses of this GHG emission reductions, approach in a variety of sectors, including energy. Carbon finance is one such example, clean electricity or efficient and together with our partners and donors we are now exploring new ways to apply cook stoves distributed to RBF in our work. rural households As a mitigation tool, RBF is still evolving. The CPF is using the traditional approach Facility (FCPF), its Carbon Fund will provide In 2010, we operationalized the Carbon of RBF by catalyzing investment in results-based payments to many of the 18 Partnership Facility (CPF) to use RBF clean technologies through payments countries in the pipeline, which have made by paying for emission reductions on a for reduced emissions. Recently, the CPF significant progress in their REDD+ readiness programmatic scale. Forest funds and has begun developing new conceptual and endeavors and can show verified ERs, in facilities also use RBF as well as newer methodological approaches for the next addition to social, environmental, and other carbon initiatives like the Carbon Initiative generation of carbon crediting instruments non-carbon benefits. The BioCF Initiative for for Development (Ci-Dev), the Pilot Auction to support broader sectoral transformation Sustainable Forest Landscapes (ISFL) is also Facility for Methane and Climate Change beyond a program-by-program level, and using RBF to scale up climate-smart land use Mitigation (PAF), and the recently announced where implementing countries aim to achieve and transform landscapes using innovative Transformative Carbon Asset Facility (TCAF). more than simply offset emissions. public-private partnerships. One element of this approach is encouraging upstream Each of these carbon initiatives seeks to The Ci-Dev likewise uses RBF to improve investments in land productivity and greening expand the scale and reach of RBF. They access to low-carbon energy solutions private company supply chains. The forest will not only contribute directly to climate in poor countries by offering payments pilots will generate important lessons on RBF change mitigation through their activities, linked to reduced emissions. It is testing that will be useful for the full implementation but also test what works and share useful various models to facilitate this context to see of REDD+. lessons and experiences with the international whether and how carbon RBF can be used in community. The WBG and others will draw on energy access, and to distill lessons learned Finally, at COP21, we announced the the latter to replicate successful approaches to promote the expansion and replication of creation of the TCAF, which will help elsewhere with the view to scaling them up. successful models. It is absolutely vital that countries scale up mitigation using results- these pilots be innovative and represent a based payments for carbon assets. This broad diversity of approaches to demonstrate will lead to economy-wide or sectoral policies the relevance and impact of carbon RBF to and programs that encourage private sector energy access stakeholders. investments in low-carbon technologies. TCAF While the PAF also uses RBF, its approach will pilot innovative crediting mechanisms and is different. As a pay-for-performance provide blueprints for efficient and low-cost mechanism that stimulates private mitigation in areas like renewable energy, investment, the PAF aims to demonstrate transport, energy efficiency, solid waste a new, cost-effective climate finance management, and low-carbon cities. Again, mechanism by providing a guaranteed floor the emphasis is on the lessons learned from price on emission reductions. It determines these activities to jumpstart similar efforts by this floor price by auctioning tradable put others. options, which give winners the right, but not These initiatives all use RBF, be it in the obligation, to sell eligible carbon credits to different ways, and are meant to test the PAF . In July 2015, the PAF conducted its different models and approaches to see first auction for price guarantees—totaling 8.7 what is most successful. However, barriers million tons of ERs—and is planning a second still remain: most of the financing that is auction in 2016. This form of RBF tests the currently available for RBF is public money— willingness of the private sector to reduce using public finance to leverage private sector emissions if the price of carbon is stable and resources and promote financial innovation. predictable. We are still lacking private upfront investment RBF is also being used to reduce finance. The next step is to focus on crowding deforestation and preserve landscapes. in the private sector at an earlier stage. In the case of the Forest Carbon Partnership 16 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 17 FINANCING FOR FORESTRY AND LANDSCAPES The year 2015 was tremendous in terms of efforts on forests and climate. After decades of work, developed and developing countries signed off on wording in the final agreement in Paris that explicitly recognizes the role that land use—forests in particular—has in addressing climate change. For many years, the WBG has been at the and financial leverage, and to partner with environmental integrity, and respects the forefront of innovative funding approaches private firms in the effort to “forest-proof” rights of indigenous peoples (IP) and local and piloted models and instruments to the sourcing of commodities and redirect communities. At the country level, REDD+ tackle deforestation and degradation. market forces toward more sustainable land countries will aim to implement their national The forest trust funds—FCPF and BioCF management practices. REDD+ strategies, which propose actionable ISFL—have been essential to laying multi-sector strategy options to address the the groundwork for more sustainable Cooperation and partnerships with drivers of deforestation and the underlying management and governance of the natural the private sector are emerging that barriers such as natural resource rights, land assets of countries as well as building up will contribute to reducing emissions tenure, and governance. multi-sectoral institutional and technical in targeted FCPF and BioCF countries capacities and systems. including Côte d’Ivoire (Mondelez), Ghana Building on the successes achieved, the (Olam, Mondelez, and Touton), Republic focus is now on implementation and An overarching theme in 2015 for both of Congo (Olam), and Zambia (Cargill). delivery of REDD+ strategies through forest funds was progress on public- Healthy forests and landscapes can help landscape programs. In addition to private partnerships. The private sector can realize reductions in global emissions in partnering with governments, the forest be key to scaling up sustainable practices. the short and long term. These emission funds will continue to work closely with In particular, the ISFL has been designed to maximize private sector engagement reductions can and should be achieved in a way that maintains transparency and IP, local communities, civil society, and the private sector to move this work forward. Gender and REDD+ A socially inclusive approach participate in, contribute to, and benefit FCPF to strengthen REDD+ capacity has been the hallmark of the from various REDD+ policies, programs, and of indigenous Guna leaders, women, funds. As Ghana prepares an ER program and youth. Following their customary FCPF since its inception. This outline for submission to the FCPF Carbon consultation processes, the project held a means one in which vulnerable Fund, gender will remain an important series of community workshops on social “This year in particular, it is or traditionally excluded social element of the discussions and actions on and environmental safeguard issues in the exciting to see the role the World groups such as women, IP, and the way to making REDD+ a reality. Guna Yala comarca (a semi-autonomous other forest dwellers are treated indigenous territory). The project enhanced Bank’s forest and climate funds In Uganda, the government is also the understanding of REDD+ issues as partners in the planning, working with the International Union among the Guna, notably the participation play to support countries in operation of funds, and the for the Conservation of Nature to widen of indigenous women in various capacity- turning their nationally deployment of support for people’s understanding of the impact of climate change and implications for building activities and the informed REDD+. participation of rural stakeholders in the determined contributions gender relations and livelihoods. This work national REDD+ Readiness process. This builds on the Gender and REDD+ Road Map, for global climate mitigation Three FCPF countries are taking concrete which was released in 2012. The government extensive community participation has laid action to ensure the full and effective the groundwork for an ongoing focus on into reality.” participation of women and men in all stages has a 2015–16 Action Plan including concrete women’s role in the REDD+ process. items such as identifying representatives of the REDD+ process. from women’s NGOs and national level It is crucial to take men’s and women’s Geeta Sethi In Ghana, the government partnered organizations to participate in a gender task different needs and knowledge related to Manager with the International Union for the force, preparing training materials on gender, REDD+ into account in promoting gender Forests and Landscapes Climate Finance Conservation of Nature to develop a and identifying ways to inform local women equality. A socially inclusive approach road map that guides the design and of their rights, and also the risks, associated requires a willingness to learn by doing, a World Bank Group implementation of a gender-sensitive with REDD+. commitment to sharing best practices, and REDD+ strategy. The goal is to fully the opportunity to scale up. The outcome Finally, in Panama, the Fundación para is a greater understanding of REDD+ by all integrate gender considerations into the la Promoción del Conocimiento Indígena stakeholders and a more equitable process forestry sector, paying special attention (Foundation for the Promotion of for designing and implementing these to REDD+ processes. It aims to give men Indigenous Knowledge) implemented and women equal opportunities to access, kinds of initiatives. a small grant project financed by the 18 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 19 “Emissions trading is the key to unlocking ambition. If we want to achieve a 2° level of climate protection, we need markets to work favorably; to reward green technologies, to reward green investments, IMPLEMENTING CLIMATE ACTION and to provide an opportunity for companies to transition more with a carrot than with a stick. And the market can do that. Command and The year 2015 was one of major Our “next generation” carbon market control regulations do not. … The market incentive is the most powerful achievements. In total, 19 carbon initiatives initiatives are also yielding fruit. With our are producing results. support, more countries are planning and tool we got. Why not use it?” implementing market-based mitigation The Kyoto Funds are making a difference on policies, such as ETSs and carbon tax Dirk Forrister the ground by reducing poverty, improving schemes, and considering ways to link these. President & CEO the health of women and children in Countries are planning REDD+ programs IETA Moldova and Nepal, and creating greater and piloting new models to scale up access to energy in Bangladesh and Rwanda, mitigation, often involving the private sector, all while reducing GHG emissions. In fact, an important partner in our efforts. the first generation of carbon funds has delivered the reduction of more than 200 The following pages include some facts and million tCO2e, representing the emissions of figures to recap our operational work, outline over 42 million passenger vehicles driven for our accomplishments month-to-month, and “With the help of the Ci-Dev buying our project’s carbon one year. provide a profile of four case studies that credits [from Kenya], the household can purchase the show the human side of carbon finance. biogas equipment at a more affordable price and with increased service. By doing so, SimGas and Ci-Dev help to build a clean energy revolution for millions of rural households in Africa and Asia, while contributing to the reduction of indoor air pollution, deforestation, and carbon emissions. ” Sanne Castro Founder & CEO SimGas “Reaching this stage of our vehicle replacement program was a real challenge, luckily achieved given the continuous support of WBG’s technical team. Also being part of the CPF seller participants and sharing knowledge with the buyer participants and other countries’ projects was a remarkable experience.” Amgad Moneir Ministry of Finance Egypt 20 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 21 KYOTO FUNDS AND FACILITIES Regional Distribution (by project) Sectoral Distribution (by project) 13% 2% 1% 6% The WBG launched the first global carbon fund, In 2015, this group of Funds and Facilities reached an n Middle East 4% 14% n Fossil Fuel Switch the Prototype Carbon Fund, in April 2000. In the important milestone when it surpassed the level of 200 million tCO2e, reaping the fruits of its work over the past decade. To n Latin America n Transport 15% 38% following seven years, another 11 Kyoto Funds and n South Asia n Fugitive Emissions date, these instruments have delivered 92 percent of their Facilities were launched at the WBG to pioneer a commitments. n Europe n Forestry/Agriculture 28% 17% full range of flexibility mechanisms.* n East Asia n Energy Efficiency The Kyoto Funds and Facilities’ success is now informing the Today, the Kyoto Funds and Facilities are fulfilling their preparation and piloting of the next generation carbon finance n Africa n Waste Management/ 16% objectives and commitments with participants. In 2015, initiatives. Methane Avoidance 22 Emission Reductions Purchase Agreements (ERPAs) n Renewable Energy delivered ERs and closed. Furthermore, some ERPAs were Peak Capitalization $2.76 billion 22% Date Operational April 2000 24% terminated without delivery, as they did not meet the conditions of the ERPA. Participants 74 Private Capital Invested 56% These charts depict the regional and sectoral distribution of 148 ERPAs in 2015. This includes both the number of active and closed ERPAs, that is, those that have fully delivered ERs per their contracts. Note that these figures only include Kyoto * Flexibility mechanisms are mechanisms defined under the Kyoto Protocol: the Clean Development Mechanism (CDM), Joint Implementation (JI), and emissions trading, intended to lower the overall costs of Funds and Facilities. achieving its emissions targets. Total Kyoto Funds ER Delivery per Fiscal Year Delivering Ground-Breaking Action in 2015 200.51 203.29 CARBON 200 193.65 200 MONTH PROJECT PROJECT TYPE PIONEERING RESULTS 182.58 CREDITS January Bangladesh Solar Home Solar Panels 413,660 - First renewable energy Programme of Systems Program Activities (POA) in Bangladesh to issue 150 150 Certified Emission Reductions (CERs) - First POA worldwide for solar home 124.39 systems to generate CERs - Largest issuance of CERs from a POA 88.55 100 100 in a LDC 45.77 62.13 23.28 58.18 April Moldova Biomass and District Heating 89,500 - First CDM project to issue CERs in Moldova Energy Conservation Efficiency - One of the first sets of bundled projects for 50 50 35.85 Project heating efficiency to issue CERs worldwide 26.41 22.49 - First methodologies for GHG emissions 16.36 3.96 2.34 11.07 accounting from energy efficient heating 0.10 0.11 0.46 1.61 6.86 19.32 2.78 0.10 0.00 0.36 1.15 technology and fuel switching for small- 0 0 scale bundled projects 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total delivered ERs per FY Total accumulated ER delivery May Nepal Micro-Hydro Community 66,350 - First micro-hydro project to issue CERs in Project Managed Nepal Micro-hydro - First micro-hydro project to issue CERs in This chart depicts total emissions delivered by the Kyoto Fund and Facilities on an annual basis as well as their cumulative the South Asia region emissions during the fiscal years 2003–16. Please note that the data set only includes data up until December 31, 2015. August India Himachal Pradesh Sustainable 65,580 - First issuance of CERs in India Reforestation Project Forest Management - 600 villages involved in afforestation Practices activities - 3,200 hectares of land restored 22 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 23 NEXT GENERATION CARBON MARKET INITIATIVES BioCF Initiative for Sustainable Carbon Initiative for Development Pilot Auction Facility for Methane and Forest Landscapes The Ci-Dev became operational in April 2014 Climate Change Mitigation The BioCF ISFL was launched in November and is meant to increase access to low-carbon The PAF is an innovative climate finance 2013 and seeks to promote REDD+ and energy in the world’s poorest countries by model to stimulate private investment in The WBG has taken the lead in In its portfolio, the WBG has seven different carbon initiatives sustainable agriculture, as well as smarter offering carbon-linked RBF using the CDM. projects that reduce GHG emissions, while that aim to scale up ERs, build readiness for domestic carbon shaping the next generation carbon pricing plans, use auctions to put a price on carbon, increase land use planning, policies, and practices. Ci-Dev supports initiatives that deliver strong development benefits in vulnerable maximizing the impact of public funds. The objective of the PAF is to demonstrate a new, The initiative will deploy RBF to incentivize initiatives. Each year, new approaches access to energy in least developed countries (LDCs), and changes at the landscape level. communities, using performance payments cost-effective climate finance mechanism by reduce emissions from deforestation and forest degradation. based on ERs while building capacity and providing a guaranteed floor price on ERs. such as performance-based payments and The BioCF ISFL recognizes the important developing tools and methodologies to help The PAF offers tradeable put options that auctions are being developed These carbon initiatives had a total facility capital of close to role that the private sector plays in spurring innovation, leveraging cutting-edge expertise the poorest countries access carbon finance. provide holders the right but not the obligation $1.9 billion as of December 31, 2015. and launched. and knowledge, and mobilizing the capital Of the initiative’s total funds, $27 million to sell future ERs to the PAF at a pre- necessary to scale up successful land use has been allocated to the Readiness Fund, determined price (the “strike price”). If carbon practices and accelerate the greening of which builds capacity via grants and training market prices rise above the strike price, supply chains. The initiative is designed for project implementers to help develop owners of the put options can sell their ERs to work alongside a wide range of private the infrastructure to design, implement, to other buyers in the carbon market rather actors, from multinational corporations to and monitor CDM projects. The Readiness than to the PAF . If market prices fall below large national actors and emerging small and Fund also supports Ci-Dev’s Methodology the strike price, the put option owner has the medium enterprises and smallholders. Work Program (MWP) and knowledge right to sell emission reductions to the PAF at management work program. The fund’s a pre-determined price. The PAF uses online The BioCF ISFL uses two main types of knowledge management strategy is being auctions as a competitive and transparent financing for countries: (i) grant funding Forest Carbon Partnership Facility Carbon Partnership Facility Partnership for Market Readiness and technical assistance (BioCFplus) and drafted, and will help guide how to learn from Ci-Dev’s pilot programs and their innovative means of determining the value of the price guarantees. The FCPF was launched in 2008 and Tranche 1 of the CPF became operational Operational since 2011, the Partnership for (ii) RBF for achieved ERs (BioCF T3). Both and transformative business models, as well focuses on reducing emissions from in May 2010 and the CPF’s Carbon Asset Market Readiness (PMR) brings together financing types are designed to complement The PAF disburses resources only against as how to disseminate that learning among deforestation and forest degradation, forest Development Fund became operational more than 30 countries and institutions whose each other to provide incentives to enhance independently verified ERs. This pay- stakeholders in energy access, climate carbon stock conservation, sustainable in January 2009. The CPF uses scaled actions are critical to global climate mitigation the enabling environment for sustainable for-performance feature is attractive for finance, and development. management of forests, and enhancement up, programmatic approaches to enable efforts. Over the years, the PMR has evolved development that reduces deforestation governments facing expanding funding of forest stocks (REDD+). The FCPF carbon finance to support partner country into one of the key platforms designed to and changes the way land use decisions are needs and scrutiny on achievements. The Facility Capital $123 million combination of auctions and results-based demonstrates how REDD+ can be applied initiatives aimed at moving toward low- help countries prepare for the introduction made. carbon economies. It targets such areas as Date Operational April 2014 payments maximizes value for public money. at the country level. and implementation of carbon pricing and renewable energy, energy efficiency, and other innovative instruments to reduce GHG Facility Capital $354 million Participants 4 The FCPF has two separate but waste management. emissions cost-effectively. Date Operational November 2013 Facility Capital $53 million complementary funding mechanisms—the Readiness Fund and the Carbon Fund— The CPF is currently developing such scaled The PMR currently provides technical and Participants 8* Date Operational November 2014 to achieve its strategic objectives. The up crediting programs to support renewable financial assistance to 18 countries by: Participants 4 Readiness Fund supports participating energy in Sri Lanka and energy efficiency in *3 programs and 5 financial contributors. • Strengthening institutional framework and countries in the development of REDD+ Vietnam. In addition, opportunities for new building readiness in order to facilitate strategies and policies; reference emission market-based mechanism approaches for a choice, design, or implementation of levels, measurement, reporting and mitigation actions in cities are being studied carbon pricing instruments; verification systems; and institutional aimed at suggesting a design framework for capacity to manage REDD+ including piloting city-wide mitigation actions. The CPF • Carrying out technical work in order to environmental and social safeguards. is also exploring innovative approaches to facilitate experience and knowledge The Carbon Fund builds on the progress GHG monitoring and accounting for economy- sharing, develop practical guidance on made in readiness and is designed to pilot wide policies, such as the introduction of common issues, identify good practice Networked Carbon Market Initiative performance-based payments for ERs from a carbon tax and the reform of fossil fuel and common standards, and build REDD+ programs in a small number of subsidies. necessary technical capacity; and The NCM Initiative is part of the WBG’s long-term efforts to promote Independent FCPF countries. and enable carbon pricing, and complements ongoing work to assist • Providing economic and policy analysis Assessment Framework Facility Capital $134 million countries in designing and implementing carbon pricing systems. It does The FCPF made progress in shaping an support (including on carbon pricing to guide the implementation not advocate a “global carbon price”—but putting a “price on carbon”— increasingly diverse portfolio of landscape- Date Operational May 2010 modeling) to inform decisions surrounding and assessment of climate actions recognizing that carbon assets from different climate mitigation efforts level, cross-sectoral programs that bring Participants 10* the selection and introduction of carbon by defining the elements that a robust will have different climate change mitigation values and prices. The climate action should include public and private partners together pricing instruments. end goal is a connected international carbon market that has liquidity, around forest conservation, sustainable *3 buyer participants and 7 seller participants. scale, and the foundation for a long-term, stable price on carbon. To PMR is also a platform for knowledge sharing land use and high-quality ERs at scale, date, the NCM Initiative has launched a global discussion on the post- through meetings, events, reports, and other which underscore the FCPF’s emphasis 2020 services and institutions that might be needed for a connected activities where experiences are shared. International International on social inclusion in program design and international carbon market in the future. implementation. Settlement Platform Carbon Asset Reserve Facility Capital $127 million The NCM Initiative collaborates with a wide range of partners to to track cross-border trade to help domestic regulators Facility Capital $1.1 billion Date Operational April 2011 stimulate a global conversation on how to enhance the transparency, transactions manage market risks or address market Participants 34* comparability, and fungibility of diverse climate actions. Through the failure by pooling risk mitigation Date Operational June 2008 NCM, the WBG is convening stakeholders to develop a framework measures on an international level Participants 64* for assessing climate mitigation efforts and infrastructure to support *13 contributing participants, 17 implementing country participants, and 4 technical partners—including one who carbon market-related functions. It responds to the need for reliable and *47 FCPF countries and 17 financial contributors. receives assistance. well-synthesized information on the relative value of different climate mitigation efforts, given the increasing regulatory fragmentation and heterogeneity that is emerging across and within jurisdictions. This year’s facility capital includes legal commitments. Previous years included both pledges and legal commitments. 24 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 25 Philippines PARTNERS AROUND THE WORLD Low-carbon Technologies Promoted by Carbon Finance The CPF signed two ERPAs in June and December in the The WBG supports carbon finance operations and Alberta, Canada Philippines. Both include low-carbon technology systems that RECIPIENTS programs in about 75 countries, as shown on the map. capture and combust methane gas and generate electricity of These operations and programs comprise activities Province Shares Strategies for Climate Action less than 15 MW: DONORS/CARBON FUND PARTICIPANTS Information as of December 31, 2015. undertaken by the FCPF , CPF, PMR, and BioCF ISFL as well In October, Alberta joined the PMR as a Technical Partner. The • Landfill Gas Recovery POA: installation of landfill gas as by the Kyoto Funds and Facilities. province shares its experience operating an intensity-based ETS collection systems. and an offset program since 2007 , in the context of economic In 2015, six new ERPAs were signed in three countries: • Animal Manure Methane POA: installation of anaerobic growth and the significant industrial component to the emissions Brazil, Philippines, and Zambia. We delivered on and closed wastewater treatment systems in up to 100 farms. profile. Moreover, Alberta has set up an Emissions Management ERPAs in six countries: Bulgaria, Czech Republic, Ecuador, Fund, which provides an interesting model of carbon revenue Together, these two POAs are projected to reduce ERs by over Hungary, Indonesia, and the Russian Federation. In 2016, recycling for PMR Participants. 3.5 million tons. CPF and Ci-Dev are projected to sign about ten ERPAs. A total of 20 governments support the carbon funds and facilities by purchasing ERs as carbon fund participants and/or contributing donor resources to readiness activities. Like last year, 59 private sector firms and three civil society organizations also support our activities and, together with the public sector, purchase ERs through the carbon funds and facilities. In addition, there are about 30 corporate firms that the different carbon market initiatives engage with and discuss solutions for low-carbon development. Engagement with the private sector has increased significantly this past year, firstly through the PAF auction as it sells ERs to the private sector. Secondly, through the NCM which collaborates with a wide range of stakeholders in discussions on future carbon markets. Country Progress RECIPIENTS REDD+ countries continue to make strides in developing DONORS/CARBON FUND PARTICIPANTS large-scale REDD+ program proposals that have the potential to transform rural landscapes. Information as of December 31, 2015. 2015 Democratic Republic of Congo A total of 18 countries are implementing readiness activities for ER programs, 7 of which joined this First Country to Present its Readiness Package Colombia The endorsement of the Readiness Package from the group in 2015. Agriculture Region Promotes Sustainable Land Democratic Republic of Congo by the FCPF Participants Committee (PC) as the first country to advance REDD+ Use and Reduces GHG readiness was an important milestone in 2015. The document provided a snapshot of DRC’s readiness The new ISFL program in the Orinoquía region progress relative to the country’s circumstances and promotes a business environment that is conducive 13 countries have road maps for carbon market recognized that capacity continues to be built beyond the to sustainable agriculture practices and production readiness. South Africa’s final MRP was submission milestone. An important part of the package systems by strengthening institutional capacities. approved in 2015. was the inclusion of a participatory and comprehensive 2 draft The program supports multistakeholder dialogues self-assessment conducted by the country. The PC was MRPs presented Preparation Phase within priority supply chains, such as cattle, palm, also pleased with new legislation under preparation and forestry, to define best practices, performance related to IP’ rights. DRC was encouraged to continue standards, and marketing strategies that contribute strengthening institutional arrangements to coordinate to the sustainable, competitive development of these and implement REDD+ activities and to make progress on Implementation Phase sectors. GSDPM 2015 2015 REDD+-related policy reforms, including land use planning Map Design Unit IBRD 40031R1 | MARCH 2016 and land tenure. This map was produced by the Map Design Unit of The World Bank. 6 countries have begun implementation of their The boundaries, colors, denominations and any other information shown on this map do not imply, on the part of The World Bank market readiness activities. Brazil, Costa Rica, and Group, any judgment on the legal status of any territory, or any endorsement or acceptance of such boundaries. Morocco joined this phase in 2015. 26 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 27 NCM Road Show Carbon Expo in Barcelona 2015 HIGHLIGHTS In June and July, the NCM Initiative cohosted a “road The 12th edition of Carbon Expo attracted over 2,200 visitors show” of three workshops on Enabling Comparability and from 109 countries interested in presentations and conversations Connectivity of Climate Markets in London, Washington, on the current state of the carbon market and outlook for the DC, and Sydney, together with the Climate Markets and future. The Expo is the world’s leading international conference Investment Association, Price Waterhouse Coopers, and Baker & McKenzie. These events provided an opportunity High-level Dialogue with for emissions trading, carbon abatement solutions, and clean to update stakeholders on progress relating to the NCM technologies. A number of carbon initiatives, including PMR, PAF , Indigenous Peoples BioCF , and NCM hosted and cohosted a total of eight events. and its technical and analytical work plan. FCPF observers Supporting the from Africa, Asia, Implementation of a Launch of Carbon Pricing Watch and Latin America Carbon Tax in South participated in a The Carbon Pricing Watch, an early brief previewing the annual Africa State and Trends of Carbon Pricing 2015 report, was launched at JUNE high-level dialogue, Networking Carbon At the 11th Partnership Assembly organized by the the Carbon Expo. It compiles the latest data on carbon pricing Markets Knowledge WBG and hosted initiatives around the world, together valued at almost $50 billion. (PA) meeting of the PMR in London, Several carbon taxes and one of the world’s largest ETSs were Series Launched United Kingdom, South Africa by President introduced in recent years and more initiatives are planned. First PAF Auction presented its final Market Readiness Jim Yong Kim. This knowledge event brought the The PAF held its first online auction to stimulate Proposal (MRP) and was allocated It focused on finance and investment sectors a $5 million grant to support the mechanisms Improved PMR Procedure and Process investments in projects that reduce GHG emissions. together to discuss ways to assess The first auction focused on methane projects, and design and implementation of a for deepening IP inclusion in WBG At PA12 in Barcelona, Spain, the PMR received its first the relative value of climate mitigation tested an innovative climate finance model that carbon tax. The PMR’s support to processes for sustainable development. independent evaluation and implemented a new operations and efforts and enabling cross-border maximizes the impact of public funds and leverages South Africa will help implement FCPF observers have also been actively monitoring system, including a dashboard for country progress. trade on the basis of carbon exchange private sector financing. The auction set the floor price the tax, including developing data supported to be able to participate in The PMR also presented a technical note on how international rates. Participants also explored for future carbon credits at $2.40. management and a Monitoring, other international dialogues. offsets are used in a domestic context. Moreover, the PMR institutional requirements, including how the creation of an International Verification, and Reporting (MRV) hosted two workshops on understanding INDCs. Carbon Asset Reserve and International system as well as a related offset Africa Carbon Forum In May, PMR issued its first electronic newsletter China Carbon Settlement Platform could support scheme. Following the PA meeting, in Marrakech Market Monitor, providing timely information on the seven carbon market-related functions and, the PMR held a workshop on carbon The 7th Africa Carbon Forum focused on Chinese pilot carbon markets. ultimately, a networked international markets’ role in the new climate finance, development, and investment carbon market. regime. opportunities related to climate change and of interest to project developers and policy makers. This year’s forum also featured a high-level ministerial segment, ARY JANU giving African governments an opportunity to discuss South-South Knowledge their expectations Exchange on Planted for and planned contributions to an Forests international climate As part of FPCF and BioCF ISFL change agreement forestry operations, stakeholders in Paris. The WBG in Ethiopia and Mozambique have CH Important Milestone in the FCPF MAR convened a meeting expressed interest in increasing their for African negotiators understanding of different aspects A new milestone in REDD+ readiness was reached when the to support their discussion on the options of planted forests. For this reason, Democratic Republic of Congo became the first country to “An effective carbon price is an for carbon markets in the negotiating government and private sector present its readiness package at FCPF Participants Committee essential, if insufficient, part of text, to understand which of the options representatives from these two (PC) 19. Also at this meeting, a knowledge-sharing session on a policy package that can lower aligned best with African interests, and African countries traveled to Brazil decision support tools illustrated how the FCPF is making the emissions and drive the economy to devise a strategy for the next round of to learn about sustainable forest technical dimensions of REDD+ more accessible for REDD+ toward a low-carbon, resilient CDM and market negotiations. plantations. The study trip included countries. meetings and learning sessions on future. It makes pollution more how forest plantations can promote expensive, incentivizes efficiency FCPF Carbon Fund meeting Supporting Energy Access rural development and reduce and clean production, and helps At the 12th meeting of the Carbon Fund, through RBF Using the CDM pressure on native forests. business leaders and investors held in Paris, France, a record number of The Ci-Dev organized technical workshops in Uganda and Togo to The first PAF auction was awarded: understand the long-term nine REDD+ countries presented new discuss how to support improved energy access in Africa through Environmental Finance magazine Carbon ideas for landscape programs. direction of travel.” RBF delivered with the CDM. Deal of the Year Award and the MTNi JULY Editors Award Y UAR Rachel Kyte FEBR Former Vice President and L Special Envoy for Climate Change APRI MAY World Bank Group 28 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 29 BER R 2015 HIGHLIGHTS BER NOV EM DECE MBE ...continued OCTO Costa Rica Presents REDD+ Readiness At FCPF PC20, Costa Rica was Six FASTER Principles for Seven New Countries the second country to present its Carbon Pricing in the FCPF Carbon Fund Readiness Package. In addition, The FASTER Principles for Successful At the 13th FCPF Carbon Fund meeting, held at the second joint UN-REDD Activities at COP21 Carbon Pricing report, issued by the in Brussels, Belgium, seven countries were Programme/FCPF Knowledge The WBG supported several WBG and the OECD, helps governments selected into the Carbon Fund pipeline, Exchange event, over 100 governments and other organizations and businesses bringing the total to 18. These countries participants shared lessons learned in hosting a number of side events on ER EMB develop efficient presented diverse ideas for large-scale ER during eight sessions on engaging carbon finance and carbon pricing in SEPT and cost-effective programs that ranged from reforestation with the private sector on REDD+, Paris during COP21. instruments to put efforts on land reclaimed from a canal to carbon stock assessments and a price on the social more sustainable cocoa production through monitoring in indigenous territories, JULY Launch of the State costs of emissions. partnerships with private sector chocolate and social inclusion. and Trends of Carbon This new report companies. • Pursuing an Innovative Development Pathway: Pricing 2015 lays out six key $339M Jurisdictional Programs principles to price Understanding China’s INDC on Integrated Landscape This report gives an overview of carbon, based on Sri Lanka Explores • Exploring INDC Implementation Management existing and emerging carbon pricing economic principles Carbon Finance for Challenges: Insights Gained from instruments around the world. Carbon This workshop focused on strategic pricing instruments cover about 7 billion and experience of what is already Renewable Energy Analytical Work in Colombia, working around the world. issues related to program design and implementation of jurisdictional tCO2e, or 12 percent of annual global GHG emissions, The FASTER principles are: The CPF signed a Memorandum of Understanding with the government of PLEDGED BY Costa Rica, and Peru • Carbon Pricing around the programs. Participants included African a threefold F for fairness; Sri Lanka, as the latter plans to implement GERMANY • NORWAY World: Leveraging 10 Years of technical leaders—counterparts to the various measures to create a more certain increase over A for alignment of policies UNITED KINGDOM Experience in the EU BioCF and the past decade. and objectives; and investor-friendly environment for FCPF—who It also offers S for stability and predictability; renewable energy. These measures include SUPPORT CIRCA FIVE NEW • Launch of the Carbon Pricing ER PROGRAMS FOR FCPF are involved a detailed T for transparency; policy and financial incentives supported Leadership Coalition with review of E for efficiency and cost by carbon finance. The government has managing competitiveness effectiveness; and set an ambitious target to achieve 20 jurisdictional and leakage in R for reliability and percent power generation by 2020 from REDD+ existing carbon environmental integrity. nonconventional renewable energy, which programs. pricing initiatives. includes wind, mini hydro, biomass, and • Africa Ministerial Highlights The report also solar. It currently generates 9.85 percent of REDD and Forestry Programs Innovation total power generation from these sources. in Mozambique, Ethiopia, and New Standard for Rural provides a timely assessment of the in Climate Finance CARBON FUND Republic of Congo Electrification advantages of international cooperation in reaching stringent GHG ERs. An article on PAF was featured in Broadening the PMR and TCAF: New $500 Ci-Dev continued to help streamline the “Carbon Mechanisms Review” CDM processes and procedures through Deepening its Country Million Initiative magazine (3rd issue, 2015), under the • Nordic Climate Action: High its MWP , by funding the new, small- Design Meeting of Carbon heading Looking Support On day one in Paris, four countries— Sustainable Development scale GHG accounting methodology Pricing Leadership Back into the At its 13th meeting, the PA of the PMR Germany, Norway, Sweden, and Impact Projects under the CDM AMS III.BL: Integrated Methodology for Coalition Future. The piece allocated additional funding to Kazakhstan, Switzerland—announced the Electrification of Communities. Approved The Carbon Pricing Leadership Coalition covered the a Technical Partner, for targeted technical Transformative Carbon Asset by the CDM Executive Board at its 85th grew out of the movement to support first auction of support to implement the country’s national Facility, a new $500 million initiative meeting, the methodology enables the carbon pricing at the Climate Summit the PAF , with a ETS. Also, Alberta joined the Partnership as that will find ways to incentivize crediting of ERs from electrification • Comparing Mitigation Efforts 2014. Today, it involves more than 80 focus on results a new Technical Partner. Jordan and Peru large-scale cuts in GHG emissions of rural communities using renewable across the World—How to Trade global businesses, governments, and achieved, the presented their draft MRPs for discussion to combat climate change in energy (for example, through the Emissions after Paris NGOs that work together to advance experience gained and the PA’s feedback. developing countries. The TCAF installation of solar panels for household effective carbon pricing around the in a nutshell, and The day prior to the will help implement plans to cut electricity generation). It broadens the world. This initiative sent a clear signal lessons learned. PA, the technical note emissions by creating new classes coverage of small-scale methodologies leading up to and beyond COP21: Carbon Leakage: of carbon assets associated with for electrification while providing • Catalyzing Climate Change carbon pricing is here Theory, Evidence and reduced GHG ERs, including those simplified monitoring procedures to Investment—Lessons Learned to stay, and there is a Policy Design was achieved through policy actions. reduce transaction costs. These and from 1st PAF Auction growing set of leaders presented. There was The TCAF will pay for carbon assets other MWP efforts are aimed at making who are ready to work also a public event on the CDM more accessible in LDCs. with high environmental integrity together to raise collective energy reform and and a strong likelihood to comply climate ambition through climate policies in the with future international rules, • Beyond the Usual Suspects— successful carbon pricing region. and will share its learning with the Webinar of report organized Innovative Partnerships for Land implementation for years international community. Use Mitigation to come. 30 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 31 ACHIEVEMENTS AND IMPACTS: The Year at a Glance 8 13 meetings, events, workshops including $339M 4 pledged at COP21 Letters of Intent for large-scale emission reductions programs signed in 2015, bringing the total to 11 overall. 2 webinars: Forest Carbon Assessment in the Amazon’s Indigenous and Protected Area countries signed readiness grants in What, Why, and How of Forest 2015, bringing the total Governance Assessment to 37 overall. 8 POAs in 7 countries 2 POAs in Philippines 3M carbon credits projected 40K taxis replaced 2M tons of methane gas will be collected since inception from program in Brazil in Cairo, Egypt from farms with millions of pigs $53M 26 PA Technical Workshops Technical Public Webinars and Newsletters Technical Notes and Augus t 2 0 1 5 Meetings and Meetings Trainings Events E-Learning Guidance Documents Crediting-Related Activities under 3 9 1 1 2 3 7 the PMR Status and Support for Implementation total knowledge grant exchanges allocation and products 5 Sessions on Post-2020 Carbon Markets 4 2 “forest-proof” briefs on stakeholder and private 70M target 3 programs sourcing of commodities including sector engagement countries in jurisdictions coffee cotton beef events on landscape management covering more than... hectares in Africa 10+ 250 project ideas reviewed Promoting low-carbon technologies while providing energy access: Methodology reform of the CDM process resulting in 1 new methodology: AMS III. BL Integrated Methodology for Electrification of Communities and 4 cook stove l 4 mini-grid 2 revised methodologies: projects ERPAs AMS I. L Electrification of rural communities using renewable energy 14 selected for pipeline 3 biogas l 3 renewables expected to be signed AMS III. BB Electrification of communities through grid extension or construction of new mini-grids 1 8.7 million tons of 11 webinars Lessons Learned report First CO2e expected to and presentations from the First Auction Briefing note on applying Auction be reduced in 7 countries the PAF Mechanism to the Oil & Gas sector Collaborating with more than 6 reports & 10 events and side events at international climate 30 organizations including a road show on 3 continents conferences in 2015 32 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 33 413,659 carbon credits were issued IMPACT SHOWCASE 1: Lighting Rural Bangladesh with Rooftop for Solar Home Systems POA Poor remote communities Bolstering Financing through Solar Panel Subsidies Help the Poor in 2015: largest issuance in in Bangladesh are gaining Carbon Credits The solar panels are subsidized by the Solar power is helping to green managing entity, a state-owned financial Bangladesh to date access to green, off-grid power Bangladesh’s energy mix. The institution that provides families with by installing solar panels on government aims to increase renewable grants and credits to pay for part of the the roofs of homes and small energy from 1 to 10 percent of its national cost and provide electricity in a country businesses. Life has changed grid power by 2020. Adding solar panels where only 60 percent of the population to rural homes is an important part of and about 42 percent of rural households thanks to better, safer, and the country’s sustainable development have access to electricity. About 13 cheaper lighting, and the ability strategy. million rural households still live without to power electrical appliances. power. Even those connected to the grid Solar home systems also reduce GHG experience blackouts during peak hours This is one of the fastest growing emissions and earn carbon credits by because electricity supply cannot keep up renewable energy programs in the reducing the use of kerosene lamps for with demand. world. More than 3.5 million solar home lighting and diesel generators that had systems have been installed in rural been used to charge batteries. Installing solar panels has become a areas, creating 70,000 direct jobs, for reliable and increasingly financially Bangladeshi men and women. In 2015, the Bangladesh Solar viable solution for Bangladeshis. A Home Systems POA became the 20 watt-peak system costs about $150, It is estimated that nine million people first renewable energy program in which is paid by the users over three benefit from this carbon finance Bangladesh to issue carbon credits and years, and provides enough electricity to program. Families can hear weather the world’s first POA for solar home power two lights and one mobile charger. forecasts on the radio and charge cell systems under the CDM to generate phones. Lamps allow children to study carbon credits. A total of 413,659 carbon Overcoming the affordability barrier longer, and street lights improve safety in credits were issued, generated by 12 has been crucial to the widespread the dark, especially for women. Replacing individual programs. This is the biggest- adoption of solar home systems. conventional kerosene lamps and their ever issuance for a POA in a LDC, and The cost of solar panels has gradually toxic fumes with “green” lighting helps the largest issuance in Bangladesh to come down, and there is now a growing reduce indoor air pollution, fire hazards, date. The CDCF provided support through trend toward the installation of very and health risks such as respiratory technical assistance and purchased the small, 10 watt-peak panels, giving poorer diseases. carbon credits, creating a shared revenue households access to electricity. stream for the program. Rural electricity also boosts business. The Bangladesh program is one Families gather at the local grocery store of the most successful solar home to watch the news and shows on TV at system programs in the world. It is a night. model that is bringing cheaper and more reliable electricity to remote areas of the It is estimated that nine million people country and has potential to go beyond Bangladesh and be adopted in other benefit from this carbon finance program. developing countries. 34 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 35 IMPACT SHOWCASE 2: Micro-Hydros Earn First Carbon Revenues in Nepal The rivers, lakes, and glacial also boosting local mechanization for grain and saw mills and printing shops, melt in the rugged mountains creating local jobs. of rural Nepal offer plenty of renewable resources for Other benefits are improved health energy. Between 2007 and and household finances. People breathe in less smoke from oil lamps 2014, the Nepali government and diesel generators. They spend built over 400 micro run-of- less money on kerosene, diesel, and the-river hydropower plants batteries. Moreover, the environment with help from the WBG. benefits from reduced chemical pollution associated with the use of dry These new micro-hydros provide cell batteries. almost 150,000 rural households—or about 625,000 people—access to Community Ownership of the Hydros reliable and clean power. The smallest Each community was able to install a micro-hydro plant, at 7 kilowatts, micro-hydro at a subsidized price, at provides electricity to about 100 between 35 to 55 percent of the total households. The largest one, at around investment. Some of the communities 116 kilowatts, serves close to 950 are so remote that their only access households (over 4,000 people). to the hydros is on foot—a hiking trip of seven hours along treacherous And for the first time in Nepal and mountain trails. Significantly, the hydros South Asia, a micro-hydro project has are owned, constructed, managed, issued carbon credits by replacing and operated by the communities diesel fuel with renewable energy. themselves, oversight and training being These credits are sold, and the provided by AEPC’s 16 district centers. revenue helps pay for operations and maintenance of the hydros. In May They also established a hydro 2015, the project issued 66,345 tons management committee that is of CO2. The credits were purchased by responsible for collecting a small, flat the CDCF , which also provided technical fee from households and businesses assistance to develop the project. to pay for operator salaries and small repairs. About 1,250 plant operator Micro-Hydros Change Lives positions have been created, thereby The micro-hydros are changing lives further supporting the communities. by lighting remote Nepali villages While the earthquakes of April and May with off-grid, renewable electricity. 2015 affected the entire population and Streets and businesses light up at damaged about 130 of the 426 plants, night, increasing safety and attracting the Nepali government has pledged customers. Children have light to do to rebuild all damaged plants; 84 were their homework. People listen to the already fully or partially operational again radio, charge their cell phones, and in July 2015. power small machinery. Electricity is 36 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 37 IMPACT SHOWCASE 3: Climate-Smart Farming in Kenya BioCF projects help small landholders develop farming a carbon accounting methodology for agricultural land management. Working with skills, which in turn increase Working with the Swedish NGO Vi Agroforestry, the project has provided the Swedish NGO yields, income, and ultimately support food security and training in sustainable land management to over 30,000 smallholder farmers. Vi Agroforestry, build resilience to climate These farmers live in an area that covers approximately 45,000 hectares in the project has change. Also, BioCF payments for carbon credits add another Kenya’s Nyanza and Western provinces. provided training layer of support and income The farmers have seen maize yields double and even triple in only three in sustainable land stability. years. Despite not being allowed to own land, women have also been actively management to over As farmers learn new methods to revitalize their land, they reap the engaged in the project and are known to adopt more diverse land practices 30,000 smallholder benefits and share their experiences with their community. These improved and produce higher returns than men. Women have also taken on leadership farmers. methods—available at no cost to the roles, aggregating information from farmers—include guidelines for planting individual farms, and training their peers. trees and crops as well as for harvesting in ways that produce natural nitrogen Benefits Extend beyond Farmers fertilizers in the soil (thereby improving to Communities the longevity of the land). As a result of A total of 25,000 tons of CO2 have this new land management approach, been sequestered so far as a result communities now value standing trees of better agricultural practices, and and the resources they provide more Kenyan farmers have received $65,000 than in the past. in carbon revenue for environmental services provided. The benefits derived Land Management Generates from higher incomes thanks to higher Carbon Finance 30K farmers agriculture yields and carbon payments In Kenya, the BioCF showed go beyond individual farms. They have innovation in sustainable agriculture enabled the Kenyan community to plow land management practices by investments back into the land and issuing carbon credits (the first serve as a model for other agricultural country to do so) and developing land management projects. 38 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 39 IMPACT SHOWCASE 4: Carbon Credits Heat Moldova in Bitterly Cold Winters The Republic of Moldova— one of the poorest countries The revenue helps municipalities pay for investment in energy-efficient Before, I had to wear in Eastern Europe—suffers measures such as insulation and new windows, as well as the salaries of the gloves in class during from bitterly cold winters, with temperatures dipping technicians who operate and maintain the new boilers. So far, the project has the winter because well below freezing. It is reduced GHG emissions by 89,500 tons of CO2, the equivalent of taking my hands were so expensive to keep public buildings warm but new about 19,000 modern vehicles off the roads for a year. cold and I could not boilers and a restored Directly Benefiting the Poor write easily,” said a heat distribution network have increased energy and Vulnerable The project helps about 40,000 Moldovan schoolgirl. efficiency and reduced fuel rural poor across Moldova. In the consumption, helping public countryside, the health of children, teachers, medical staff, patients, entities save 30 to 40 percent and boiler operators has improved. on energy costs for heating. Warmer public buildings during the winter means, for example, that Moldova has installed 317 efficient schools can now have longer teaching boilers in public buildings such as days and students can focus better in schools, hospitals, and community class. centers. Before, the buildings were heated using inefficient and outdated Before, only some hospital rooms coal, mazut, or wood boilers, using a were heated and patients were deteriorated heat distribution network crowded into a few rooms to save dating back to Soviet times. on energy. Nowadays, even such simple things as affordable hot water The more reliable and efficient during the colder months is helping heating technology adopted has to improve hygiene, as more people three direct benefits: (i) it lengthens wash their hands. the period that public buildings are heated (from 90 to 190 days per Experience Can Promote Additional year), (ii) it raises room temperatures Climate Change Policies from 13° to 18° Celsius, and (iii) it Finally, the project has helped reduces smoke, compared with the position Moldova as it prepares old coal boilers. But, perhaps most to implement its national climate significantly, it also contributes to plan. Working with the WBG, the energy savings and lowers GHG country has built its MRV capacity to emissions. The government’s goal “We had to change shifts frequently before to load coal was to increase the overall heating track carbon credits and raise climate change awareness at the policy, efficiency by up to 90 percent. into the boiler. Our lungs could only take 30 minutes of institutional, and local levels. This gives it valuable experience that will be thick smoke at a time. Now I am trained, and operate a The project is the first in the useful as it moves ahead to address country to earn certified carbon programmable boiler in a smoke-free and comfortable credits, which are sold to the CDCF. climate change on a national level. room. Life has changed,” said an operator. 40 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 41 WHO WE ARE ACKNOWLEDGMENTS Managing Editor Isabel Hagbrink Production Editor Maria Ekman Copy Editor Inge Pakulski Design Corporate Visions, Inc. Printer World Bank Group Photos courtesy of World Bank Group photo collection, Nina Doetinchem, Palghat Krishnan Balasankari, Sandrine Boukerche, and Xiaoyu Chang. Stock photography was used on the following pages: Cover and pages 2, 4, 6, 8, 12, 17, 20, and 30. 42 l CARBON FINANCE 2015 ANNUAL REPORT CARBON FINANCE 2015 ANNUAL REPORT l 43 1818 H Street, NW Washington, DC 20433 www.worldbank.org/climatefinance