Key Themes: Mitigation, Vulnerability and Adaptation, and Capacity Building

To provide a strategic focus to the Bank's work on the energy-environment nexus and to consolidate the gains of the decade long association with GEF, in July 1999, the Bank's Executive Directors approved Fuel for Thought (FFT), an environment strategy for the energy sector. The strategy highlights the importance of getting the policy fundamentals right and, in that context, explicitly recognizes the need for helping clients tackle global climate change by capturing win-win opportunities for improving energy efficiency and promoting distributed and off-grid electricity supply in rural areas, using clean technologies and fuels. In addition, the strategy recognizes that there are valuable opportunities beyond win-win interventions to combat regional and global problems and calls for incorporating these opportunities in Bank programs to promote sustainable development and reduce the marginal cost of GHG mitigation through the use of external resources - particularly those of the GEF, or the PCF and the private sector resources, stimulated by the Kyoto Mechanism. While there can be tradeoffs between local and global environmental benefits, one of the Bank's key goals will be to identify and support GHG reduction when it is an ancillary benefit of improving the quality of life and/or achieving other development objectives at the local/national level; thus, serving to initiate and consolidate low-carbon development paths.

Mitigation

The majority of the Bank’s activities in GHG mitigation are co-financed by the Global Environment Facility (GEF)., and as experience with these projects grows, and the costs of some clean technologies declines, such projects are increasingly being mainstreamed into Bank operations. The challenge is to balance local and global environmental impacts related to energy while addressing the priority development needs of the countries. The World Bank assists its client in mitigating GHG’s through:

Energy sector reform and restructuring to improve supply and demand-side efficiency and help create a level playing field for renewables
Energy efficiency improvements and fuel switching to reduce urban and indoor air pollution and while scaling back GHG emissions.
Improving access to modern energy in rural or remote locations through renewable energy technologies (for household lighting, water pumping, grain processing, small cottage industry, health clinics, and education)
Reducing energy intensity in other sectors such as transport, agriculture, forestry, and urban development through the use of integrated planning tools and more efficient technologies

Cultivation of experience with these approaches and technologies provide a basis for attracting future financing flows under the Clean Development Mechanism (CDM).

Vulnerability and Adaptation

    Experience over the past two decades suggests that vulnerability to extreme weather events (floods, droughts, storm surges, etc.) has increased markedly, in part due to rapid growth of population and the process of development itself. Climate change will exacerbate this trend, with loss of life and displacement, disruption of agriculture, and destruction of natural, social and physical capital all increasing, with the losses most acute in the poorest countries. The Bank will focus on reducing present day climate vulnerability through the implementation of "no regrets" measures and closer coordination with its Disaster Mitigation Unit. The Bank is currently in the process of developing a Vulnerability and Adaptation Facility to perform vulnerability assessments, assist regional institutions in forecasting impacts, elevate awareness of long term consequences, and mobilize additional financing for responding to climate vulnerability challenges.

    Additional links:
    Come Hell or High Water
    Climate Forecasting for Development

    Capacity Building
      The climate change agenda is relatively new and evolving. As a result, generation and dissemination of relevant knowledge, through analytical work to plan, prepare and implement GHG mitigation measures and to manage climate change more generally, is the critical first step in capacity building. As in the recent past, the Bank will continue to focus its support on providing hands-on experience with: methodological, technical and investment work to clarify how market mechanisms can benefit our clients; developing national policies to identify potential investment for possible future international cooperation; evaluating options for reducing GHG emissions through sectoral planning; and upstream work in investment planning to identify options for mitigating the negative local, regional and global environmental impacts of energy development. The scope of support is already linked closely to GHG mitigation projects, and is now being expanded to include additional efforts in vulnerability and adaptation.

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