The World Bank’s Board of Executive Directors endorsed a Carbon Finance Strategy that will give an edge to developing countries to participate in the growing carbon market, and will oversee the creation of an Umbrella Carbon Facility that will permit the purchase of carbon emission reductions on a larger scale.  Under flexible mechanisms of the Kyoto Protocol, industrialized countries with greenhouse gas (GHG) emissions reduction obligations can purchase some of those reductions in developing countries or in countries with economies in transition in exchange for clean technology and additional financing.

 

The Bank already administers eight carbon funds, including the Community Development Carbon Fund and the BioCarbon Fund, which assist poor countries and communities to benefit from carbon trade.   The new Umbrella Carbon Facility will pull together multiple sources of funding, including from the Bank’s existing carbon funds, to purchase very large volumes of carbon emissions from pre-identified projects on behalf of governments and private firms.   Under current pricing scenarios, some of these purchases could reach $200 to $600 million, particularly in East Asia, South Asia, and Latin America.

 

World Bank/Climate Change: New Carbon Finance Strategy Increases Opportunities For Developing Countries

 

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