Contacts: Sustainable Development – Sergio Jellinek +1-202-458-2841 Sjellinek@worldbank.org Kristyn Schrader +1-202-458-2736 Kschrader@worldbank.org Infrastructure – Roger Morier +1-202-473-5675 Rmorier@worldbank.org WASHINGTON, April 23, 2006—The global community needs to be working towards meeting the energy needs that are essential for economic growth and fighting poverty, while at the same time leaving a smaller environmental footprint, according to the Clean Energy and Development: Towards an Investment Framework, a new report launched today on the occasion of the Spring Meetings of the World Bank/International Monetary Fund. “The decisions countries make today on energy policies and technology,” said World Bank President Paul Wolfowitz, “will have long-term consequences for the sustainability of growth and for the health of our environment. The World Bank Group is working with the international community to see how all of us can tackle these issues more effectively, at a larger scale, and with innovative solutions.” Developing and transition countries over the next 25 years will require investments of around $300 billion a year. The report argues that policy reforms are needed, such as removing broad-based subsidies, while targeting the poor who need income support, and strengthening legal and regulatory frameworks. In addition to these investments, the report concludes that moving towards a global lower carbon economy will require an incremental global annual cost of several tens of billions of dollars per year – less than $10 billion to more than $100 billion per year, depending on the greenhouse gas stabilization target, the pathway to stabilization, and the underlying development pathway of a country. According to the report, the costs for developing countries to adapt to projected climate change are likely to lie in the $10 billion to $40 billion per year range, of which about a third is associated with public finance. Discussed today by the Development Committee, the Framework – a joint effort by the World Bank and other International Financial Institutions and Development Banks – was prepared as a follow-up to the G-8 Gleneagles Summit’s Communiqué and Plan of Action for Climate Change. The Framework covers three interdependent issues: - the investments needed in order to meet modern energy needs of developing countries over the long-term that, at the same time, pays attention to efficiency and local environmental considerations;
- the additional steps required in energy, transport, and industrial sectors to mitigate the effects of climate change by reducing greenhouse gases; and
- what developing countries need to do to adapt to the impacts of climate change and weather variability.
Three sources of funding for mitigating greenhouse gas emissions are available, according to the document: (i) voluntary actions; (ii) international grants; and (iii) trade. Trade is likely to confer the biggest flow of funds ($20-120 billion per year), but will require a long-term, stable, and predictable framework and regulatory system. The report recognizes the principle of common but differentiated responsibilities agreed to by the UN Climate Convention in addressing climate change. The Framework outlines a two-track approach: - To review existing financial instruments and explore the potential value of new ones. This will complement ongoing Bank Group activities in energy sector reform, energy access, developing the carbon market, and developing and applying methodologies to address climate variability and change.
- A second track of activities, to be developed over the next two years, would i) generate new knowledge on technology options, and evaluate the environmental, social, and economic impacts of climate change, and ii) propose programs of action for selected countries including, as relevant, assessing and addressing any transitional costs.
At the same time, a broad outreach program would seek to facilitate dialogue and broad engagement among key stakeholders, including, civil society, the private sector, and legislators. Facts and Figures – Clean Energy & Development 2/3 of the increase in world energy demand over the next 25 years will come from developing countries 1.6 billion people, mostly living in Africa and South Asia, still have no access to electricity nearly 2.4 billion people use traditional biomass fuels – wood, agricultural residues, and dung – for cooking and heating four out of five people without access to electricity live in rural areas poor countries consume just five percent of the modern energy services consumed by OECD countries
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# # # For a copy of the full report, please see the website: Clean Energy and Development |
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