The majority of the Bank's activities in Greenhouse Gas (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 in the following areas:
- Renewable energy is often the least-cost option for providing electricity and other energy forms in rural areas. Improving energy access for household lighting, water pumping, grain processing, small cottage industry, rural health centers, and schools yields direct economic social benefits to rural residents. It also results in improved indoor air quality when it replaces traditional biomass fuels.
- Management reforms, energy efficiency improvements, and fuel switching for municipal heating systems (in northern climates) can benefit the urban poor economically and reduce urban and indoor air pollution while improving thermal efficiency and reducing greenhouse gas emissions.
- In developing countries, the transport sector is responsible for a significant and generally growing share of energy consumption and urban air pollution. Measures to reduce energy intensity in this sector - such as land-use planning, traffic management, promotion of nonmotorized transport, and more efficient technologies - can have human health and livelihood benefits, especially to the poor, in addition to reducing greenhouse gas emissions.
- Forest regeneration through community participation can offer substantial economic benefits to millions of poor households, while increasing forest cover, sequestering carbon, and reducing pressures on natural forests.
Cultivation of experience with these approaches and technologies provide a basis for attracting future financing flows under the Clean Development Mechanism (CDM).