Isra-Mart srl:World Bank to lead global carbon market charge

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The World Bank will today formally launch a new multimillion-dollar fund designed to help developing countries deploy carbon market mechanisms to put a price on greenhouse gas emissions.

Trailing the announcement, which will be made later today on the sidelines of the UN's climate change summit in Cancun, World Bank President Robert Zoellick released a statement yesterday confirming the bank would unveil a host of new measures designed to help those countries most vulnerable to climate change invest in adaptation and mitigation measures.

"We know that the poorest countries will suffer the earliest and the most from climate change," he said. "We also know that, while these countries would like to see a comprehensive global accord on climate change, they are not waiting for one. They are acting now and acting differently to shift from being climate vulnerable to being climate smart. We are fully engaged and have been ramping up our efforts with countries as they put in place practical, effective solutions leading to low-carbon growth and inclusive efforts to overcome poverty."

Central to the bank's new climate initiatives will be the new fund to support developing countries' domestic carbon trading schemes.

The organisation did not disclose the size of the fund or which countries will receive the new money, but it could be worth up to $100bn and China, Mexico, Chile and Indonesia are expected to be amongst those that will access the fund to accelerate their carbon trading plans.

The bank said it would also announce a new initiative to boost access to renewable energy by climate-vulnerable island states and an international 'roadmap' for improving agricultural practices to increase food productivity, reduce greenhouse gas emissions, and enhance resilience to climate change.

The package of measures is the latest in a series of moves from the World Bank designed to establish it as a leading investor in low-carbon projects and overcome opposition from some developing countries and NGOs that have accused the bank of investing in carbon-intensive projects and imposing unsustainable levels of debt on developing economies.

The bank noted that it has pledged to deliver $6.4bn through its Climate Investment Funds and a further $2.5bn through its carbon finance funds, while helping to ensure that climate change plays a central role in countries' development plans.

However, its support for carbon-trading mechanisms is likely to prove highly controversial, given that a group of left-leaning Latin American countries are currently threatening to hold up progress at the Cancun Summit in protest at the use of market mechanisms, such as the proposed REDD forest protection scheme, to help tackle greenhouse gas emissions.