World Bank's Climate Change Actions in EAP Region Jiang Ru March 11, 2009 Hanoi Sub-Regional Workshop for Asian GEF Focal Points

Development and Climate Change A Strategic Framework Approved by WB Board and Development Committee Guide and support response of WBG to development challenges posed by climate change As part of core development efforts, effective response to climate change must combine: Mitigation of global GHG emissions—to avoid the unmanageable Adaptation at regional, national and local levels— to manage the unavoidable 2

Actions Proposed Step-up policy research in both adaptation and low carbon growth Support acceleration of new technology Pioneer innovative market mechanisms Create an enabling environment to tap private sector resources Address the resource gap through existing and new instruments for concessional finance 3

Mid-term report on SFDCC implementation (2009) Policy mainstreaming: >60 % of CASs FY09 address climate change Lending mainstreaming: >40% WBG projects FY09 contain climate actions Strong increase lending to renewables and energy efficiency New financing instruments rolled out Major AAA on climate change, including World Development Report (WDR) Improved partnerships and communication 4

5 EAP contains emitters of global significance Tons CO 2 per capita

6 EAP countries are among the most affected by climate-related threats DroughtsFloodsStormsSea Level rise MalawiBangladeshPhilippinesAll low-lying Island States EthiopiaChinaBangladeshVietnam ZimbabweIndiaMadagascarEgypt IndiaCambodiaViet NamTunisia Mozambique MoldovaIndonesia NigerLaosMongoliaMauritania PakistanHaitiChina EritreaSri LankaSamoaMexico SudanThailandTongaMyanmar ChadViet NamChinaBangladesh KenyaBeninHondurasSenegal IranRwandaFijiLibya Note: The typology is based on both absolute effects (e.g., total number of people affected) and relative effects (e.g., number affected as a share of GDP). Source: World Bank Environment Department

7 EAP Strategy for Delivering Screening Include climate analysis in Bank AAA / CAS to identify large scale, long-term mitigation opportunities Consider carbon option in all projects under preparation Financing Create synergies and fill funding gaps by blending financial instruments (FCPF/CPF, GEF, CIF, IBRD/IDA) Develop new “climate loans” for financing and risk management. Capacity Support clients’ work on GHG mitigation: analysis and framework for client execution of programs

Analysis of Opportunities and Risks EAP: Energy Flagship Study ID: Low-carbon growth study and TA on REDD methodology development and forest governance PH and VN climate change strategy (incl. adaptation) Climate Resilient Cities: A Primer on Reducing Vulnerabilities to Disasters Climate Change Impact and Adaptation Study for the Bangkok Metropolitan Regions East Asia Environment Monitor 2007: Adapting to Climate Change 8

9 Where We Are Now? EAP CC Mitigation Portfolio in FY09 ~$600m active EAP lending portfolio* (IBRD/IDA), representing 40% of the Bank’s climate change portfolio with emphasis on energy efficiency and renewable energy Indonesia $300m CC DPL under preparation $101 m active GEF portfolio with emphasis on energy efficiency, renewable, clean technologies, more recently urban transport *CC lending portfolio: data from Business Warehouse, it includes all the projects that have climate change in the title and/or as one of operation themes Source: Business Warehouse, Active Portfolio, FY99-FY09

Additional Mitigation Financing in EAP CTF Investment plans endorsed (under CIF established in July 2008) Philippines with $75m for RE and $50m for urban transport Thailand with $150 m for clean energy and $70m for urban transformation Vietnam with $30m for grid investment CTF Investment plans under preparation:  Indonesia (expected in FY10Q3) Carbon Finance About $1.4b & 60% of Bank share Kyoto funds now phasing out CPF to be operational, VN (hydro) CN (IGCC, biogas), ID (geothermal) FPCF started with Readiness Fund 7 selected (IN, Lao, VN, Vanuatu moving) 10

11 Examples for Strategic Mitigation Programs Renewable energy development would meet future energy demand and help transform the power sector’s GHG emissions trajectory.  Geothermal in ID, PH, hydro in VN, offshore wind in CN Public transport and integration of work and living space would frame future transportation and production choices, putting transport-related emissions on a lower carbon trajectory while reducing air pollution.  EcoCities in CN, Urban Transport in TH (Bangkok) Promotion of energy efficiency would lift private and public investments in EE and reduce future energy demand and associated emissions.  Rural / provincial EE program in CN. Use of waste biomass and better manure management in the agro- industry would reduce GHG emissions and reduce pollution.  Livestock biogas energy program in CN. Saving remaining rainforests and providing economic alternatives would eliminate large streams of GHG emissions while protecting biodiversity.  REDD readiness plans in VN, Lao PDR, ID.

12 Adaptation Financing in EAP GEF SCCF: China and Philippines LDCF: Pacific Islands (Kiribati, Solomon Islands) Adaptation Fund (to be operational) The Global Facility for Disaster Reduction and recovery Funds disaster risk assessments, mitigation policies and strategies, prevention preparation and recovery projects at global, regional and country levels Strategic Climate Fund under CIF Pilot Program for Climate Resilience (PPCR): Pilot and demonstrate approaches for integration of climate risk and resilience into development policies and planning Cambodia: joint donor mission Oct. 2009, CC policy implementation expected from June Identification of investments to follow Samoa: scoping mission in Dec and joint donor mission in April Forest Investment Program (FIP) supports REDD. Subject to decision on March 17, Investment Strategies will be prepared in IN, PH, Lao.

13 Examples of EAP Adaptation Activities The Economics of Adaptation (VN case study), social welfare CC study in VN (GFDRR), vulnerability of the poor in VN Urban sector: i. Coastal city study – to be used as a model for scaling up ii. CRC and Local Resilience Action Plan implementation in cities in VN, PH, TH and CN iii. CC focus in CDS in the PH DRM: disaster management mitigation programs in ID, PH, VN and linkages with Adaptation programs Two SCCF operations in CN (agricultural adptation) and PH (CC adaptation pilot and integration into economic and operational planning)

Bank Lending as a Platform for Climate Financing Strenghtening development outcomes by integrating climate finance Source: IDA and Climate Change: Progress Report, octobre

Source: Richard Hosier “GEF support to Climate Change” Climate Finance Workshop (July 2009) Year (-) (+) GEF CF CTF Cash FlowCash Flow Mitigation Project— with climate financing to: Condition Markets, Transform Markets, Enhance Revenues …by reducing barriers, internalizing carbon, buying down cost. …by reducing barriers, internalizing carbon, buying down cost. Complimentary Use of Financing Mechanisms to Accelerate Low-carbon Investment 15

World Development Report 2010 A climate-smart world within reach if we… Act now: to stay close to a 2° C warming target Act together: for fairness and cost-efficiency, starting with the high-income countries taking aggressive action Act differently: a transformation needed to reduce emissions 50-80% in the next decades 16

Thanks! Additional info:

Where to find Displayed Publications Climate Change Impact and Adaptation Study for the Bangkok Metropolitan Regions East Asia Environment Monitor 2007: Adapting to Climate Change Convenient solutions to an inconvenient truth : ecosystem- based approaches to climate change Climate Resilient Cities: A Primer on Reducing Vulnerabilities to Disasters / Natural solutions : protected areas helping people cope with climate change

Additional Slides on Related CC Financing Mechanisms at the Bank

Partnership Forum Clean Technology Fund (CTF) Finance scaled-up demonstration, deployment and transfer of low carbon technologies with significant potential for long-term GHG savings $5 billion (mostly concessional finance) Strategic Climate Fund (SCF) Targeted programs with dedicated funding to pilot new approaches with potential for scaling up Pilot Program for Climate Resilience Mainstream climate resilience into core development planning Forest Investment Program Reduce emissions from deforestation and forest degradation Scaling Up Renewable Energy in Low Income Countries Transformational change to use of renewable energy $1 billion (under design) Supports countries’ development strategies and low-carbon programs Leverages financial products of International Financial Institutions Stimulates private sector engagement Climate Investment Funds (CIF) A collaboration between donors, World Bank and regional development banks to support a transformation towards low-carbon development Trust Fund Committee

Host Govern ments and Donors Sell ers Buy ers Carbon Asset Develop ment Fund Emission Reductions Programs Carbon Fund Grants to Sellers to prepare carbon assets Sellers propose and develop Emission Reductions delivered to the Carbon Fund Buyers provide funds and received emission reductions Participant s and partners provide funds Carbon Partnership Facility (CPF) Participants and partners work together to develop programs to achieve “larger scale and longer term” emission reductions

CPF – Objectives and Projects in EAP Scaling up of carbon finance through efforts that: integrate carbon into investment decisions early on work with client countries over a long period of time move to more programmatic and sector-wide approaches commit to long-term carbon purchases post-2012 Support transition to a low-carbon economy Examples in EAP –Vietnam: development small scale hydropower –Indonesia: scaling up of geothermal potential –China: support for IGCC pilot plants –China: energy from agricultural waste

23 Selection of REDD recipient countries Forest Carbon Partnership Facility (FCPF) Readiness Mechanism Funding for REDD Readiness (capacity building) ( ?): Reference Scenario National REDD Strategy National Monitoring System REDD = Reduced emissions from deforestation and degradation Carbon Finance Mechanism Payments for Emission Reductions (not necessary purchase) ( ?): Performance-based Verification, reporting Registration Carbon Fund: ~$200 million Participants Committee (10 recipients & 10 donors with same rights) Primary decision making body, including all policy issues Participants Committee (10 recipients & 10 donors with same rights) Primary decision making body, including all policy issues Readiness Fund: ~$150 mil. Observers (Indigenous People, NGOs, IGOs, privat sector) Participants Assembly (recipients & donors) Ad Hoc Technical Advisory Panels Buyer Participants Committee

Progress with the Forest Carbon Partnership Facility Papua New Guinea (PNG), Indonesia, Vietnam, Lao PDR, Cambodia, Thailand and Vanuatu Readiness Plan Idea Notes and have been selected as FCPF Participants Countries. Indonesia completed its Readiness Preparation Proposal (RPP) and is accessing a FCPF US$3.6million Grant for implementation. Lao has obtained the first US$200,000 grant to prepare the RPP Vietnam is in the process of obtaining the first US$200,000 Grant Vanuatu has started discussion Papua NG decided to move ahead with REDD without Bank support Thailand has not yet expressed interest in preparing an R-PP and has not yet signed its FCPF Participation Agreement. Cambodia receives support from UNREDD and has recently requested Bank support. 24

25 Pilot Program on Climate Resilience (PPCR) First active program under the Strategic Climate Fund Objective: Pilot approaches for integration of climate risk into development policies and planning Approximately $30m - $60m, 50% grants, 50% in optional co-financing available to each of 9 pilot countries and 2 regional groupings worldwide. EAP Pilots: Cambodia; Pacific Islands (Samoa, Tonga, PNG + small regional component)