The World Bank yesterday announced at the United Nations climate change talks Cancún in a new $100 million fund to support carbon trading initiatives in the developing world.
The Partnership for Market Readiness will support developing nations with financial and technical support for carbon market readiness initiatives, including domestic trading schemes and other market-based instruments.
Australia, the European Commission and the US pledged over $30 million in Cancún, on top of $5 million already pledged by Norway. Germany, Japan and the UK have also promised to contribute to the fund.
The initiative aims to raise $100 million by the time it becomes operational early next year.
“The fact that developing countries are looking for market-readiness support is testament to the drive for climate action at the national level – these countries are not waiting, they’re getting on with it as part of their development goals,” says World Bank president Robert B. Zoellick.
China, Chile, Indonesia and Mexico are already exploring the use of carbon market instruments and emissions trading to drive investment in low-carbon technologies. And indeed China already plans to join the partnership.
“China has launched low carbon economy pilots in five cities and eight provinces,” commented Mr. Xie, vice chair of the National Development and Reform Commission. “The Partnership for Market Readiness will provide timely support for the initiative."
However, environmental group Friends of the Earth has strongly criticised the move, warning that it will lock developing countries into a future dependent on polluting fossil fuels.
“It is deeply disturbing that the World Bank is promoting carbon markets in developing countries,” says campaigner Sarah-Jayne Clifton. “Carbon trading has already proved ineffective in cutting the emissions of rich countries – and nor will it provide the reliable source of funding developing countries need to grow cleanly.”
Instead, Friends of the Earth advocate a system of global feed-in tariffs for small-scale renewable energy projects, sharing of green technologies and a strategy for tackling deforestation.
For further information:
World Bank backs South African coal-fired power plant (12-Apr)
EU carbon market failing to drive low-carbon investment, says report (8-Feb)
World Bank increases renewables and energy efficiency financing to $3.3 billion (14-Sept 2009)
09 December 2010