Climate Investment Funds

The Climate Investment Funds (CIFs) were designed by developed and developing countries and are implemented with the multilateral development banks (MDBs) to bridge the financing and learning gap between now and the next international climate change agreement. CIFs are two distinct funds: the Clean Technology Fund and the Strategic Climate Fund.^[1]

The CIFs are additional to existing Official Development Assistance (ODA) and aim to enable countries to continue on their development path and achieve the Millennium Development Goals. These funds will be operated in close coordination with existing bilateral and multilateral efforts, in particular the Global Environment Facility (GEF) and the Adaptation Fund.

The funds were approved by the World Bank Board of Directors in July 2008 and on September 26, 2008 received pledges of over US$6 billion.

Clean Technology Fund

The Clean Technology Fund (CTF) promotes scaled-up financing for demonstration, deployment and transfer of low carbon technologies with a significant potential for long-term greenhouse gas emissions savings. Innovation and deployment of clean technologies at scale will be central to success.^[2]

Investments are planned for renewable energy and highly efficient technologies to reduce carbon intensity, for the transport sector, to address both efficiency and to promote modal shifts, and for energy efficiency in buildings, industry and agriculture.

The World Bank is the Trustee of the CIFs, which include a "sunset clause" to ensure that the Fund's activities do not prejudice the outcome on the UNFCCC negotiations.

Solar thermal power provides a useful illustration because it shows promise as a renewable option for baseload power. A recent study indicates that under a carbon pricing scheme with charges consistent with the low-end of requirements for safe atmospheric carbon loading, public financing through the CTF Fund could close the cost gap between solar thermal and coal-fired power in a 5 to 10 year program that expands capacity at 500-1000 MW/year. Total Clean Technology Fund subsidies for this program would be $4 – $8 billion – easily within range for a serious multilateral effort.^[3]

Strategic Climate Fund

The Strategic Climate Fund (SCF) will comprise targeted programs with dedicated funding to provide financing to pilot new approaches with potential for scaling up. It will help more vulnerable countries adapt their development programs to confront the impacts of climate change ensuring climate resilience and a program to take action to prevent deforestation is under design. It will also enable discussions between donors and recipient countries about climate related investment and encourage support from a wide range of bilateral donors, private sector and civil society stakeholders.^[4]

The Pilot Program for Climate Resilience (PPCR) is the first program under the Strategic Climate Fund. It seeks to explore practical ways to mainstream climate resilience into core development planning and budgeting that is consistent with poverty reduction and sustainable development goals. The PPCR will build on National Adaptation Programs of Action (NAPAs) and other national strategies and work in 11 pilot countries and regions.^[5] It is strategically aligned with, and maintains strong links to, the Adaptation Fund established under the Kyoto Protocol.

Other programs under design are the Forest Investment Program and the Program for Scaling up Renewable Energy in Low Income Countries.

See also

• International Renewable Energy Agency
• Investment in renewable energy

References

1. ^ CLIMATE-L.ORG: G8 Finance Ministers Support Climate Investment Funds
2. ^ http://siteresources.worldbank.org/INTCC/Resources/World_Bank_Climate_Investment_Funds_(CIF).pdf
3. ^ Center for Global Development : Publications: Crossroads at Mmamabula: Will the World Bank Choose the Clean Energy Path? - Working Paper 140
4. ^ http://www.mof.go.jp/english/if/su080614a.pdf
5. ^ http://siteresources.worldbank.org/INTCC/Resources/World_Bank_Climate_Investment_Funds_(CIF).pdf

External links

• Climate Funds Update - Information on international funding initiatives to tackle climate change
• Proposed Climate Investment Funds (CIF) (World Bank).
• G-8 Finance Ministers’ Statement on the Climate Investment Funds
• Examining the Administration’s Proposal to Establish a Multilateral Clean Technology Fund (Subcommittee on Domestic and International Monetary Policy, Trade, and Technology Hearing).
• CGDEV Statement Before The Subcommittee.
• World Bank Approves Climate Funds Before G8 Summit.
• Environment Matters.