Climate Investment Fund

Ads

Climate Investment Funds

The Climate Investment Funds (CIFs) are a collaborative effort among the Multilateral Development Banks (MDBs) and countries to bridge the financing and learning gap between now and a post-2012 global climate change agreement. CIFs are two distinct funds: the Clean Technology Fund and the Strategic Climate Fund .

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

The funds are to be formally created by the World Bank Board of Directors in July 2008.

Clean Technology Fund

The Clean Technology Fund (CTF) will accelerate transformation to low carbon growth paths through cost-effective mitigation of greenhouse gas emissions. Innovation and deployment of clean technologies at scale will be central to success.

It is focused on making renewable energy cost-competitive with coal-fired power as quickly as possible.

The World Bank has been assigned temporary management responsibility of it but this may not continue after UN's Copenhagen climate change conference in December, 2009, due to its continued heavy investment in coal-fired power plants, as well as its proposal to use the Clean Technology Fund as an additional source of money for business as usual.

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 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.

Strategic Climate Fund

The Strategic Climate Fund (CSF) 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 the impacts of climate change ensuring climate resilience and will take action to prevent deforestation. It will also enable discussions between donors and recipient countries about climate related investment and encourage support from a range of bilateral donors, private sector and civil society contributors

The Pilot Program for Climate Resilience would be the first program under the Strategic Climate Fund. It would explore practical ways to mainstream climate resilience into core development planning and budgeting, building on National Adaptation Programs of Action (NAPAs). It would be strategically aligned with, and maintain strong links to, the Adaptation Fund established under the Kyoto Protocol.

The Fund also includes the Forest Investment Programme.