Scaling up investment in climate change mitigation activities: interface with World Bank's carbon partnership facility

The case for scaling up mitigation efforts is urgent and has been made repeatedly in the last few years – heavy investment is needed in zero and low carbon technologies and systems. Carbon market policy instruments are expected to determine how fast the investments should be done. Current instruments need to evolve significantly in order to achieve the needed magnitude of scaling up mitigation. This document explores how scaling-up opportunities and adequate policies may ensure that carbon finance plays an effective role in the reduction of GHG emissions.

The document provides:

• a framework of what scaling-up means from diverse perspectives
• explores the policy and investment situation for scaling up current activities
• discusses the CDM PoA and other forms of finance and investment
• discusses new ideas for scaling-up that are emerging from the UNFCCC and post-2012 policy discussions
• gives an assessment of how the carbon finance sector may operate with the new ideas
  

The document provides the following key messages:

• bring new mechanism ideas forward through pilot programs by supporting countries to assess the opportunities for investment in specific sectors
  
• support specific policy instruments through implementation of programmatic CDM by developing methodology for identified program opportunities and evolution of sectoral crediting mechanisms
• be a conduit or facilitator for developing countries getting some of the ‘non carbon’ funds becoming available
• help countries with the needed capacity building “readiness” preparation if they are to achieve low carbon ‘scale’.
  

The document offers the following implications for developing country policy-makers:

• most of the necessary technologies have been already deployed; and completely new ones may not be available in the short-term
• a large portion of the mitigation potential is in the energy efficiency, industry and transport sectors which have some policy implications
• a big potential for mitigation actions is found in the developing world but these need to implement programmes combining policies with carbon and other types of finance mechanisms for scaling up to take effect
• different finance mechanisms should be applied to different sectors in different regions and times. However, the adequate policy mix and financial mechanisms for scaling up each technology and system is essential.