File photo of the World Bank - Reuters
The new fund was announced in tandem with the 2022 UN Climate Change Conference (COP27) being held in the Red Sea city of Sharm El-Sheikh through 18 November.
The Scaling Climate Action by Lowering Emissions (SCALE) partnership will provide grants for verifiable emissions reductions and expand the funding sources for global public goods, according to the WBG.
“Climate finance needs major new mechanisms that pool funding from the global community to accomplish actual reductions in greenhouse gas emissions across the developing world. SCALE offers a key non-fragmented avenue for the global community to take action on climate change,” said WBG President David Malpass.
Malpass added that the verifiable emission reductions created by SCALE and similar mechanisms will also be an important step toward building effective carbon credit markets.
SCALE will deploy results-based climate finance where countries receive grant payments for achieving pre-agreed, verifiable results, drawing on twenty years of WBG experience in this area.
It will also support countries to build a track record of generating emission reductions from impactful programs and policies that they can apply toward their national emission reduction targets, as well as yielding excess credits that can be offered in carbon markets with the potential to unlock additional private sector funding.
Such a mechanism will also pool public and private resources to channel additional funding to middle and low-income countries’ emission reduction programmes, help bridge the gap between the supply of and demand for high-quality emission reduction credits by supporting large-scale climate investments and help countries develop high integrity credits and enhance their access to international carbon markets.
Social inclusion is embedded in the design of all SCALE programs. An associated fund within the SCALE umbrella – Enabling Access to Benefits while Lowering Emissions (EnABLE) – enhances the inclusion of marginalised communities and indigenous peoples in programs under the partnership through specially designed benefit sharing arrangements, according to the WBG.