World Bank Announces Greenhouse Gas Fund
The World Bank has set up a new fund to give grants to developing countries for projects that reduce greenhouse gas (GHG) emissions.
The new Scaling Climate Action by Lowering Emissions (SCALE) fund will collect money from all over the world and give grants to developing countries when they meet pre-agreed, verifiable goals for reducing GHG emissions.
SCALE will help countries make verified carbon credits that they can use to meet their national goals for reducing emissions. Any extra credits could be sold on carbon markets.
"The verifiable emission reductions created by SCALE and other similar mechanisms will also be an important step toward building effective carbon credit markets," said David Malpass, president of the World Bank.
The fund's initial goal is to raise $1 billion by the end of 2023, with an average of $50 million in results-based financing for each project. The medium-term ambition is to hit $5 billion in funding.
According to the World Bank, SCALE will help bridge the supply gap for high-quality emission reductions and access additional private sector finance from international carbon markets.
"The key recognition for the global community is the need to actually have projects and concepts that reduce greenhouse gas emissions," Malpass said at the Cop 27 UN climate summit. "That was the missing piece, and we're showing it to you today as part of this SCALE initiative."
Through natural climate solutions, sustainable infrastructure solutions, and fiscal and financial solutions, the fund will help reduce GHG emissions.
"It is my firm belief that the World Bank will have the role of managing the flow of capital from climate funds and other funds so that we can make the target," Vietnam's minister of natural resources and environment Tran Hong Ha said at Cop 27.