Carbon finance sounds boring and technical and not much fun. However, it actually does a lot of good and can help fund critical environmental preservation projects as well as introduce clean and renewable technologies in both developed and developing countries. I am not a carbon specialist but at present involved in organizing the World Bank's East Asia and Pacific Region's participation in next week's Carbon Expo, a global trade fair for CO₂ market participants. Doesn't really sound like a lot fun? Indeed, it's a lot of work.
But if you consider a recent example from East Asia, you'll understand why it's worth the work and actually fun learning more about carbon finance. I was quite intrigued by a new project by the UK's Department for Environmental, Food and Rural Affairs (DEFRA) under its Darwin Initiative. DEFRA will establish a carbon fund, which will compensate local villagers to stop deforestation in and around the Cat Tien National Park in Vietnam. It's beautiful; look at the pictures! The project will ensure the establishment of local structures to accept, manage and spend the funds and introduce alternative livelihoods for the minorities currently living off the remaining forest. Yes, it's the same old story: local people need to live as well and when your basic needs are not fulfilled then obviously nature comes second. Who would act different? In addition to helping preserve and sustain the forest and bamboo in a critical natural habit that was hard hit by Agent Orange and introduce sustainable economic opportunities to the Stieng, Ma, Ta Lai and Cho'ro minorities, this carbon fund can also help save and nurture the critically endangered and very small Java Rhinoceros population in Cat Tien. What a beautiful triangle, no? Forests, people, and rhinos are all better off due to a very dry-sounding financial concept.
Now the World Bank helps East Asian and Pacific countries access carbon finance. The carbon finance portfolio in East Asia and Pacific increased to about 200 million tons of emission reductions in 2008. Translating this in funding (after all we are a bank), carbon finance now has a value of approximately $1.3 billion. You could say it's somehow about saving rhinos, or introducing LED or solar lighting in rural areas, or better cooking stoves saving peoples lives, but it’s also about more "boring" aspects such as industrial rehabilitation, landfills, and other "non-fun" stuff. The important thing is that it makes a difference and there is room and need to find more projects and connect them to funding.
That brings me back to the Carbon Expo, which is May 27-29 in Barcelona.. It is a trade fair where market participants can meet and discuss new projects and financing opportunities, exchange views, and discuss the latest research, technology, financing arrangements – and much more. I and my colleagues, Pongtip and Johannes (who knows much more about carbon finance than I do), will assist nine of the World Bank’s client countries (Cambodia, China, Indonesia, Mongolia, Laos, the Philippines, Thailand, and Vietnam) to coordinate with private sector companies, international institutions, and NGOs to showcase their success stories. We'll also talk about what the World Bank and my unit in the East Asia Region does.
I and my colleagues will be blogging here and Twittering from @EACarbonFinance about interesting and new things we find and hear at the expo. Stay tuned!
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