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Developing Countries: Climate Change

Volume 461: debated on Tuesday 12 June 2007

To ask the Secretary of State for International Development what steps his Department is taking ahead of the forthcoming G8 meeting to ensure that consideration of the effect of climate change on the world's poorest nations is integrated into the World Bank energy policy. (140628)

Climate change is likely to have the greatest impact on the poor, with Africa being particularly vulnerable, even though it has not caused the problem. A high priority for DFID is to work with our international partners, including the World Bank, to help reduce man-made climate change as well as help developing countries adapt to some of the inevitable impacts.

At the Gleneagles summit in 2005, the UK secured G8 agreement that the World Bank should lead on establishing a new Clean Energy for Development Investment Framework (CEIF) that would operate across the international financing system. The aim of this framework is to accelerate and catalyse public and private sector investments in cleaner energy in developing countries.

The CEIF has three main parts: improving access to energy, especially in Africa; promoting transitions to low-carbon energy, especially in large emerging economies; and helping countries adapt to climate variability and change.

The first phase of this work is under way with the World Bank and regional development banks, like the European Bank for Reconstruction and Development and the Inter-American and Asian Development Banks. They are developing work programmes to help their borrowers tackle climate change. Each bank is tailoring its approaches and initiatives to the conditions and challenges of its region and its specific experience and comparative advantage. The World Bank is continuing to work on exploring financial options to support clean energy investments.

The second phase in implementing the World Bank Action Plan for the CEIF will be reported at the G8 Summit in 2008, to be hosted by Japan. The World Bank has already increased its commitments and resources for clean energy investments. A recent World Bank report shows that in 2006 the Bank increased the financing of renewable energy and energy efficiency projects by 45 per cent., to a total of $668 million, exceeding the 20 per cent. annual increase target set in 2004.

We are also working with the World Bank on the adaptation part of the CEIF. For instance, future climate change may affect rainfall patterns, which in turn could directly affect electricity generation from hydropower schemes, so the work involves climate change risk screening. The aim is to make sure that investments, including those in the energy sector, take full account of the potential future impact of climate change and establish what it will cost to adapt.

We are looking for a range of G8 outcomes on energy and climate change this year. This includes an invitation to the World Bank to undertake pilot schemes to reduce emissions from deforestation in developing countries. On this, the World Bank is developing a proposal for a Forest Carbon Partnership Facility (FCPF) to provide support for pilot schemes in developing countries. This follows on from pilot studies to determine low-carbon opportunities in middle-income countries.

Both the 2005 Gleneagles Plan of Action and the 2006 St. Petersburg Summit endorsed the need to improve energy efficiency. We would like to see faster implementation of energy-efficiency options and are working towards agreement on this at the G8 in Germany this year.