World Bank creates fund to cut gas emissions in poor countries

The World Bank launched a new fund to help finance projects to reduce greenhouse-gas emissions in poor countries, with initial commitments of $ 35 mm from both public-and private-sector participants, including Japanese firms.
The Washington-based multilateral development bank plans to eventually expand the size of the fund to $ 100 mm. The Community Development Carbon Fund (CDCF) is intended to provide financial support to small-scale emission reduction projects in the least developed countries and poor communities in developing countries under the Clean Development Mechanism (CDM) of the 1997 Kyoto Protocol. The CDM allows carbon dioxide emissions saved by projects initiated by industrialized countries to be counted as emission credits.

Through the CDCF, poor communities will get financial support for their economic development, while participants in the fund will receive carbon emission reduction credits. The credits will be authorized as formal ones if the Kyoto Protocol comes into effect. So far, contributors to the fund include the governments of Canada, Italy and The Netherlands as well as four Japanese companies and German chemical giant BASF.
"Payments for environmental services through innovative funds like the community fund, open new possibilities for environmentally responsible development," World Bank Vice President for Sustainable Development Ian Johnson said. "We are demonstrating that dealing with global issues like climate change can have profound positive impact at the community level," he said.

In a related story, German chemical major BASF is to provide $ 2.5 mm to the World Bank's CDCF, a pilot project designed to test the mechanisms of the Kyoto Protocol, the company said.
Also, in one proposed project for the new World Bank fund, tea growers in Kenya would reduce their carbon dioxide emissions by switching from fuel oil to biomass fuels for tea drying. An estimated 80 mm litres of fuel oil would be replaced by wood fuel annually, cutting energy bills for growers and avoiding some 240,000 tons of carbon dioxide equivalent annually from being pumped into the atmosphere, the bank said.