Global: World Bank to Launch a New Fund for Pooling Emissions Reduction Grants
The World Bank is launching the Scaling Climate Action by Lowering Emissions (“SCALE”) fund, a new hub for all results-based climate financing programs it administers. Results-based climate finance incentivizes green initiatives by funding projects aimed at achieving specific climate targets, focusing in particular on reducing carbon emissions. SCALE will replace the Climate Emission Reductions Facility, the World Bank’s first trust fund for low-carbon development projects, and aims to be a “one-stop shop” for climate programs.
SCALE will mobilize capital from the private sector, donor countries, and foundations. Supporting countries will be able to use SCALE-backed projects toward their respective nationally determined contributions under the Paris Agreement (i.e., plans to cut emissions and adapt to the impacts of climate change). SCALE seeks to raise $1 billion in funding by the end of 2023. According to the World Bank’s estimation, this fundraising would provide an average of $50 million in grants per project, aimed at the programs most effectively reducing greenhouse gas emissions.
Supported programs cover three main areas:
- Natural Climate Solutions, such as changes in land use that would maximize carbon sequestration or emissions reduction in the agriculture sector;
- Sustainable Infrastructure Solutions, including decarbonization of the power sector, industrial emissions reduction plans, improved efficiency in waste management, and the maintenance of water supplies; and
- Fiscal and Financial Solutions, such as policy changes reforming fossil fuel subsidies, carbon taxes, and green bonds.
SCALE will launch at the COP27 summit next month.
U.S.: Biden Administration Starts Program to Improve Energy Infrastructure in Rural Areas
On October 12, 2022, the Biden Administration issued a request seeking public feedback on a $1 billion plan to improve energy generation in rural communities across the United States. The Energy Improvements in Rural or Remote Areas program (“ERA”) will increase access for communities that face higher energy costs and unreliable electricity due to low populations and lack of access to larger electrical grid systems. The U.S. Department of Energy’s Office of Clean Energy Demonstrations will head ERA.
The Bipartisan Infrastructure Law, passed in November 2021, will fund this program. More specifically, ERA will provide federal support for:
- improving the cost effectiveness and efficiency of energy systems;
- upgrading transmission and distribution lines;
- reducing greenhouse gas emissions;
- constructing and upgrading electricity generation facilities; and
- developing independent energy systems serving local areas (also known as microgrids).
Before accepting project proposals in 2023, the Department of Energy will host several workshops for communities affected and interested stakeholders to learn more about the types of projects that ERA could undertake. This initiative comprises part of the Biden Administration’s efforts to move the country toward a cleaner energy future.
Department of Energy Press Release
Request for information
Global: TCFD Releases Its Annual Status Report
This month, the Task Force on Climate-Related Financial Disclosures (the “TCFD”) has released its 2022 Status Report. The TCFD was created by the Financial Stability Board to promote transparency by recommending what information companies should disclose to assist investors and financial institutions in assessing climate-related risks. The TCFD has released climate-related financial disclosure recommendations since 2017. The fifth annual report of its kind, the 145-page 2022 Status Report, shares milestones and developments related to incorporating TCFD’s climate-related disclosure recommendations.
Highlights of the 2022 Status Report include:
- An increasing number of companies are now making TCFD-aligned disclosures through their financial filings or annual reports, though further progress is needed.
- The average level of such disclosure has increased significantly across Europe, the Asia-Pacific region, and North America.
- Over 60% of asset managers and 75% of asset owners now report climate-related information to their clients and beneficiaries through annual reports, sustainability and climate reports, or directly to clients.
- Since the launch of TCFD’s recommendations, investors find that climate-related financial information has become more available and of better quality.
- There is a general trend of increased reliance on climate-related disclosures in financial decision-making and the pricing of certain assets.
2022 Status Report
TCFD – About