A $500 million initiative has been launched by Germany, Norway, Sweden, and Switzerland to cut greenhouse gas emissions in developing countries.
Unveiled at the COP21 Paris climate talks this week, the Transformative Carbon Asset Facility is designed to help developing countries to create new classes of carbon assets associated with reduced greenhouse gas emission reductions, including those achieved through policy actions.
The facility, set up with assistance from the World Bank, will measure and pay for emission cuts in large scale programs in areas like renewable energy, transport, energy efficiency, solid waste management and low carbon cities.
It could make payments for emission reductions to countries that remove fossil fuel subsidies or embark on other reforms like simplifying regulations for renewable energy.
Jim Yong Kim, president of the World Bank Group, said:“We want to help developing countries find a credible pathway toward low carbon development. This initiative is one such way because it will help countries create and pay for the next generation of carbon credits.”
This new initiative is planned to start operations in 2016 with an initial expected commitment of more than $250 million from contributing countries. The facility will remain open for additional contributions until a target of $500 million is reached. It is expected that the new facility’s support will be provided alongside $2 billion of investment and policy-related lending by the World Bank Group and other sources.
Erna Solberg, prime minister of Norway, said: “Putting market forces to work is an efficient way of reducing emissions.”
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