80481 A Report Prepared at the Request of the G8 June 2013 A Report Prepared at the Request of the G8 June 2013 © 2013 International Bank for Reconstruction and Development/The World Bank 1818 H Street NW Washington DC 20433, U.S.A. Telephone: 202-473-1000 Internet: www.worldbank.org This work is a product of the staff of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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Cover/Interior photos: Dreamstime contents List of Abbreviations and Acronyms iv Acknowledgments 1 Executive Summary 2 1 Introduction 6 1.1 Background 6 1.2 Objective 6 1.3 Structure of the Report 7 2 Scientific and Technical Context for Action on SLCPs 8 2.1 Development Benefits and Costs of SLCP Reduction 8 2.2 Short-Lived Climate Pollution and Global Warming 8 2.3 Measures to Reduce Short-Lived Climate Pollutants 10 2.4 Uncertainty of Climate Impacts 12 3 Nexus of SLCP Emissions and World Bank Activities 14 3.1 Methodology and Criteria for Portfolio Selection 14 3.2 Potential Opportunities to Address SLCP Emissions 16 4 Roadmap for SLCP Integration 24 4.1 Raising Awareness 24 4.2 Integrating SLCP Considerations in Decision Making 24 4.3 Addressing Data and Analytical Challenges 25 4.4 SLCPs, Low-carbon Development, and Green Growth 26 4.5 Harnessing HFC-related Opportunities 26 4.6 Expanding the SLCP Agenda 27 4.7 Stepping-up Action: Access to Finance 27 5 Conclusions 30 6 References 32 Annex 1: Development Benefits of SLCP Reduction 34 Key Short-lived Climate Pollutants, Their Primary Climate Effects, Annex 2:  35 and Estimates of Their Warming Potential Short-Lived Climate Pollutants—The East Asia and Pacific Example Annex 3:  37 GGFR Supports Oil and Gas Venting Reduction Projects Annex 4:  38 and Better Data Collection World Bank Municipal Solid Waste Management: Analysis of Annex 5:  40 Methane Reduction Opportunities and Nationwide Scale-up Activities to Enhance SLCP Reduction Opportunities Annex 6:  42 a report prepared at the request of the g8 iii Abbreviations and Acronyms AAA Analytic and Advisory Activities IEG Independent Evaluation Group AFR (Sub-Saharan) Africa IPCC Intergovernmental Panel on Climate Change BAU business as usual LAC Latin America and Caribbean BC black carbon LOSA Line-Of-Sight Attenuation BRT bus rapid transit LPG liquefied petroleum gas CCAC Climate and Clean Air Coalition MDB Multilateral Development Bank CFC chlorofluorocarbon MNA Middle East and North Africa CIF Climate Investment Funds MLF  Multilateral Fund for the Implementation of CO2 Carbon dioxide the Montreal Protocol CO2e Carbon dioxide equivalent MP Montreal Protocol CTF Clean Technology Fund MRT metro rail transit DPL/DPO Development Policy Lending/Operations MSW municipal solid waste EAP East Asia and Pacific MT metric tonnes EBRD  European Bank for Reconstruction and OC organic carbon Development ODS ozone depleting substances ECA Europe and Central Asia OORG Ozone Operations Research Group FIP Forest Investment Program PM particulate matter FY Fiscal Year PMR Partnership for Market Readiness GAA Global Agenda for Action PPCR Pilot Program for Climate Resilience GEF Global Environment Facility REDD  Reducing Emissions from Deforestation and GGFR Global Gas Flaring Reduction Forest Degradation GHG greenhouse gas SAR South Asia Region GWP global warming potential SLCP short-lived climate pollutants HDV heavy-duty vehicles SREP  Scaling Up Renewable Energy Program in HFC hydrofluorocarbons low income countries IBRD  International Bank for Reconstruction and TWC three-way catalysts Development USEPA U. S. Environmental Protection Agency IDA International Development Assistance iv vi INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Acknowledgments This work was led by Sameer Akbar of the Climate Policy from the Europe and Central Asia; Hocine Chalal from Team in the Climate Policy and Finance Department. The the Africa region. Furthermore, the team benefited from team included Jane Ebinger, Gary Kleiman, and Samuel interactions with Christopher Warner, Viraj Vithoontien, Oguah. Scott Cantor, Erika Jorgensen, and Kirk Hamilton. The team would like to acknowledge Marcus Lee, Farouk The team would like to acknowledge the support of the Banna, and Sintana Vergara for their contribution on following consultants and partners: Surabi Menon and Laura municipal solid waste management. Peter Dewees, Caroline Segafredo of the ClimateWorks Foundation for organizing Plante, Ademola Braimoh, and David Treguer coordinated analytic assistance; Rita Van Dingenen at the European contributions on forestry, livestock, and agriculture. Andreas Commission’s Joint Research Center for co-benefits Kopp provided input on the transport sector. Venkata quantification; and Sarah Hunter and the team at Oxford Ramana Putti, Masami Kojima, Vivien Foster, and Koffi Economics in the United Kingdom for macroeconomic Ekouevi provided inputs from the energy sector. Soma assessments of case studies; and Sudhir Ghota of Clean Air Ghosh coordinated inputs on urban waste water, and Jacob Asia for emissions modeling from transport projects. Burke provided inputs on irrigation. Karin Shepardson, Several helpful discussions with researchers who are actively Mary-Ellen Foley, and Laurent Granier contributed involved with the development of tools and methods for significantly to sections on hydrofluorocarbon (HFC) assessing the co-benefits of SLCP reductions improved the reduction opportunities. Jose Andreu assisted with inputs on recommendations. We thank Susan Anenberg, and Farhan carbon finance and Francisco Sucre on gas flare reduction Akhtar of the U. S. Environmental Protection Agency initiatives. Zhihong Zhang and Andrea Kutter provided (USEPA); and Lisa Emberson and Johan Kuylenstierna inputs on the potential of the Climate Investment Funds. of the Stockholm Environment Institute at York, United Brice Quesnel and Patricia Bliss-Guest were helpful in Kingdom. strengthening the finance-related sections of the report. Finally, special thanks are due to Rachel Kyte (Vice A number of regional colleagues provided inputs: George President of Sustainable Development at the World Bank) Henry Stirrett Wood, Tijen Arin, and Christophe Crepin for her leadership on addressing SLCPs in the World from East Asia and the Pacific; Svetlana Edmeades, Ernesto Bank’s portfolio of activities. The guidance provided by Sanchez Triana, Todd Johnson, Shomik Mehndiratta, Mary Barton-Dock (Director, Climate Policy and Finance and Maria Catalina Ochoa from Latin America and the Department) and Grace Yabrudy (Operations Director, Caribbean; Maria Sarraf, Shakil Ferdausi, Charles Cormier, SDN) in preparing this report is greatly appreciated. and Muthukumara Mani from South Asia; Aziz Bouzaher a report prepared at the request of the g8 1 Executive Summary 1. As a development institution focused on reducing clients while delivering global climate benefits at the poverty and boosting shared prosperity, the World same time. For example, the concentrations of black Bank is working in many countries that suffer from carbon on Tibetan glaciers have increased two- to three- a lack of basic services such as waste management, fold relative to the concentrations in 1975, suggesting transportation, and access to modern energy. a role in the acceleration in glacial melt in that region Addressing these development challenges often has an (Xu et al. 2009), which presents challenges to water impact on the emission of short-lived climate pollutants resources management. (SLCPs)—among them methane and tropospheric 5. A 2011 synthesis report by UNEP identified a suite ozone, black carbon (BC), and hydrofluorocarbons of 16 measures that reduce methane and black carbon (HFCs). While the development benefits are the primary emissions and that could deliver more than 90 percent focus of the World Bank’s support to these projects, of the global benefit of about 2,000 measures modeled. they also provide an opportunity to realize climate The 16 measures were estimated to lead to global benefits as well as air quality, health, and agricultural cooling of approximately 0.4–0.5°C by 2040–2050. Of co-benefits, by reducing SLCP emissions. this range, about 0.2-0.3°C is due to methane emission 2. The World Bank report Turn Down The Heat presents reduction1 (UNEP/WMO 2011a; Shindell et al. 2012). evidence that the world could be 4°C warmer this These measures and additional approaches to HFC century with catastrophic consequences, especially for reduction served as the starting point for a review of the poor and most vulnerable. Recent scientific evidence the World Bank’s portfolio to identify and highlight suggests that reducing the emissions of SLCPs in potential opportunities and activities that could reduce tandem with efforts to reduce carbon dioxide emissions SLCP emissions. is likely to slow the rate of global warming over the next 6. This review of the World Bank’s portfolio highlights two to four decades. the efficacy of integrating SLCP mitigation in 3. Apart from the potential global benefit of changing the development projects. Over the six-year period of the trajectory of surface warming, addressing SLCPs offers review (FY2007–2012), 7.7 percent of IBRD/IDA2 several tangible local benefits. The United Nations commitments (approximately US$18 billion3) were on Environment Programme (UNEP) estimates that SLCP-relevant4 activities in energy, transport, roads, fast action to reduce SLCP emissions could avoid an agriculture, forestry, and urban waste and wastewater. estimated 2.4 million premature deaths from outdoor Going forward, the goal will be to transform as much air pollution annually by 2030 and avoid over 30 million of the SLCP-relevant activities as possible into SLCP- tonnes of crop loss per year (UNEP 2011a). The recent reducing activities. Specific commitments for the World Global Burden of Disease report estimates that in 2010 Bank on SLCP-reducing activities will be articulated there were 4 million premature deaths from indoor smoke from solid fuels and another 3 million deaths 1 While methane represents 60% of the climate benefit, as calculated in Shindell et al. (2012), BC represents 98% of the human health benefits and 92% of the from urban air pollution (Lim et al. 2012). Both forms monetized value. of air pollution include black carbon as one of the 2 This stands for International Bank for Reconstruction and Development/ pollutants. International Development Agency, which are part of the World Bank Group. 3 All dollar amounts are U.S. dollars unless otherwise indicated. 4. Depending on the relative cost-effectiveness compared 4 SLCP-relevant activities are defined as those World Bank activities with the to other measures, actions to reduce SLCPs may bring potential to reduce emissions. For example, in the energy sector, a gas flare reduction project is SLCP relevant while a power transmission project is not additional development gains for the World Bank’s considered SLCP relevant. 2 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Sixteen measures that reduce methane as part of the climate action planning process which is and black carbon emissions could: 0.4 expected to conclude in 2014. 7. SLCP-relevant activities vary across the World Bank’s six regions, driven by development priorities of the Bank’s operational regions and client countries. Activities relevant to rural development, such as rice irrigation, are more prominent in Sub-Saharan Africa and South Asia. In contrast, activities aimed at urban settlements, such as wastewater treatment and transport systems, are more common in the Latin America and the Caribbean region …reduce global and the Europe and Central Asia region. The East Asia Degrees Celsius warming by and Pacific region, which has a mix of countries of approximately varying income levels, shows a blend of rural and urban activities. 0.4-0.5°C 8. Based on the volume of lending, the World Bank’s by 2040-50. 2.4 portfolio review shows SLCP reduction potential in investments across a range of activities such as bus and rail-based transport systems (which reduce BC emissions and have strong, local public health co-benefits), solid waste collection and disposal (which reduce methane emissions), cookstoves and kilns (which reduce black carbon), and rice irrigation and wastewater management (which impact methane emissions and have global benefits to agricultural productivity and health). Realizing …avoid an the full potential for SLCP reduction will require addressing a number of barriers, and mainstreaming at Million Premature estimated 2.4 million all levels of engagement—from strategies (for example, Deaths premature deaths from Country Partnership Strategies) to policy support (for outdoor air pollution example, Development Policy Operations) and in annually by 2030. investment lending operations. 30 9. In selecting which of the opportunities represent optimal mitigation strategies, it is critical to consider the full suite of factors that determine the extent of service delivery, health, climate, and other development benefits for a given investment in the context of the World Bank’s overarching objective of reducing poverty and boosting shared prosperity. There could be trade-offs among these different objectives and a number of factors need to be considered when taking development decisions, including …avoid annual Million Metric losses from four Tonnes of major crops of Crop more than 30 million Losses metric tonnes. Source: UNEP 2011a and b a report prepared at the request of the g8 3 the opportunity cost of proposed interventions, the 11. The forthcoming World Bank Climate Action Plan is financial and institutional capacity of the stakeholders expected to provide a timetable for implementation affected, and the location of emissions. of full SLCP accounting and economic evaluation 10. These observations call for strengthening the analytical with a focus on multiple development and climate basis for action on SLCPs. For methane and HFCs, the benefits. It is also expected to provide a timeline to Bank will introduce emissions accounting over FY14– track the financing of SLCP-reducing activities at 15. Assuming that adequate budget will be allocated, the World Bank. Under the umbrella of the Climate the Bank will also initiate work on developing and Action Plan, the World Bank proposes to work with piloting methodologies to account for BC emissions. multilateral development banks (MDBs) to explore To better integrate actions that address SLCP emissions options to extend the harmonized systems for climate and climate benefits at the project level, it is proposed finance tracking and GHG accounting to include SLCP that a comprehensive economic analysis framework reduction (based on the interest of other MDBs). be developed that accounts for all the local and global 12. SLCP-reducing activities could also be scaled up in benefits that projects provide due to SLCP emission the World Bank’s portfolio by raising client and staff reductions. Subject to funding, this would be undertaken awareness of SLCPs and their reduction benefits. in tandem with methodology development for BC Innovative instruments to finance the incremental costs emissions accounting, since the local benefits for health of SLCP mitigation activities could be developed by the are driven by reducing BC emissions. Furthermore, it is World Bank to provide the necessary impetus for action. proposed that the World Bank develop methodologies 13. While SLCP reduction could reduce the rate of and train staff in the use of tools for SLCP accounting warming in the coming decades, over the long run, it and economic evaluation that incorporate local and makes only a modest contribution to climate change global externalities (health impacts in particular), and mitigation. As UNEP (2011a) underscores, immediate multiple-development benefits into the economic and substantial reductions of CO2 and other long- analysis of projects to facilitate the integration of SLCP lived GHGs are needed to avoid a 4°C warmer world. reduction in the World Bank’s portfolio. However, SLCP reduction can deliver significant local development benefits, particularly for human health, which provides a strong impetus for taking early action. 4 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES a report prepared at the request of the g8 5 1 Introduction 1.1 Background potentially be reduced—and opportunities to deliver those reductions and their climate benefits based 1. In May 2012, the Group of Eight (G8) on analysis of six years of lending activities. This industrialized member nations commissioned analysis is meant to inform where SLCP reduction the World Bank “...to prepare a report on ways to should be made an integral part of project planning integrate reduction of near-term climate pollution and decision making going forward, to systematically into their activities and ask the World Bank to bring explore emission reduction opportunities with the together experts from interested countries to evaluate objective to turn emission savings into expected new approaches to financing projects to reduce project benefits. The World Bank will be consulting methane, including through pay-for-performance client countries on these issues and continue mechanisms.� engaging in outreach efforts to elevate awareness 2. World Bank lending operations actively contribute to on the impacts of SLCPs. Client engagement and the sustainable development priorities of countries consultation is an important step in exploring the and advance the institution’s mission of poverty relationship between SLCP-relevant activities and reduction. Many of the activities associated with these various benefits. operations also reduce short-lived climate pollutants (SLCPs), including methane (as both a direct climate Box 1: Key Messages from UNEP Assessments forcing agent and as a precursor to tropospheric ozone), black carbon (BC), and hydrofluorocarbons Recent synthesis reports from the United Nations (HFCs). Reductions of SLCPs can improve air Environment Programme (UNEP) looked at the full range quality and public health, achieve energy savings, of potential benefits of reducing four main SLCPs— and strengthen food security. The range of benefits methane, BC, tropospheric ozone, and HFCs—and identified measures that offer a realistic opportunity to associated with SLCP reduction provides a strong link significantly reduce the rate of global warming over with the World Bank’s mandate of reducing poverty the next two to four decades. If fully implemented by and boosting shared prosperity, as well as with the 2030, just 16 measures that reduce methane, BC, and emerging focus on green growth. tropospheric ozone are estimated to do the following: • Reduce global warming by about 0.4°C by 2040–2050. 3. Activities that reduce SLCPs can also yield significant • Avoid an estimated 2.4 million premature deaths annually climate benefits (see Box 1). As society’s scientific from outdoor air pollution and greatly reduce impacts on understanding of global climate change evolves, it has health from indoor exposure. come to understand that emissions of these SLCPs • Avoid annual losses from four major crops of more than may be responsible for more than 30 percent of 30 million metric tons. current global warming (Intergovernmental Panel on Additional measures for reducing HFC emissions are estimated to do the following: Climate Change [IPCC] 2007). Hence, their reduction could slow the rate of global warming over the next Avoid, by 2050, an increase of one-fifth to one-fourth of •  the increased radiative forcing resulting from CO2 buildup two to four decades as the world addresses the longer- since 2000 levels. term problem of carbon dioxide (CO2) emissions and Avoid locking in technologies that slowly release super •  transitions to a low-carbon economy (UNEP 2011; greenhouse gases over time. Shindell et al. 2012). 1.2 Objective Sources: UNEP 2011a and b. Note: The UNEP synthesis report was in part based on prior work (Shindell et al. 2012; UNEP/WMO 2011) that found a 0.5°C reduction 4. The primary focus of this assessment is to respond by 2050. to the first part of the G8 request and consider ways to integrate reduction of SLCPs into World Bank activities.5 To that end, this report examines the Bank’s portfolio to assess the scale of SLCP- To respond to the second part of the G8 request, the World Bank is convening an 5 relevant activities—activities in which SLCPs can expert group to review methane finance opportunities as a separate exercise. 6 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES 1.3 Structure of the Report 5. This report focuses on three principal analyses and focuses on methane, BC, and HFCs, without a separate analysis of precursors for ozone other than methane. It is structured as follows: 6. Chapter 2—scientific and technical context for World Bank action—considers the net benefits of focusing on reductions of SLCPs from the perspective of their contribution to global climate change. This chapter highlights the multiple benefits of SLCP reduction and discusses the relevance of SLCPs from a global, This analysis examines the regional, and local perspective. It also discusses sectors that contribute to the emissions of SLCPs World Bank’s portfolio to and their precursors highlighting the projects that typically relate to SLCP emission sources and potential assess the scale of SLCP interventions that can deliver SLCP reduction and climate benefits. relevant activities to inform 7. Chapter 3—nexus of World Bank activities and SLCP emissions—assesses World Bank lending where SLCP reduction should commitments in fiscal years 2007–2012 that offer SLCP reduction opportunities. The chapter describes the methodology and database used for the analysis, be made an integral part of identifies the major sectors, project types, and project components associated with SLCP emissions, and lists project planning and decision the major SLCP-relevant activities and opportunities to reduce SLCP emissions and deliver multiple making going forward. benefits within the World Bank’s portfolio. 8. Chapter 4—roadmap for integration—presents the key steps that the World Bank could take to maximize the multiple benefits of SLCP reductions in its lending operations. The chapter discusses the economic evaluation framework and how it could be used in decision-making processes. The chapter identifies actions that may help overcome barriers to the uptake of SLCP reduction opportunities. 9. Chapter 5—draws on the preceding analytical discussion to summarize the findings and highlight practical next steps for harnessing the multiple benefits of SLCP reduction in World Bank activities. This chapter also includes plans for strengthening systems for accounting for SLCP emissions and using that information in economic evaluation of SLCP- relevant activities. a report prepared at the request of the g8 7 2 Scientific and Technical Context for Action on SLCPs 10. Reducing SLCPs can help address global warming and and BC, along with other non-CO2 climate pollutants improve development outcomes, especially human (ClimateWorks Foundation 2011). New tools are health. Climate change impacts, including the increased needed to comprehensively evaluate the co-benefits and frequency and intensity of extreme weather events, additional costs to achieve the greatest overall benefit. threaten not only future poverty reduction but also the USEPA’s (2012b) Report to Congress on Black Carbon sustainability of past gains, with potentially catastrophic suggests, “selecting optimal BC mitigation measures consequences in the long-run. In the short-run, requires taking into account the full suite of impacts local health costs can have even greater importance, and attempting to maximize co-benefits and minimize when dense populations are exposed to high local unintended consequences across all objectives (health, concentrations of SLCPs. This chapter considers the climate, and environment).� net benefits of focusing on reductions of SLCPs. 2.2 Short-Lived Climate Pollution 2.1 Development Benefits and Costs and Global Warming of SLCP Reduction 14. “The climate system is a complex, interactive 11. SLCPs have shorter lifetimes in the atmosphere than CO2. From a development perspective, the local benefits system consisting of the atmosphere, land surface, of reducing incomplete combustion of biomass and snow and ice, oceans and other bodies of water, fossil fuels generally far exceeds the potential climate and living things.� benefits of reducing their emissions. For example, BC IPCC, Fourth Assessment Report, 2007 from incomplete combustion of diesel in vehicles is a toxic air pollutant. Diesel exhaust is a risk factor for 15. Despite the climate system’s complexity, the scientific cardiopulmonary disease and can trigger asthma or establishment has developed a firm understanding of heart attack, leading to increased hospital visits and risk the major processes operating within each component of premature death (World Bank 2011a). of that system. Sophisticated climate models are 12. Methane is released as a fugitive emission from oil and now able to replicate past climate trends and project gas production and distribution and biogas production; interactions of the various climatic effects to yield from agriculture including livestock and rice farming; increasingly accurate climate simulations for the future from decomposition of municipal solid waste; and other at a global and regional scale. As scientific understanding sources like coal mines. In the atmosphere, methane of the myriad effects of specific pollutants on climate leads to the formation of tropospheric ozone or smog. improves, the large and dominant role played by long- These pollutants can cause significant crop damage, lived greenhouse gas (GHG) emissions in raising global affecting agricultural yields (UNEP 2011a).6 HFCs are average temperature remains unchanged. valuable synthetic chemicals for heating and cooling 16. SLCPs—including methane,7 BC, and some HFCs—are systems under the roughest operating conditions given potent in terms of their radiative properties. However, their low combustion and explosive properties, but because of their short lifetime, they have received less these same properties increase the global warming attention than their long-lived counterparts, which potential of emissions. A full list of the range of continue to warm the planet for centuries after their environmental, agricultural, air quality, and public health release. When grouped together, the Intergovernmental benefits associated with SLCP reduction is provided in Annex 1. 13. It should be noted—consistent with the World Bank 6 There is still significant uncertainty about the magnitude of crop losses based on geographical and temporal settings. For example, greater benefits will accrue in locations where more crops are grown and Environment Strategy and OECD policy (World Bank where ozone is reduced during transpiration. Research continues to improve atmospheric modeling of ozone concentrations and the understanding of plant exposure. 2010a; OECD 2009)—that SLCP reduction strategies 7 While tropospheric ozone contributes to radiative forcing and is short-lived, global measures to address and opportunities with the greatest overall benefits this pollutant are restricted to those measures that reduce methane given its dual role as both a SLCP and as the major cause of observed increases in global background levels of tropospheric ozone. may not be the cheapest options. Box 2 contains Addressing tropospheric ozone in local, urban contexts often involves more complicated local chemistry and meteorology and is best dealt with through local control programs. Hence, this report follows the information on abatement cost estimates for methane convention of associating global ozone measures with the SLCP methane. 8 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Box 2: Abatement Costs for SLCP Reduction Nitrous oxide Black carbon Abatement cost, societal perspective Methane F-gases US$/tCO2e 200 Industrial wastewater - improved treatment Project cost only, value of public health and 100-year Agricultural machinery, stage 2 controls environmental bene�ts GWP Livestock - feed supplements not included HDV particulate �lters, new (Euro 6) 80 2-/3-wheeler TWC HDV diesel US 04/Euro 5 controls 60 Livestock - antimethanogen vaccine 40 Motor vehicle air conditioning systems - low-GWP refrigerants Land�ll gas - electricity generation 20 0 0 1.0 2.0 3.0 4.0 -20 Composting of new solid waste Improved cook stoves Abatement potential GtCO2 e per year -40 Rice cultivation - water management Rice cultivation - changed nutrient management -60 P&G upstream - equipment upgrades VSBK replacing BTK & IDK Land�ll gas - direct use 2.3 GtCO2e at societal pro�t 1.4 GtCO2e at 0-20 0.8 GtCO2e at >20 US$/tCO2e US$/tCO2e SOURCE: NON-CO2 Climate Forcers Report (2010) Estimating abatement costs for measures to mitigate SLCPs requires data on project costs, economic factors, and emission reductions potential. In this portfolio review, we did not have adequate data from World Bank SLCP-relevant projects to establish abatement costs, with the exception of carbon finance operations that reduce methane. However, information on the cost- effectiveness of individual measures is available in the literature, including the UNEP synthesis report (2011a, Table 4.1), new studies such as Höglund-Isaksson (2012), and a report from the ClimateWorks Foundation (2011), which considered all non-CO2 climate pollutants, including nitrous oxide and some longer-lived fluorinated gases. The figure above from ClimateWorks (2011) shows that about half the interventions considered for SLCP reduction at that time could be achieved at low or no cost when taking account of only project costs (not co-benefits of lives saved or crop losses prevented) and assuming a social discount rate of 4 percent. Generally methane measures can be achieved at negative costs, while BC measures are more expensive. However, BC measures may deliver a larger short-term climate benefit and important local health and other environmental benefits. Source: Non-CO2 Climate Forcers Report (2010). Panel on Climate Change (IPCC 2007) estimated that 2012).8 A slowdown in the rate of warming—achieved SLCPs may be responsible for more than 30 percent by rapid reductions of SLCPs with substantial action of overall global warming. Recent estimates put this on CO2 emissions—could reduce the projected global number higher at between 40 and 45 percent of the temperature increase and avoid potentially dangerous total or higher (Molina et al. 2009; Bond et al. 2013). “tipping points� in important climatic systems (Molina 17. New analyses indicate that SLCP reduction could et al. 2009). Note that there is considerable uncertainty reduce the rate of global warming over the next two associated with the net global climate impact of BC to four decades as the world addresses the longer-term 8 The Shindell et al. (2012) analysis indicates that global implementation of 14 problem of CO2 emission reduction and transitions to key measures to reduce BC and methane would result in reduced warming of a low-carbon economy (UNEP 2011a; Shindell et al. approximately 0.5°C by 2050. a report prepared at the request of the g8 9 emissions (UNEP 2011a; Shindell et al. 2012; Bond et carbon emission reduction opportunities can be found al. 2013). in the transport, residential, industry, and agriculture 18. It is important to highlight that the near-term sectors. A recent assessment by the USEPA (2012b) temperature reduction that SLCP mitigation may confirmed the control opportunities for BC (including provide does not diminish the urgency of reducing CO2 those identified in UNEP 2011a). A 2013 scientific emissions. While SLCP reduction could slow the rate assessment of BC sources and impacts also confirms of warming in the coming decades, over the long run, the key mitigation options (Bond et al. 2013).10 it makes only a modest contribution to climate change 24. A separate UNEP assessment (UNEP 2011b) reviewed mitigation. As UNEP (2011a) underscores, immediate short-lived HFCs, which are considered in this report and substantial reductions of CO2 and other long-lived (a typology of HFC abatement options is presented in GHGs are needed to avoid a 4°C warmer world. Chapter 3). International efforts to address HFC growth 19. A detailed description of the key SLCPs (methane, BC, are gaining momentum in part because alternative and HFCs), their primary climate effects, and estimates technologies do, or will, exist for a number of of their warming potential are provided in Annex 2. applications. However, technically proven, commercially viable, safe, and affordable alternative technologies 2.3 Measures to Reduce Short-Lived with low to no global warming potential (GWP) are Climate Pollutants not available in all sectors. This is particularly so for 20. Some SLCP emission reduction measures have large residential air conditioning which has high growth local development benefits (such as human health and rates in developing countries.11 The World Bank, as an agriculture) and also deliver near-term climate benefits. implementing agency to the Multilateral Fund for the These benefits—both for development goals and for Implementation of the Montreal Protocol and for the the climate system—vary strongly by measure and Global Environment Facility (GEF), promotes adoption across regions (Shindell et al. 2012). of low to no GWP, energy efficient technologies where 21. SLCP reduction opportunities span the energy sector possible as an alternative to hydrochlorofluorocarbons (for example, oil and gas extraction and transportation, actively being phased out. This work seeks to help fuel choices including biogas and biomass, supply- countries and industry transition to systems using HFCs side and demand-side energy efficiency, cooking and with lower GWP where low to no GWP technologies heating facilities, refrigeration), agriculture (for example, are not available. These activities are carried out in agricultural and burning practices), transportation (for combination with other program elements, such as example, public transit, rail, freight, vehicle exhaust investments in greater energy efficiency (see Box 3). emissions control, and vehicle cooling), buildings The Bank is currently identifying ways to pair sound (for example cooling systems, building construction alternative technology choice with energy efficiency and insulating materials), and waste and wastewater improvements beyond direct energy efficiency management (for example, solid waste and wastewater investments, to inform the design, procurement and treatment). implementation of Bank investments. 22. UNEP’s 2011 assessment of SLCP emissions analyzed 25. The location and timing of BC reduction opportunities the cost and technical potential of more than 2,000 is important (USEPA 2012b). For example, BC control measures that reduce methane and BC reduction measures may be most effective near the emissions (UNEP 2011a).9 Tables 1 and 2 list the key measures with the greatest reduction potential. The measures in Tables 1 and 2 may or may not be the most 9 This assessment was based on information in the GAINS integrated assessment model (Amann et al. 2011) and accounts for the positive and negative climate relevant interventions from a development perspective forcing of BC and methane as well as co-emitted species for each measure. The and thus may not be within the purview of the World model, therefore, can estimate the integrated climate benefit of each of the 2,000 measures considered to develop a ranking. The 16 measures identified account Bank. As with the UNEP synthesis report, these for 90 percent of the maximum reduction potential in CO2e terms through 2030 measures serve as an appropriate basis for beginning a (UNEP 2011a). 10 The measures listed in Table 1 and 2 were selected with consideration to co- review of the World Bank’s lending portfolio. emitted species and location of emissions. 23. Methane abatement opportunities occur in the energy, 11 Although a couple of companies have already developed HFC-free room air conditioners and started serial production, regulatory issues and charge size waste management, and agriculture sectors. Black restrictions (limiting prototype capacities) prevents widespread deployment. 10 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Table 1: Methane Abatement Opportunities with Climate and Air Quality Benefits by 2030 Measure Sector Extended premine degasification and recovery and oxidation of methane from ventilation air from coal mines Extended recovery and utilization, rather than venting, of associated gas and Fossil fuel production and transport improved control of unintended fugitive emission from the production of oil and natural gas Reduced gas leakage from long-distance transmission pipelines Separation and treatment of biodegradable municipal waste through recycling, composting, and anaerobic digestion as well as landfill gas collection with combustion/utilization Waste Management Upgrading primary wastewater treatment to secondary/tertiary treatment with gas recovery and overflow control Control of methane/emissions from livestock, mainly through farm-scale anaerobic digestion of manure from cattle and pigs Agriculture Intermittent aeration of continuously flooded rice paddies Source: UNEP 2011a. Table 2: Black Carbon Abatement Opportunities with Climate and Air Quality Benefits by 2030 Measure Sector Standards for the reduction of pollutants from vehicles (including diesel particle filters), equivalent to those included in Euro-6/VI standards, for road and off-road vehicles Transport Elimination of high-emitting vehicles in road and off-road transport Replacing lump coal by coal briquettes in cooking and heating stoves Pellet stoves and boilers, using fuel made from recycled wood waste or sawdust, to replace current wood burning technologies in the residential sector in industrialized countries Residential Introduction of clean-burning (fan-assisted) biomass stoves for cooking and heating in developing countries Substitution of traditional biomass cookstoves with stoves using clean-burning fuels (liquefied petroleum gas (LPG) or biogas)1,2 Replacing traditional brick kilns with vertical shaft brick kilns3 Industry Replacing traditional coke ovens with modern recovery ovens Ban on open burning of agricultural waste1 Agriculture 1. Motivated in part by its effect on health and regional climate, including its impact on areas of ice and snow 2. For cookstoves, given their importance for black carbon emissions, two alternative measures are included 3. Zig-zag brick kilns would achieve comparable emission reductions to vertical-shaft brick kilns Source: UNEP 2011a. a report prepared at the request of the g8 11 Himalayas, the Arctic, and other snow- and ice-covered Box 3: Safeguarding the Ozone Layer and the Climate: regions.12 The pursuit of some diesel-reduction strategies the World Bank’s Montreal Protocol Portfolio such as a focus on regulatory measures aimed at SLCP reduction could have potential trade-offs with a focus The World Bank has served as an implementing agency on transport investment that are beneficial for poverty for the Multilateral Fund for the Implementation of the reduction and growth. HFC reduction opportunities Montreal Protocol (MLF) and GEF since the early 1990s. may be limited geographically by technical capacity and Under the MLF, over US$1 billion was approved for professional knowledge, by regulatory and enforcement projects in more than 25 countries. This has resulted in the elimination of over 300,000 ODP-tons of ozone systems (such as building codes), and by safety depleting substances (ODS)—more than two-thirds of considerations or public and industry acceptance. Brick- the total phase-out achieved by the MLF. Through World kiln and cook stove programs are particularly relevant Bank-GEF supported projects, valued at US$93 million, in Sub-Saharan Africa and Asia. Methane emissions another 230,000 ODP-tons of ODS were eliminated from countries with economies in transition. Since ODS tend to increase the hemispheric burden of background are also high-GWP substances, the MLF portfolio has tropospheric ozone and thus do not have region-specific resulted in avoided emissions of more than 1.2 GT (billion concerns. However, both BC and ozone have region- tons) of CO2-equivalent (CO2e) (discounting the GWP of specific health and agricultural benefits regardless of alternatives that were introduced). where the reductions occur. Projects approved since 2011 are also designed to avoid the introduction of HFCs where feasible. Where not 2.4 Uncertainty of Climate Impacts feasible, less potent HFC-based formulations, HFCs with lower GWP values, or other measures are introduced to 26. All SLCPs have global warming effects, but they are offset the impact of the gas (such as energy efficiency seldom emitted alone, and some of the co-emitted species measures or smaller charge amounts). Through five of may have global cooling effects. This area of uncertainty the six HCFC phase-out projects, it is estimated that nearly 27 million tons of CO2e from HFCs will have been is an issue primarily with BC emissions from combustion avoided annually through alternative technology choices. of biomass and of fossil fuels with high sulfur content. Two of these projects became effective in 2012 and three The net global warming effect of these BC emissions will become effective in 2013. In the only case where may be positive or negative depending on the source, high-GWP HFCs could not be avoided, the project aims to generate a net benefit to the climate by increasing the co-emitted pollutants, and geography (see footnote 12). average energy efficiency ratio of new air-conditioning Hence, while it is easier to link BC emissions reduction units. to local benefits (such as reduced health impacts), in Note: ODP-tons = tonnes weighted by a chemical’s ozone-depletion assessing climate impacts it is important to consider potential. whether reducing SLCP emissions is expected to lead to net cooling. 27. While these scientific uncertainties present challenges to the development of a set of optimal measures to address global warming from SLCPs, tools are being developed The reflectivity of the surface is important because the benefit of reducing 12 black carbon (which absorbs light and heat) can be offset by co-emitted sulfate that can estimate the multiple benefits (such as for health and organic carbon (which reflects light back to space). Over bright surfaces the and agriculture) of SLCP reductions while accounting effect of sulfate and/or organic carbon is minimized as reflective aerosols have a similar albedo to the surface, while the effect of absorbing BC is enhanced as its for trade-offs and synergies between co-pollutants. These contrast with the surface is larger than elsewhere. tools and implementation strategies are discussed further in Chapter 4. 12 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES 27 Million Five HCFC phase-out projects approved by the World Bank since 2011 are estimated to avoid nearly 27 million tonnes of CO2e annually through alternative technology choices. a report prepared at the request of the g8 13 3 Nexus of SLCP Emissions and World Bank Activities 28. The World Bank works in many of Figure 1: Aggregation of Project Activities into Typologies the key activity areas that affect SLCP Forest fire management emissions. It provides financial support Forest fire management Agric & Forestry Shift from slash & burn to client countries through IBRD/IDA loans, development policy operations, and Manure management Manure management dedicated climate-financing instruments, Rice farming such as carbon finance, the GEF, and Rice irrigation (Intermittent aeration) Construction, repair & maintenance of irrigation Climate Investment Funds (CIF). Fuel switch (LPG, biogas) Fuel switch from biogas, cooking LPG 29. As a development institution focused on Gas flare/leak reduction Gas flare/leakage reduction Energy reducing poverty and boosting shared Cookstoves Improved cookstoves prosperity, the World Bank provides assistance to countries that have not been Boiler/Kiln efficiency Brick kiln, industrial boilers primarily driven by SLCP concerns, except Fleet augmentation, full BRT, BRT route Bus based systems in the case of dedicated climate finance Public transport instruments (such as carbon finance for Transport Urban roads Repair, construction, maintenance, upgrade of urban roads methane) or where elevated fine particulate concentrations from BC emissions pose Rail based systems MRT, rail lines, coaches a serious threat to public health and even Intelligent traffic systems economic productivity. There is, however, Traffic managment systems Non-motorized transportation significant opportunity to reduce SLCPs Emission control, clean diesel in World Bank projects. This chapter Sanitary landfills with gas collection highlights these opportunities through a portfolio review of SLCP-relevant activities Composting over six fiscal years (FY07–12, that is, Sanitary landfills without gas collection Solid waste manatement July 2006 through June 2012). It presents Close open dumps Urban Waste activities where the World Bank’s IBRD/ Increased waste collection IDA portfolio has potential to contribute to Recycling SLCP emission reductions. It also presents Rehabilitation and construction of new WWTP a snapshot of the development policy Wastewater treatment support portfolio (Development Policy Legend: Impacts black carbon emissions Impacts methane emissions Impacts BC and methane emissions Operations), as well as climate finance instruments and ozone programs. 3.1 Methodology and Criteria for distinguished from investment lending projects because Portfolio Selection of their focus on policy support. 30. Sixteen UNEP abatement measures (Table 1 and 31. Based on their impact on SLCP emissions and drawing Table 2 in Chapter 2) were used along with the known on the abatement measures in Table 1 and Table 2, SLCP emission sources to identify sectors in the World initial screening identified project activities that affect Bank’s lending portfolio that could impact SLCP SLCPs in 256 investment projects, henceforth referred emissions. Seventeen sub-sectors were identified and to as SLCP-relevant activities.13 During FY2007–12, analyzed, covering projects in energy, agriculture and the World Bank committed a total of US$233.3 billion forestry, transportation, solid waste, and wastewater. The review excluded stand-alone carbon finance, Montreal Protocol, and GEF projects, but included 13 SLCP-relevant activities are defined as those World Bank activities with the potential to reduce emissions. For example, in the energy sector, a gas flare those blended with IBRD/IDA financing. Development reduction project is SLCP relevant while a power transmission project is not Policy Operations (DPOs) were included but were considered SLCP relevant. 14 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES of IBRD/IDA resources to finance Figure 2: Typology of HFC Reduction Projects within the World Bank 2,002 projects. The identified SLCP- Conversion of manufacturing capacity based on ozone depleting substances or HFCs relevant activities totaled approximately Technology change Retrofitting equipment to use no to low GWP substances US$18 billion (7.7 percent of the total commitments). Replacement of equipment HFC Avoiding leakage through good practices and Reuse with recovery and recycling Project Typology Avoidance Avoidance or destruction of unintended HFC production 32. The typology developed for the analysis Alternative methods and processes is shown for methane and BC in Figure 1. The figure shows which activities in Figure 3: Regional Distribution of SLCP-relevant Projects by Typology the transport sector can impact black carbon emissions, while activities under Number of projects the wastewater and solid waste sectors 100% SAR have an impact on the emission of 90% 80% MNA methane. The agriculture and forestry 70% LAC sector, together with the energy sector, 60% 50% ECA impact black carbon and methane 40% EAP emissions. 30% 20% AFR 33. A typology related to avoidance or 10% elimination of HFCs has been developed 0% Cookstoves Rice irrigation (int. aeration) Urban roads Solid waste management Forest fire management Bus based systems Fuel switch (LPG, biogas) Traffic management Wastewater treatment Rail based systems Boiler/Kiln efficiency Gas Flare/Leak reduction Manure management (see Figure 2) to complement the typology of SLCP activities based on the UNEP synthesis report (2011a), which focused on methane and BC. The types of projects where HFCs can be avoided or eliminated are closely aligned with the industrial sectors traditionally covered by Figure 4: Regional Distribution of SLCP-relevant Potential Impacts on Methane and the Montreal Protocol, given that HFCs BC Emissions were developed primarily as substitutes for ozone depleting substances (ODS) in Methane 25.0% 22.8% 14.7% 14.0% 6.6% 16.9% AFR LAC foam, refrigeration and air conditioning, EAP MNA fire protection, and aerosols. Black 25.7% 33.6% 5.3% 20.4% 5.9% 9.2% ECA SAR carbon Project Portfolio 0 20 40 60 80 100 120 140 160 34. The regional distribution of SLCP- Number of activities relevant activities tends to reflect the development needs across geographies countries with varying income levels, shows a blend of (see Figure 3). For example, rice irrigation and projects (see Annex 3). cookstove projects aimed at increasing access to 35. Overall, there were slightly more SLCP-relevant improved energy services are more concentrated in activities with the potential to reduce black carbon than the Sub-Saharan Africa (AFR) and South Asia (SAR) methane (Figure 4).14 AFR and EAP together represent regions. Activities aimed at improving the quality of life more than half the BC related activities, while the in urban settlements—such as wastewater treatment methane related portfolio is more evenly distributed and rail based systems—are concentrated in the Latin America and Caribbean (LAC) and Europe and Central Asia (ECA) regions. The East Asia and Pacific (EAP) Activities that impact both BC and methane are included under the predominant 14 region, which has a mix of low- and middle-income pollutant of these two. a report prepared at the request of the g8 15 Figure 5: Aggregation of Commitments to SLCP-relevant Project Activities Showing Regional Distribution and Number of Activities Wastewater treatment Over six years URBAN WASTE Solid waste management Traf�c management (FY2007-12) approximately TRANSPORT Bus based systems Rail based systems Urban roads US$18 billion Gas flare/Leak reduction AFR of IBRD/IDA ENERGY Fuel switch (LPG, biogas) Cookstoves EAP ECA commitments were Boiler/Kiln ef�ciency Rice irrigation (Int. aeration) LAC MNA on SLCP-relevant activities. FORESTRY SAR AGRIC. & Manure management Forest �re management 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 US$ Million across three of the six operating regions of the World 3.2 Potential Opportunities to Address SLCP Bank (AFR, ECA, and LAC), though the majority of Emissions activities are in EAP. 37. SLCP emissions are closely linked to economic 36. Figure 5 shows financial commitments by project development. The increase in agricultural production, type. Rail based systems account for the largest in particular livestock; in oil and gas production; and in financial commitments. LAC region has the highest waste from households and businesses are all sources of commitments (US$2.3 billion) for rail based systems, methane emissions. Open biomass burning, residential followed by EAP at US$1.8 billion. Wastewater heating and cooking, industry and transport are some treatment projects account for major commitments in of the biggest BC emitters globally. Many of these LAC and EAP. It is important to highlight that the size emissions tend to increase with population and income of financial commitments should not be considered growth in the early stages of development before falling proportional to the potential for SLCP reduction and at higher income levels. Emissions from mobile sources hence should not be taken as the basis for gauging will also rise strongly during the development process. future emission reduction potential. 38. The mission of the World Bank is to reduce poverty and boost shared prosperity to further the development goals of its client countries. However, SLCP emissions can partially offset the gains in prosperity and poverty 16 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES reduction through its adverse effects on climate change Box 4: Emissions from Roads and local development. SLCPs damage human health and ecosystems. Short-term and long-term exposure In Guangdong Province in China from 2000 to 2009, the to particulate matter constituents such as black total freight tonnage increased by more than 125 percent. According to the Chinese Ministry of Transportation, the fuel carbon leads to higher mortality risks, due particularly efficiency of Chinese trucks is about 30 percent lower than to cardiopulmonary causes, and an elevated risk of in advanced OECD countries. The Guangzhou Green Trucks respiratory morbidity. Very high levels of exposure to Pilot Project (2010) demonstrated that fuel costs for long- fine particulate matter have led to a higher incidence of haul trucks were decreased by 6.6 percent and for garbage trucks 18.5 percent through efficiency improvements leading lung cancer. to reduction in operating costs and in emissions—including 39. Activities that reduce SLCP emissions in the World black carbon (see Annex 3 for details). Bank portfolio are usually ancillary to the primary project development goals. Several case studies are benefits of reducing particle emissions in terms of used in this section to highlight the types of projects better health and productivity gains can be significant in where SLCP emissions have been reduced or where urban areas where population exposures are high. there are opportunities for incremental efforts. Two case studies on non-climate benefits of SLCP 43. A significant opportunity for SLCP reduction is emission reductions illustrate how the World Bank’s available through addressing fleets of freight transport core development projects can provide quantifiable vehicles. The World Bank is beginning to use this multiple benefits, such as improved local air quality opportunity for example, through green freight projects and public health (see Box 5). that aim to improve fuel efficiency of transport fleets and provide BC reductions as a co-benefit (see Box 4). Transportation Projects However, green freight is not a major part of the World 40. Transport projects include urban transport projects, Bank’s lending portfolio. urban road projects spanning their construction, 44. Urban transportation projects including bus rapid rehabilitation, maintenance, upgrading, and expansion, transit (BRT) systems, metro rail transit (MRT) systems, as well as long-distance rail projects. Project activities augmentation or provision of public bus fleets, the include passenger and freight rail, bus rapid transit promotion of non-motorized transportation systems (BRT) systems, metro rail transit (MRT) systems, to promote a modal shift from personalized modes augmentation or provision of public bus fleets, and the (cars and two-wheelers) and informal transport modes promotion of non-motorized transportation systems, (mini-buses, vans, or trucks), to transportation systems such as bicycle routes and parking facilities. that use less fuel and take less road space per passenger 41. Urban road project activities reduce travel time or ease or unit of freight, ease congestion, and reduce trip intra-city traffic by rerouting intercity traffic, while length and duration. Hence they can be associated with others recognize the synergies between roads and other reducing emissions of particulate matter (PM) of which sectors, such as agriculture. Facilitating freight transport black carbon is a component, and improving air quality. across the country is often a development objective Estimates made for select World Bank projects show of roads projects. Road projects can contribute to the potential to reduce BC emissions and deliver significant reduction of black carbon if project activities reduce co-benefits (Box 5). congestion and with it diesel consumption per vehicle- 45. To identify reduction potentials, data on emission km due to improved traffic flows. reductions are needed not only by adjusting the 42. Black carbon is a subset of particulate matter, a portfolio composition, but the emission consequences commonly regulated air pollutant to which diesel of new project designs and new project types. exhaust contributes disproportionately. The local Furthermore, interactions of SLCP reductions with a report prepared at the request of the g8 17 Box 5: Emissions from Urban Transport (Bus and Rail-based practices could indicate a preference to purchase Systems) Projects vehicles using non-HFC systems. 48. In general, transport projects can help improve traffic SLCP emission estimates have been made for select flow and offer numerous opportunities to address World Bank projects where data is more readily available. For example, the Pimpri-Chinchwad BRT project in India SLCP emissions. Interventions in urban areas provide (approved in December 2009 with GEF support) and the Cebu opportunities for delivering SLCP reductions with BRT project in Philippines (expected to be approved in July significant local health benefits (see Box 5) given the 201315) are expected to reduce BC emissions over the course larger population exposure. While it is approximated of their lifetime. In Cebu, this is estimated to result in monetary savings ranging from US$94 to US$135 million in direct health that 40 percent of overall transport sector lending is on costs, not taking into account the additional benefits of time activities that are SLCP relevant, more data and analysis savings resulting from reduced congestion and a decrease are required to determine the fraction that may be SLCP in road accidents. The Pimpri project is estimated to reduce reducing. Given the large potential in transport sector, 307 tons of PM over a 20-year lifecycle. However, if scaled up to the national level, it is estimated that more than 1,000 km the World Bank is committed to increasing the share of new BRT corridor could be deployed in larger cities across of SLCP-reducing activities as a fraction of SLCP- India. relevant activities. This will entail providing incentives to An analysis of 1,000 km of new BRT corridor deployed in reduce SLCP emissions in projects up to a point where 20 or more Indian cities shows that more than 300 tons of emission reduction benefits balance development costs. BC emissions could be avoided each year, with additional benefits (depending on deployment schedule) including the 49. Long-distance rail projects are an increasing part of the following: i) 1,100 to 1,350 reduced traffic fatalities per year; ii) World Bank’s portfolio, offsetting traffic and freight that US$1.6 to 1.9 billion/year in fuel savings; iii) 1.9 to 2.3 million would otherwise be carried mainly by road transport. tons/year of CO2 emissions reduction; iv) US$6.4 to 8.1 billion This has significant benefits in terms of SLCPs and in macroeconomic benefits (over 20 years); v) 50,000 to 90,000 short-term jobs rising to 128,000 permanent new jobs; GHGs. The Shi-Zheng Railway Project, for example, vi) more than 175 avoided deaths annually in India because estimates CO2 emissions from equivalent road freight of improved air quality; vii) more than US$500,000 in annual transport to be approximately 400 percent higher than avoided crop losses because of air pollution; viii) 500 million when carried by rail. Similarly, GHG analysis for the hours/year of time savings because of shortened trips. Dedicated Freight Corridor project in India showed that it emits 2.25 times less GHGs than the baseline over a 30-year time frame, where the bulk of the difference other emissions have to be taken into account (measures comes from the decreased use of diesel fuel, which is to reduce diesel usage could lead to substitution by also responsible for BC emissions. gasoline, and therefore reduced SLCP emissions Energy Sector but higher CO2 emissions). The focus on regulatory measures for effective SLCP reduction from transport, 50. The World Bank is engaged in helping developing for example, could have potential tradeoffs with a focus countries deliver modern energy services that are on transport investment that are beneficial for poverty reliable, affordable, and sustainable. Some projects reduction and growth. involve the activities listed in Tables 1 and 2. 46. Some urban transport projects explicitly address local Cookstoves, Kilns, and Boilers air pollution and others present good practice. For 51. Combustion products of biomass and fossil fuel example, the Haiphong Urban Transport Project in contain varying quantities of black carbon, depending Vietnam (approved in March 2011) is supporting on combustion efficiency. Project activities that involve emission abatement through the inclusion of biomass (cookstoves, sustainable charcoal production) maintenance programs in public transportation. are typically aimed at improving the quality of life and 47. There are further opportunities to tackle HFCs, another reducing pressure on biomass use, and more equitable SLCP, in transport projects which involve new vehicle fleet and railway rake purchases. Since HFC substitutes This is outside the review period but the project serves as a good example to 15 for air conditioning in these vehicles are just becoming demonstrate the potential of including BC emission reduction benefits in cost- commercially available, procurement or project design benefit analysis. 18 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES community development in the case of sustainable Infrastructure project approved in May 2008 is replacing woodfuel production. Depending on the technology 317 small, polluting boiler plants with eight new boiler involved and the state of the equipment and appliances, plants, significantly reducing BC emissions. combustion of oil and coal can emit significant 55. There are other activities that could reduce BC quantities of BC. emissions and have beneficial climate impacts. Their 52. The health benefits of reducing exposure to fine effects, however, are indirect and these projects are particulate emissions, of which BC is one component, not amenable to a portfolio review of this nature. have been widely documented.16 Reducing fuel For example, improving the financial and operational consumption and reaping health benefits are the main performance of the power utilities to improve the drivers of projects that improve the energy efficiency reliability of power supply is an important area of of biomass and fossil fuel use. As discussed in Chapter engagement for the energy sector of the World Bank. 2, the global climate benefits of reducing BC emissions Adequate and reliable supply of electricity can eliminate from biomass burning are less certain, except where the need for stand-by diesel power generators which BC deposition occurs on snow or ice. But while are common in countries with serious power shortages, climate effects may be uncertain, there are large health thus reducing BC emissions. Another source of BC benefits associated with reducing debilitating indoor air emissions is lighting using kerosene lanterns (Lam et pollution from traditional biomass use. As such, there is al. 2012). The Lighting Africa Program of the World a compelling case for projects that address air pollution Bank and the International Finance Corporation (IFC) from biomass (for example, the Mongolia Ulaanbaatar is catalyzing access to solar-based lighting products and [UB] Clean Air Project discussed in Annex 3). aims to provide efficient and clean lighting to about 250 53. A recent World Bank study highlighted the need to million people in Sub-Saharan Africa by 2030. Switching mainstream household energy interventions in energy to solar power eliminates BC emissions associated with sector lending and reforms (World Bank 2011b). A kerosene combustion. number of recent initiatives have been launched to 56. Although not directly related to the energy sector, help scale up clean cookstove programs: Clean Stove the benefit of phasing out HFC, which is an SLCP, is Initiative in East Asia (Mongolia, China, Laos, and achieved in energy-efficient chiller projects replacing Indonesia); Clean cookstove component in the access HFC with non-HFC refrigerants. These projects are program of Bangladesh in South Asia; Africa Clean typically undertaken as combined Montreal Protocol Cooking Energy Solutions (ACCES) program in Sub- HFC phase-out and GEF-assisted energy efficiency Saharan Africa; and a dissemination strategy for clean projects. stoves in Central America. The Sustainable Energy Gas Venting and Flaring for All (SE4ALL) initiative17 is scaling up activities to provide modern cooking facilities to those relying on 57. Reducing transmission losses from natural gas pipelines traditional use of solid fuels. These activities are also contributes to methane emissions reduction. The intended to reduce particulate (and hence black carbon) Natural Gas Efficiency Project in Pakistan is an example emissions. In addition, the World Bank could deepen of a project aimed at reducing unaccounted-for gas its engagement with the Global Alliance for Clean in the natural gas distribution system by replacing and Cookstoves (GACC),18 which is already a partner in repairing pipes and improving the leak detection system the EAP and AFR programs. It is important to ensure (Box 6). To the extent that some leaks are inevitable that the technologies deployed are commensurate with the regional socio-economic context and capacity (e.g., 16 According to recent estimates (Lim et al. 2012), close to 4 million annual deaths expensive gasifier cookstoves may not be affordable for worldwide can be attributed to exposures to cooking smoke, which affect the poor in particular. the poor in many parts of the world). 17 Sustainable Energy for All is an initiative launched by the United Nations 54. SLCP emissions could be reduced and fuel savings Secretary-General to make sustainable energy for all a reality by 2030. There is an intermediate target of programs that would create clean cooking access for 400 achieved in small-scale industrial projects, such as million people by 2015. brick kilns and boilers, by improving energy efficiency 18 The GACC is a public private initiative to save lives, improve livelihoods, empower women, and protect the environment by creating a thriving global market for clean (see Box 6). The Liaoning Third Medium Cities and efficient household cooking solutions (www.cleanstoves.org). a report prepared at the request of the g8 19 Box 6: Addressing Emissions from Brick Kilns and Gas Leakage to improve waste management where the need is growing most, and where the services are grossly Aiming at improving air quality and safe mobility in Dhaka, underfunded. As assessed by the World Bank, the the Clean Air and Sustainable Environment (CASE) project (approved in May 2009) provides technical assistance and annual budgetary shortfall in the cities of its client funding to demonstrate environmental initiatives in the two countries is US$40 billion. Although methane emissions most important air polluting sectors—brick making and urban only occur at the point of treatment and disposal, transport. It is estimated that in the North Dhaka cluster, efforts to reduce those emissions can occur at every brick kilns are the city’s main source of fine particulate matter (PM2.5), accounting for nearly 40 percent of total emissions stage in the value chain: planning, waste generation, during the five months of operation. If exposure to urban air collection, treatment, and disposal. pollution is reduced by 20 to 80 percent, it is estimated that 60. In addition to addressing the most pressing and 1,200–3,500 lives can be saved and 80–230 million cases of respiratory diseases can be avoided per annum. Other basic aspects of MSW management, collection and benefits of this project include improving public mobility and disposal, the World Bank could in the future fund energy efficiency. more upstream waste activities, focused on reducing A US$200 million natural gas efficiency project in Pakistan waste generation and increasing source separation. (approved in April 2012) will repair the country’s corroded For example, addressing white goods waste disposal natural gas distribution system, thereby reducing leakage of offers the opportunity to recover HFCs from discarded about 16 billion cubic feet of natural gas over five years; this is equivalent to 7.5 million tonnes of CO2-equivalent emissions refrigeration and air conditioning equipment. Upstream annually. activities also offer co-benefits, such as extending the useful life of a landfill, reducing fossil fuel consumption, and improving air, soil, and water quality. in handling natural gas, anything that reduces gas A comprehensive, integrated approach in the solid consumption through energy efficiency improvement waste sector would improve service delivery and public also reduces methane emissions. health, while reducing methane emissions. See Box 7 for 58. Flaring and venting of gas associated with oil a demonstration of the methane abatement potential of production increases GHG and SLCP emissions a nationwide program based on one Brazilian project without extracting the corresponding energy value of and its significant local development benefits (A detailed the gas. The World Bank hosts the secretariat of the write-up on MSW management is included as Annex 5). Global Gas Flaring Reduction (GGFR)19 Partnership. 61. Wastewater management projects typically focus on A number of activities sponsored by the GGFR investments in constructing, expanding or rehabilitating illustrate its growing interest in this subject. For wastewater collection, transportation systems, and waste example, at the Gunashli and Neft Dashlari oil fields in water treatment plants to reduce health risks in urban Azerbaijan,20 some 8 million tons of CO2e in the form centers. However, wastewater treatment plants also of methane have been reduced over five years (see offer the potential to generate other ancillary benefits Annex 4). The GGFR Partnership has also supported in terms of reuse of water for productive purposes and path-breaking research on BC emissions from gas flares energy generation, if the methane can be captured and (Annex 4). In cooperation with the European Bank for used. As shown in Figure 5, the World Bank’s portfolio Reconstruction and Development (EBRD), the GGFR has not capitalized on the full potential of SLCP Partnership is co-managing a study on associated gas reduction in wastewater management and presents a for Azerbaijan, Kazakhstan, the Russian Federation, and significant opportunity to pursue in the future. Turkmenistan. The study seeks to develop a number of bankable flaring reduction investment projects. 62. The underlying challenge with wastewater management is weak administration, poor governance, and Solid Waste and Wastewater Management 59. Municipal Solid Waste (MSW) affects public health 19 The Global Gas Flaring Reduction public-private partnership (GGFR) is a public- and the environment on a global scale— including private partnership to overcome the barriers to reducing gas flaring by sharing global best practices and implementing country specific programs. the emission of methane, primarily from landfills 20 Report on Assessment of Venting and Flaring Rates at SOCAR Offshore (see Box 7). World Bank solid waste activities aim Production Platforms. 20 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES underfunding, which need to be addressed to deal with SLCP Reduction and Co-benefit Potential—National Scale- Box 7:  the issue of methane emissions in a comprehensive up of MSW Program in Brazil manner. Zero or negative cost carbon wastewater treatment plants are now technically and financially The CAIXA Solid Waste Management and Carbon Finance feasible; however, the technology is advanced and Project being carried out in Brazil offers a basis for considering the SLCP reduction potential nationwide through difficult to access for most middle-income countries. broader replication. The original project involves a US$50 Upfront investment in new facilities can provide rapid million financial intermediary loan to Caixa Exonomica Federal payback. In addition, technically feasible methodologies who will use the funds to leverage private investment to are needed to monitor and track the methane emissions improve the treatment and final disposal of municipal solid waste, while generating carbon finance credits through the from wastewater treatment plants. capture and use of methane. The original loan is estimated to Agriculture and Forestry Sector achieve up to 14.2 million tons of CO2e over a ten-year period, along with improved water and soil quality, the potential for 63. The sources of SLCP emissions in the agriculture and better working conditions of informal waste collectors and forestry sector considered during the review are rice natural resource savings through recycling and composting. In irrigation and livestock manure (which emit methane) scaling up this project to a nationwide program, it is assumed that waste from all open dumps would be diverted to modern and forest fires (which emit BC). sanitary landfills, and a variety of treatment options ranging 64. Forest fire management activities are typically from simple landfills to onsite power generation, intensive included in projects that focus on improving forest sorting and anaerobic digestion, and composting would be applied. These scenarios could reduce methane emissions health, conserving natural resources, or improving by the equivalent of 15 to 29 million metric tons per year agricultural methods through a shift from slash-and- nationwide and additional benefits would be observed, if the burn cultivation. While BC is the SLCP of concern electricity generated is used to offset fossil generation and the from forest fires, it is not yet common practice to compost is used to reduce fertilizer manufacture. assess its emission or impacts (see Box 8). There are In addition to the direct climate and carbon finance benefits of this project (US$300 to 560 million/year at US$20/ton large uncertainties as to whether this intervention has CO2), additional global co-benefits result from the diminished a net warming or cooling influence on a global basis formation of tropospheric ozone, which have health and (see Bond et al. 2013). However, as in the case of other agricultural impacts. Benefits of a Brazilian national MSW biomass related sources of SLCPs, the local health program include 240 to 460 lives saved (avoided premature mortality) globally (3.4 to 6.5 in Brazil) and US$9.4 to US$17.8 effect of fine particulate emissions from forest fires is million of avoided crop losses (US$18,000 to US$34,000 in much more certain. Brazil), depending on extent of MSW program (that is, just 65. Manure management is often included in projects to landfills or including composting and anaerobic digestion component). improve sanitation, improve environmental health management practices on the targeted farms, address While the carbon finance opportunity is quite large, the invest- ment in the Brazilian economy (US$1 to US$2 billion/year) nitrate pollution and provide energy for households coupled with the co-benefits, electricity generation (0.5 to 1.1 or fertilizer for farming. Methane is the main SLCP percent of national power demand), employment benefits (44,000 of concern in manure management. Its potential use to 83,000 new jobs), compost, and recycling products have for cooking in households, for example, has the added additional benefits of between US$8 and US$20 billion on the macroeconomy over the 30-year investment period. benefit of freeing up time spent collecting cooking fuel, especially for women and children, and reducing black carbon emissions with its attendant health risks. 66. The World Bank’s support to rice irrigation projects Some projects have identified the potential for methane is mainly geared at constructing or repairing irrigation mitigation in livestock farming by incorporating various dams and canals to improve competitiveness of measures to abate methane emissions (see Box 8). Such selected domestic supply chains, increase nontraditional projects that are linked to livestock farming represent agricultural exports, and increase rice production in a good opportunity to further expand efforts that project areas. Included in this typology are projects can address the animal waste problem and methane that address improved rice farming methods, such emissions. as the use of high yielding varieties and system of a report prepared at the request of the g8 21 Box 8: Addressing Emissions from Agriculture Air Conditioning, Refrigeration, and Foam and Forestry Projects Conversion Projects 68. Montreal Protocol (MP)-supported projects (including The Mexico Sustainable Rural Development Project (approved in February 2009 and recently extended with additional several addressing short-lived HFCs) are part of the financing until 2016) estimates the reduction of at least 2.0 World Bank’s portfolio. A number of key measures for million tons of CO2e over eight years. This reduction is being addressing HFCs are found in the energy, transport, achieved primarily through 1) establishing and operating building and construction materials, and the industrial almost 500 small, medium, and large-scale bio-digestors (many with additional biogas generators for electricity and consumer product sectors. Examples in the generation) in the dairy and pig-production industries, and 2) transportation sector include the use of standards promoting energy efficient and low emissions technologies with respect to refrigerant choice in mobile air- in existing agribusinesses operating at the various stages of conditioners of new vehicles and trains procured under agricultural production chains in Mexico. The project is also validating and promoting the utilization of alternative forms World Bank projects. Building sector opportunities of solar and biomass utilization, and the quantification and include requirements for green building codes promotion of environmental and economic co-benefits from (including insulation), and implementation of building biomass utilization. certification. The case study in Box 9 from the current The Russia Forest Fire Response Project (approved in MP portfolio demonstrates how HFCs have been September 2012) seeks to improve forest fire prevention and avoided or minimized in the foam production sector. suppression in select forest ecosystems, including targeted protected areas, and to enhance forest management in pilot 69. Furthermore, HFCs could also be addressed by regions. The project is expected to avoid an estimated 215 identifying complementary activities in World Bank million tons of CO2e over a 25-year period (or a 31 percent non-lending activities. For example, support for reduction in emissions over the baseline). Implied in this reduction are avoided black carbon emissions. This has, energy efficiency and greening activities is a point of however, not been accounted for in the project. Assuming a entry for technical assistance that complement energy price of US$10 per ton of CO2 saved, the economic benefit efficiency measures (for example, upgrading/retrofitting from carbon alone could amount to approximately US$2 refrigeration equipment or replacing inefficient ODS- billion over 25 years. This does not include the co-benefits of reduced damage from fires that spread from forest to other based equipment/systems with non-HFC equipment/ landscapes (such as agricultural crops, loss of peat soils, systems). Development of enabling policies and and damaged infrastructure), reduced fire-related deaths and injuries, and health problems. Box 9: HFC Emission Alternatives in Indonesia rice intensification. As Figure 5 shows, rice irrigation presents the potential for reducing methane emissions, A US$2.7 million plan for supporting Indonesia to meet its first however that potential has not been realized because of HCFC phase-out commitments under the Montreal Protocol targets the elimination of 301 metric tons of HCFC-141b a complex set of tradeoffs.21 equivalent to 218 kt of CO2—through industrial conversions at 67. Further opportunities for SLCP abatement exist in foam companies. the agriculture and forestry sector. In countries with The country’s strategy for the first stage of HCFC phase out large production and exports of agricultural, fish, and is to prioritize companies that select low-GWP alternative food products, cold storage and transport presents technologies. HCFC-141b will consequently be replaced by alternatives, such as hydrocarbon in foam production in an opportunity to exclude or bypass refrigerants that the domestic refrigerator and freezer subsectors. However, are harmful to the climate. In the livestock subsector, because of the risks of handling hydrocarbon (HC) technology the World Bank Livestock Roadmap and Action Plan and the high costs of safety measures, HC technology and U.N. Food and Agricultural Organization (FAO) is not always suitable for small enterprises. The project, therefore, found technology that would meet the needs Global Agenda of Action offer an opportunity for of these enterprises and permit them to phase out HCFC mainstreaming the SLCP agenda. use, while minimizing impact on the climate. Thus, in cases where selected enterprises lack the capacity to adopt HC Achieving methane emissions reductions from a wet rice irrigation project would 21 technology, a 50 percent reduced HFC formulation can be depend upon a location that permits guaranteed seasonal drawdown of the water applied. As a result of phasing in HC for the larger enterprises table by gravity. In addition, intermittent aeration could increase emissions of and actively minimizing HFCs in the small enterprises, it is nitrous oxide, another greenhouse gas. Flooding of paddy has the dual function of estimated that nearly 186,000 tCO2e could be avoided. inhibiting weed growth and getting nitrogen —a natural fertilizer—into the root zones. An additional risk of drainage, if not properly managed, is peat combustion Note: 100-year GWP values utilized. which can lead to significant warming. 22 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES capacity for enforcement and monitoring results of the Box 10: Emissions from Development Policy Operations HFC reduction increment would be an essential part of overall integration efforts. In Morocco, a €100 million Urban Transport Sector Development Policy Loan (approved in March) was aimed Development Policy Operations/Lending at, among other objectives, mitigating GHG emissions by 70. Development policy operations are vehicles for policy ensuring that inspection stations test for compliance with change and regulatory measures. They provide a good the stipulated vehicle emission limits, implementing specific actions to enable urban transport operators to submit their opportunity to address complex issues that have fiscal vehicles for regular technical inspections, and defining and implication and require cross-sectoral coordination (for adopting mandatory standards for emissions from the various example, changing fuel-quality standards for diesel). types of new vehicles available on the Moroccan market. This component of the portfolio review evaluated the These measures are most likely to reduce BC emissions from the transport sector. World Bank’s Development Policy Operations/Lending activities (DPOs/DPLs) between FY07 and FY12. The In Peru, the Third Programmatic Environmental Development Policy Loan (approved in August 2010) is assisting the DPOs/DPLs whose development objectives supported government reduce the high levels of particulate matter potentially SLCP-relevant activities amounted to and other air pollutants that are contributing to poor health approximately US$4.8 billion. in Peru’s cities where it is estimated that 3,900 persons die prematurely every year as a result. Specific activities include 71. Support is geared towards increasing wastewater support to the implementation of an effective inspection treatment capacity, reducing forest fires, establishing and maintenance system in Lima and three additional cities national standards to reduce particulate matter through the introduction of information and communication emissions from vehicles, and reducing fugitive emissions system. of methane from oil and gas activities, among other The third development policy operation (DPO-3) in Ghana is examples. While these operations do not directly invest supporting the government as it implements reforms under the Natural Resources and Environmental Governance in infrastructure, there is a direct link between expected (NREG) program (approved in June 2012) aimed at the program outcomes and SLCP emission reductions, for forestry and mining sectors. A component of the program is example in programs directly tackling air quality (see to improve forest health though a significant reduction in the incidence of wildfires, which would reduce BC emissions. Box 10). Such programs could be leveraged to harness opportunities for incremental abatement measures. In addition, there are DPL/DPO programs that do not specifically aim to reduce SLCP emissions but do so indirectly. Figure 6: Number of DPOs and Commitments to DPOs across Regions 10 3,500 Number of DPOs Commitment (million US$) 3,150 8 2,800 Commitment (million US$) 2,450 Number of DPOs 6 2,100 1,750 4 1,400 1,050 2 700 350 0 0 AFR EAP ECA LCR MNA SAR a report prepared at the request of the g8 23 4 Roadmap for SLCP Integration 72. As the portfolio review demonstrates, the World Bank methane reductions can be highlighted to strengthen has delivered an average of nearly US$3 billion a year resolve to tackle SLCPs, without a perceived shift in (US$18 billion in six years) in activities that have the focus. In developing countries, the clear health benefits potential to reduce SLCP emissions. Going forward, of reducing particulate matter are of obvious interest, the World Bank has to work to convert as much of and a focus on health with additional resources for the SLCP-relevant activities in its portfolio into SLCP- SLCP and climate mitigation could enable action and reducing activities. The World Bank can do more to help mitigate the risks. undertake SLCP-reducing activities with strong health and other development benefits and integrate these 4.2 Integrating SLCP Considerations in activities in the World Bank portfolio, including better Decision Making integration with GHG accounting, low-carbon growth 75. Raising awareness internally will help strengthen the strategies, and inclusive green growth planning. Some of integration of SLCP opportunities into decision making the steps are described below. at the World Bank. This integration requires systematic exploration and exploitation of opportunities to reduce 4.1 Raising Awareness the costs of low-carbon economic development, 73. The World Bank can play an important role in without harming the progress towards shared prosperity communicating the importance of SLCPs using and poverty reduction. The World Bank could integrate its convening power with internal and external actions to address SLCPs in its decision making in stakeholders. A growing number of client countries several ways. At the strategic level, it could discuss are interested in addressing SLCPs, as evidenced by SLCP opportunities in County Partnership Strategies the growing membership of the Climate and Clean Air so they are an integral part of the agreed support Coalition (CCAC).22 The strong country-led demand program between the World Bank and client countries. for SLCP reduction demonstrated in this forum, Development policy operations could serve as good together with other global partnerships that the World vehicles for the integration of regulatory or fiscal Bank is active in, could be leveraged to facilitate action measures into emission reduction efforts (Chapter 3). on SLCPs. Such partnerships include the UN SE4ALL, 76. The impetus for action on SLCPs needs to be based the GGFR partnership hosted by the World Bank; on strong analysis. As a knowledge institution, the the UN Food and Agriculture Organization’s Global World Bank could make an important contribution by Agenda for Action (GAA) for a Sustainable Livestock strengthening the analytical base for measuring and Sector being developed closely with the World Bank, valuing SLCP impacts and local benefits but this must the Global Methane Initiative (GMI) that engages more be accompanied by resources to enable appropriate than 40 countries, the UN Foundations Global Alliance staffing for this exercise. This would help inform a for Clean Cookstoves that the World Bank is a partner comprehensive economic evaluation of projects. in, and the Joint Work Program on Cities and Climate 77. The World Bank has a policy that requires project-level Change with UN agencies and others. The World economic analysis (OP 10.4, Economic Evaluation Bank could support these partnerships by sharing its of Investment Operations) and guidance documents experience in reducing SLCPs as an ancillary benefit of for economic analysis that address the inclusion of development projects with synergies between local and environmental externalities (World Bank 1998) and global objectives. climate related co-benefits (World Bank 2010a). This 74. There is some risk that a focus on SLCPs could be evaluation framework—in which the full range of perceived as shifting the onus for climate mitigation benefits from an investment can be weighed against action to developing countries. In high-emitting, high- and middle-income countries, the main focus of climate Thirty governments and 29 non-state partners have become partners in the 22 mitigation should remain the reduction of GHGs, CCAC. The country partners that are the World Bank’s client countries are but the health, agricultural, and ecosystem benefits of Bangladesh, Chile, Colombia, Côte d’Ivoire, Dominican Republic, Ethiopia, Ghana, Israel, Jordan, Mexico, Nigeria, Peru, Poland, and Republic of Maldives. 24 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES alternatives to identify project options that deliver the greatest economic value—is consistent with the World The goal will be to Bank’s operational policy (OP 4.01) on environmental assessment. OP 4.01 requires analysis of alternatives, transform as much of the and along with the Bank’s Environment Strategy (2012a), acknowledges that such alternatives may or may SLCP-relevant activities not be the cheapest option. 78. These policies and guidance documents suggest that as possible into SLCP- analysts should evaluate project costs and benefits, and when necessary, account for opportunity costs reducing activities. associated with environmental degradation and any societal benefits of project alternatives. The multiple benefits associated with SLCP reduction should be included in economic analysis by taking account of the 2010), the World Bank has committed to revisiting its SLCP-related value that extends beyond direct project policies on cost-benefit analysis in a way that recognizes benefits (such as improved health outcomes, agricultural the legitimate difficulties in quantifying benefits, while benefits, or climate benefits) and any incremental costs preserving rigor for project justification. Options associated with SLCP-reducing project alternatives. include development of a map of tools to better Projects targeting urban transport, for example, provide understand the full costs and benefits of projects an opportunity to integrate the reduction of emissions and support and training for staff on the use of of fine particulate matter (which includes black carbon). tools for cost-benefit analysis. This presents a unique Reducing fine particulate emissions through improved opportunity to include SLCP-benefit accounting tools traffic flow is likely also to save lives through improved into this review. air quality and reduced traffic fatalities, improve 82. It is proposed that net SLCP accounting be initiated productivity, and save time,23 while providing fuel across SLCP-relevant sectors, accompanied by savings and CO2-related climate benefits. an estimate of the value of the local and global 79. There are two barriers to applying this evaluation externalities associated with the emission reductions, framework: (1) many of the co-benefits of BC and wherever it makes sense to do so and where these methane reduction are difficult to estimate, and (2) can be reasonably assessed, and that this information the principles of cost-benefit analysis are not always be factored into economic analysis to assess the rigorously followed (IEG 2010). Simplified estimation multiple benefits of projects. In cases where there is methods are needed to balance project planning costs uncertainty about impacts (such as net climate impacts and the precision of cost-benefit calculations. from addressing BC emissions from biomass), it would be important to follow scientific developments 4.3 Addressing Data and Analytical and adjust the evaluation framework as more robust Challenges information becomes available. The methodologies for 80. Projects face major data and analytical challenges; such comprehensive economic analysis will need to both for emissions quantification and for quantifying be simple, cost effective, transparent, and feasible so and monetizing associated development and climate that they can be used by the task teams without high benefits. Emissions data are generally scarce in the implementation costs. World Bank’s client countries. However, estimates may be needed to compensate for data shortages. A study in California showed that improved air quality can translate into increased 23 81. In response to an Independent Evaluation Group’s worker productivity (Zivin and Neidell 2011). review, Cost-benefit Analysis in World Bank Projects (IEG a report prepared at the request of the g8 25 83. Even when data is available, translating emissions Portfolio Co-benefit Analysis: Carbon Finance Box 11:  changes into air quality benefits and assessing the at the World Bank climate impacts is challenging. Economic analysis that accounts for externalities is undertaken for World Bank Data necessary to quantify the SLCP emissions benefit associated with World Bank projects are often lacking with projects, but accounting for the benefits of SLCP certain exceptions. One exception is the portfolio of methane- reduction requires the availability of evaluation tools reducing carbon finance projects. This provides a unique that are not resource-intensive to use. opportunity to further quantify the health and agricultural co-benefits for the entire portfolio of 52 projects. For an 84. New tools are available and are being refined to investment of approximately US$543 million on these projects, quantify and monetize select benefits, such as public US$228 million of direct carbon finance benefits are derived health benefits and avoided agricultural losses. These from the nearly 375,000 tons of methane emission avoided tools could be used to better value SLCP reduction each year. benefits.24 Box 11 shows how some of these tools These benefits are known and included in financial analyses have been used to value health and agricultural co- of the individual projects. However, additional benefits occur that have not been accounted for in economic benefits in the World Bank’s carbon finance portfolio. analysis of the carbon finance portfolio. Using the TM5/ New modeling methods (Carmichael 2008; Henze et FASST tool (developed by the European Commission’s Joint al. 2009) enable the rapid assessment of public health, Research Centre), project-specific methane reductions were agriculture, and even direct climate forcing (Henze et aggregated within the 56 regions of the model and cumulative benefits of the entire portfolio of reductions were calculated al. 2012) for locations around the world. The European and attributed to each region individually. Based on these Commission has also supported research on the modeled calculations, 150 incidences of premature mortality identification of transfer functions that allows a user to were avoided through global improvements to air quality. A estimate evaluation results in different policy and project majority occur in China and India because of their relatively larger populations. Using a U.S. EPA value for a statistical contexts (Maibach et al. 2008). In addition, location- life of a U.S. citizen, this benefit works out to be nearly US$1 specific climate benefits—one tonne of BC reduction billion (the lower earning potential of a typical Chinese or in Mexico may not have the same benefit to the climate Indian citizen will result in a significantly lower monetized system as one tonne of BC reduced in Nepal—can be benefit for these avoided deaths). In addition to the health benefits, nearly 33 thousand tons of crop losses will be estimated in terms of radiative forcing. avoided with a market value of US$5.8 million. As with the Brazil Solid Waste Country Analysis, macroeconomic benefits 4.4 SLCPs, Low-carbon Development, and associated with these productivity gains accrue more broadly Green Growth throughout the economy, but they are normally not accounted for in the carbon finance portfolio. 85. The case studies and examples cited throughout this report illustrate that the reduction of SLCPs yields multiple benefits (public health among them), and that preserve agriculture and ecosystem services, but also addressing SLCP strategies can be complementary through the short to medium timeframe over which the to a low-carbon development agenda. Furthermore, benefits of these measures accrue. the SLCP agenda is also consistent with the World 86. Looking ahead, it is proposed that the synergies Bank’s green growth agenda—defined as growth that between addressing SLCPs, low carbon development, is efficient in its use of natural resources, clean in that and green growth will be assessed and strengthened. it minimizes pollution and environmental impacts, Whether using a classical economic framework or a and resilient in that it accounts for natural hazards and green growth framework, full accounting of the value the role of environmental management and natural of SLCP reduction measures will assist in highlighting capital in preventing physical disasters. The link to the economic and health benefits that low-carbon, green green growth is not only through the benefits afforded growth offers. by reducing air pollution to protect public health and 4.5 Harnessing HFC-related Opportunities 87. HFC programs at the World Bank are somewhat Examples of tools include the U.S. EPA’s BenMAP tool that estimates the health 24 different from traditional lending programs. To leverage impacts and economic benefits occurring when populations experience changes in air quality on the urban or regional scale (BenMAP 2012). Another CCAC- additional HFC reduction opportunities the World Bank sponsored rapid assessment tool is being developed to estimate national-scale could (1) through the Montreal Protocol portfolio, SLCP reduction co-benefits (for health and agriculture) based on the adjoint method of chemical transport modeling. promote non-HFC technologies and lower GWP HFCs where possible, and (2) work across sectors to accelerate 26 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES the growth in the market for non-HFC refrigerants and coolants. Some foundations for this already exist, such An investment of US$543 million on as the Ozone Operations Research Group (OORG), which is a roster of technical experts supporting 52 carbon finance projects by the World Montreal Protocol-related work, and which could Bank to reduce methane emissions 150 be adapted to service a broader array of investment is estimated to avoid: projects that interface with HFC-related issues. 4.6 Expanding the SLCP Agenda 88. While this report has primarily focused on the role of SLCP-relevant activities as they relate to ongoing and future operations, the World Bank is also engaging in analysis of SLCP mitigation actions and their associated development impacts, in collaboration with a number …through global of external partners. In a follow-on analysis to the UNEP/WMO (2011) integrated assessment report, Premature Deaths improvements the World Bank is collaborating with the International to air quality. Cryosphere Climate Initiative to examine the impact of BC deposition on snow and ice regions of the World. A forthcoming World Bank report prepared 33 by the International Council for Clean Transportation examines the costs and benefits of reducing emissions of BC from diesel transportation, taking into account the local and global climate impacts. In addition, through a partnership with the ClimateWorks Foundation, the World Bank is undertaking analytical case studies to demonstrate the multiple benefits of SLCP mitigation. The new information derived from these analyses will strengthen the efforts to transform …with a the World Bank’s portfolio of SLCP-relevant activities market value of to SLCP-reducing activities. Thousand Tonnes of Crop Losses US$5.8 million. 4.7 Stepping-up Action: Access to Finance 89. While the net economic costs of a number of SLCP mitigation measures are zero or negative, they could still 375 potentially carry significant financial costs, and lack of access to finance can prevent these opportunities from being realized. For example, small-scale SLCP reduction opportunities, such as bio-digesters for manure management, are attractive targets from the local development and climate perspective, but investment depends on end-user creditworthiness and access to finance. …emissions 90. Project-based carbon finance has been instrumental in reducing methane and HFCs under the mandate of the Thousand Tonnes each year. Kyoto Protocol. The HFC23 project in China was the of Methane biggest carbon finance operation ever undertaken, and most importantly, it helped establish the framework for further carbon deals in the world’s second largest GHG emitter at that time. a report prepared at the request of the g8 27 25 91. Globally more than 920 million tonnes of CO2e of financial intermediaries as a means of increasing the methane emissions and 473 million tonnes of CO2e potential for reducing BC emissions from small-scale of HFCs emissions are expected to be reduced emission sources. by Clean Development Mechanism (CDM)/Joint 95. Implementation of activities that reduce SLCP Implementation (JI) projects up until the end of emissions and provide climate benefits can be 2012. However, the CDM has demonstrated limited expedited significantly through innovative instruments success in channeling underlying or upfront financing to finance the incremental costs of SLCP mitigation. for some GHG mitigation interventions that employ Harmonization with other multilateral development less mature technologies, target small or dispersed banks (MDBs) will be important when designing sources of emissions, or address sectors (countries) finance mechanisms for such mitigation projects. It will with less conducive investment climates. The CDM’s therefore be necessary to reach out to the MDBs to high transaction costs and its relatively long and minimize conflicting project objectives and duplication unpredictable project cycle are contributing factors, of efforts. together with recent depressed carbon prices. 92. Results-based financing mechanisms have the advantage Box 12: The CIFs and SLCPs of linking funding with the delivery of benefits. This has been demonstrated in some carbon finance projects Clean Technology Fund (CTF): The Clean Technology (for example, municipal solid waste projects that address Fund focuses on large-scale, country-initiated investments methane) where certified emission reductions are issued in renewable energy, energy efficiency, and sustainable based upon monitored and verified methane reductions transport. Projects in the transport sector, which account for 15 percent of the CTF portfolio, are likely to have co-benefits and then traded for revenue. The G8 has suggested a of reducing SLCPs. A number of waste-to-energy and energy pay-for-performance model building on this experience efficiency projects may also generate SLCP co-benefits. to achieve greater methane abatement. Forest Investment Program (FIP): The FIP supports 93. The Partnership for Market Readiness (PMR) provides developing countries’ efforts to reduce or avoid GHG systemic support to enhance countries’ technical and emissions from deforestation and forest degradation, support sustainable management of forests, and enhance forest institutional capacities to implement market-based carbon stocks (Reducing Emissions from Deforestation instruments. The PMR or other similar readiness and forest Degradation-Plus [REDD+]). Activities that have mechanisms could be used to support the preparation co-benefits for reducing the emission of SLCPs include of strategies and plans for reducing SLCPs and agricultural intensification (for example, Brazil), integrated fire management (for example, Indonesia) and the provision delivering climate benefits. of access to alternate energy sources in cities instead of 94. Other innovative climate finance mechanisms, such charcoal (for example, Democratic Republic of the Congo). as the Climate Investment Funds (CIFs), could also Pilot Program for Climate Resilience (PPCR): The PPCR provide sources of upfront financing. While the core supports countries’ efforts to integrate climate risk and mandate of the CIFs is not to address SLCPs, they resilience into core development planning and implementation. Activities that have co-benefits associated with SLCPs include could potentially play a significant role in delivering improved livestock management (for example, Niger), climate- SLCP reduction as a co-benefit (see Box 12). Green smart agriculture (including rice paddies and improved seeds; bonds could potentially generate financing for SLCP- for example, Cambodia), forest ecosystem restoration (for reducing projects and guarantees could underwrite the example, Grenada) and ensuring access to off and on-grid energy to villages. risks for investments. Finance instruments, such as the Program on Scaling up Renewable Energy in Low Global Environment Facility (GEF), blended finance Income Countries (SREP): SREP aims at demonstrating streams, or public-private options that have been the social, economic, and environmental viability of low- instrumental in financing the incremental cost of GHG carbon development pathways in the energy sector and emission reduction, could provide useful lessons on seeks to create new economic opportunities and increase energy access through the production and use of renewable designing financing instruments for SLCP mitigation. energy. Some SREP investment plans include components Additionally, charges for local emissions can make such as waste to energy (for example, Nepal) and improved investments in SLCP reduction self-financing. The Bank cookstoves (for example, Honduras) that could potentially could also use its experience in microfinance schemes reduce SLCPs, such as methane and black carbon. to develop micro-credit programs implemented through 28 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES a report prepared at the request of the g8 29 5 Conclusions 96. This report discusses how IDA/IBRD projects can activities will be articulated as part of the broader incorporate measures that can reduce SLCP emissions climate action planning process which is expected to directly or indirectly so as to maximize the combined conclude in 2014. benefits for local development and climate mitigation. It 98. To better assess the SLCP impact at the project level, makes the case that scaling-up SLCP-reducing activities accounting methodologies are being developed for requires enabling measures to facilitate integration of methane and HFCs, and will be introduced over three actions on SLCP reduction at the Bank, and presents a years starting in FY14 as part of the rollout of GHG roadmap for action. accounting. Assuming that adequate budget will be 97. A review of the World Bank’s lending during FY07 allocated, the Bank will also initiate work on developing to FY12 shows that 7.7 percent of IDA/IBRD and piloting methodologies to account for black commitments (approximately US$18 billion) were on carbon emissions. However, to better integrate actions SLCP-relevant activities in energy, transport, roads, that address SLCP emissions and climate benefits at agriculture, forestry, and urban waste and wastewater. the project level, it is proposed that a comprehensive This level of engagement represents an opportunity economic analysis framework be developed that to transform as much of the SLCP-relevant activities accounts for all the local and global benefits that as possible to SLCP-reducing activities. Specific projects provide due to SLCP emissions reductions. commitments for the World Bank on SLCP reducing Subject to funding, this would be undertaken in Table 3: Proposed Actions to Address SLCP Emissions Topic SLCP actions proposed to be undertaken by the World Bank Commitment to SLCP reduction Transform as much of the SLCP-relevant activities as possible into SLCP-reducing activities; commitments for SLCP-reducing activities to be articulated as part of the climate action planning process, which is expected to conclude in 2014. Outreach and awareness raising Consult with client countries on SLCP issues and strengthen outreach efforts among clients, donors, and partners. Analytical basis for action Strengthen the analytical basis for valuing the local and global impacts of SLCPs, and factoring them into project cost-benefit analysis; develop / map tools to better understand the full costs and benefits of projects. This includes analytical work on i) impacts of BC reduction measures on snow and ice covered regions of the developing World; ii) framework for including the health and climate impact of BC emissions from diesel vehicles in project cost-benefit analysis, and iii) analysis of the multiple development benefits of SLCP mitigation through case studies in select World Bank client countries covering urban transport, solid waste management, manure management, and household energy. Staff capacity Support training for staff on SLCP-related interventions, analytical approaches and use of tools. SLCP accounting Initiate SLCP accounting across SLCP-relevant sectors, with a view to estimating the local and global impacts where it makes sense, and using the information in project cost-benefit analysis; accounting for methane and HFCs to be initiated from July 2013 in some energy and forestry sector projects and rolled out to other relevant sectors and activities over a three-year period; subject to funding, initiate methodology development for BC accounting. HFCs Help countries to transition from HFCs to systems using low-GWP and/or non-HFC alternatives where technically and financially feasible and achieving greater energy efficiency, while introducing longer-term capacity building measures to facilitate adoption of more benign technologies when they do become available. Financing Explore innovative finance opportunities including CDM, results based finance, and potentially CIFs to defray the incremental costs of SLCP reduction where possible. 30 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES tandem with methodology development for BC emissions accounting, since the local benefits for health are driven by reducing BC emissions. A decision on the coverage of projects subject to BC accounting will be taken once there is a better understanding of the resources required to implement evaluation methodologies and the feasibility of collecting requisite data. 4 99. The World Bank Climate Action Plan is expected to provide a timetable for implementation of full SLCP º accounting and comprehensive economic analysis with a focus on multiple development benefits. It is also expected to provide a timeline to track the financing of SLCP-reducing activities at the World Bank. Under the While SLCP umbrella of the Climate Action Plan, the World Bank proposes to work with MDBs to explore options to extend reduction could the harmonized systems for climate finance tracking and GHG accounting to include SLCP reduction (based on the reduce the rate of interest of other MDBs). warming in the coming 100. As a part of strengthening the implementation of the Celsius comprehensive economic analysis framework, the World decades and deliver significant Bank proposes to train staff in the use of tools for SLCP local developmental benefits, accounting and economic evaluation that incorporate environmental externalities (health impacts in particular), immediate and substantial reductions and demonstrate the integration of SLCP reduction in World Bank portfolio. To scale up efforts on the ground, of CO2 and other long-lived GHGs are it is proposed that work be carried out to address project- needed to avoid a 4°C warmer world. level technical barriers, such as the challenge of assessing the timing and location of SLCP emission reductions that maximize multiple benefits; as well as policy and regulatory barriers, such as the lack of a roadmap to capture and use gas from wastewater treatment. Annex 6 provides examples of activities that could enable scaled-up action, if coupled with appropriate financing instruments. 101. Table 3 summarizes the proposed actions to address SLCP emissions articulated in this report. The climate action planning process‑—expected to conclude in 2014— will further highlight the key priorities and commitments on SLCP mitigation action at the World Bank. 102. Finally, while SLCP reduction could reduce the rate of warming in the coming decades, over the long run, it makes only a modest contribution to climate change mitigation. As UNEP (2011a) underscores, immediate and substantial reductions of CO2 and other long-lived GHGs are needed to avoid a 4°C warmer world. However, SLCP reduction can deliver significant local development benefits, particularly for human health, which provides a strong impetus for taking action. a report prepared at the request of the g8 31 6 References Amann, M., I. Bertok, J. Borken-Kleefeld, J.Cofala, C. Heyes, L. Höglund-Isaksson, Z. Klimont, B. Nguyen, M. Posch, P. Rafaj, R. Sandler, W. Schöpp, F. Wagner, and W. Winiwarter. 2011. “Cost-effective Control of Air Quality and Greenhouse Gases in Europe: Modelling and Policy Applications. “Environmental Modelling and Software, (In press) doi:10.1016/j.envsoft.2011.07.012. BenMAP. 2012. See details at: http://www.epa.gov/airquality/benmap/index.html. 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Zivin, Graff, and Joshua Neidell. 2011. “The Impact of Pollution on Worker Productivity,� Working Paper 17004, Cambridge MA: National Bureau of Economic Research, April. a report prepared at the request of the g8 33 Annex 1 Development Benefits of SLCP Reduction Air Pollution, Visibility, and Infrastructure nonmethane hydrocarbons, and nitrogen oxides (that are BC and tropospheric ozone are air pollutants that are part of the chemical reactions that produce ozone). At ubiquitous in the modern urban and rural environment. high concentrations, ozone is phytotoxic and leads to crop BC emissions are detrimental regardless of where they losses. More than half of the increase in ambient levels of are emitted, although emissions in populous areas have background tropospheric ozone is estimated to result from greater public health effects and emissions at high latitudes anthropogenic emissions of methane, making it a prime have greater effects on the cryosphere. SLCP reduction target for emission reduction. benefits are often nonlinear in terms of the location and Ecosystem Services timing of reductions as well as the specific co-pollutants reduced, making it difficult to quantify the precise benefits There is evidence that tropospheric ozone pollution of a given reduction intervention. There are many other reduces crop productivity and natural vegetation (UNEP benefits of improved air quality, including visibility, reduced 2011a). It can impact the occurrence and severity of natural infrastructure damage, reduced acid deposition, and other disturbances (for example, fire or erosion) by affecting welfare-related benefits (USEPA 2001; USEPA 2006). water balance, cold hardiness, and tolerance to wind, and However, the main driver for air quality improvement by predisposing plants to insect and disease pests. This programs has been the public health effects discussed can result in a loss of biodiversity as well as decreased below (WHO 2005). ecosystem resilience to both extreme events and natural or human disturbances. Public Health Energy Efficiency High ambient concentrations of tropospheric ozone and fine particles pollutants can significantly increase the risk Certain energy efficiency projects—such as regulatory of many respiratory and cardiac health endpoints, including reforms, improved building codes, appliance efficiency asthma and heart attack (USEPA 2001). Ozone is a strong standards or retrofits to meet new standards—are oxidant and respiratory irritant. It can damage the surface conducive to HFC emissions reduction given that HFCs of the lungs and the lining of the esophagus (USEPA are often found in heating and cooling equipment that 2006). Fine particles come in a range of sizes, but the contribute most to energy demand in residential and smallest particles, smaller than two and a half microns in commercial settings. Whether motivated by the opportunity diameter, PM2.5, can penetrate deeply into the lungs where to reduce or minimize HFC impacts, or the energy savings it is easier for the chemicals incorporated into the particles potential, HFC reductions and energy savings go hand in to pass into the blood stream (USEPA 2001). Black carbon hand because of both the energy intensity of typical HFC is only one component of fine particulate matter, but diesel utilizing equipment and the opportunity to minimize HFC combustion and traditional cookstoves can lead to particles impacts when embarking on energy efficiency activities. of almost pure BC that are smaller than 1 micron. The In addition, BC emissions fundamentally arise from public health effects of these emissions are particularly incomplete combustion of organic matter. To the extent dangerous given their size and toxicity. The health effects that combustion efficiency can be achieved, BC emissions of BC per unit mass have been shown to be greater than will be reduced as a fraction of particulate matter with a undifferentiated PM and are more robustly associated with potential reduction in CO2 emissions. short-term illness (WHO 2012). Carbon Finance Agricultural Impacts Methane and HFCs reductions may have additional carbon- BC can significantly alter regional climate-energy offset value associated with greenhouse gas emission interactions and affect rainfall patterns, leading to impacts reduction under the CDM and voluntary markets, and on agriculture. Tropospheric ozone as a secondary could be assigned a market price in addition to other non- pollutant requires reductions in emissions of precursor climate benefits (in the case of methane). pollutants, such as methane, carbon monoxide, other 34 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Annex 2 Key Short-lived Climate Pollutants, Their Primary Climate Effects, and Estimates of Their Warming Potential Black Carbon it is rained out or settles out of the air. BC particles’ light Black carbon (BC) affects the global climate system in absorbing properties may darken the surface when settling multiple ways that are more complicated than for long- on snow or ice. This increases snow and glacial melt, lived GHGs. Part of this added complexity is because BC enabling strong feedback with land and ocean surfaces is a particle consisting of many compounds rather than a that may otherwise reflect sunlight. Many arctic regions are molecule, interacting differently with light and heat. BC has now able to absorb significant quantities of heat for whole a direct radiative impact (absorption of light and converting seasons because of early season melting of snow cover it to heat), affects snow and ice when it settles out of the (World Bank 2011a). The regional specificity of impacts atmosphere, and alters cloud properties. These processes suggests that BC emission reduction near the Arctic, the are discussed below. Himalayas, and other snow and ice covered regions will have a greater relative benefit than reductions elsewhere Radiative Effects (USEPA 2012b). The overall radiative forcing of this effect BC is similar to carbon dioxide (CO2) and other long-lived is estimated most recently as +0.13 W/m2 (range: +0.04 - GHGs in terms of its light absorbing properties that allow +0.33 W/m2; Bond et al. 2013). it to convert light energy to heat and warm the air around Cloud Properties it. However, BC acts much more intensely than CO2 for a much shorter time. Light is absorbed by BC particles and BC can significantly influence cloud properties. BC may be re-radiated in a similar manner to black objects, such as incorporated in clouds either as additional condensation pavement. When BC particles are suspended in the air, light nuclei seeding the formation of clouds, or by adding to that would otherwise be absorbed or reflected at ground existing nuclei, which may spread the same moisture across level may be redistributed higher in the atmosphere. BC a greater number of cloud droplets. Clouds with a high may reduce the amount of light reflected back into space, fraction of black carbon may be less reflective than normal depending on the reflectivity of the underlying surface clouds, rise to different atmospheric levels, and alter rain and how BC is mixed with other particulate matter and the cycle frequency and location. BC particles contribute to the particle size. The direct radiative forcing of black carbon formation of atmospheric brown clouds (ABCs) with large has most recently been estimated at +0.71 W/m2 (range: regional climate impacts, including shifting rainfall patterns +0.09 - +1.26 W/m2; Bond et al. 2013), significantly greater and temperature gradients. ABCs have been implicated than the 2007 estimate of +0.34 ± 0.25 W/m2 (IPCC in the changes in the South Asian monsoon and rainfall 2007). To put this in context, the total anthropogenic patterns over eastern China (Ramanathan and Carmichael forcing on the earth’s climate was estimated at +1.6 W/m2. 2008). The way BC interacts with clouds has the greatest uncertainty relative to other modes of forcing and remains Interaction with Snow and Ice an active area of research. The latest assessment puts the Fundamentally different from long-lived GHGs, BC global estimate of radiative forcing associated with BC remains in the atmosphere for one to two weeks before cloud interactions at +0.23 W/m2 (range: -0.47 to +1.0 Annex Table 1: Estimated Global Radiative Forcing Resulting from Black Carbon Emissions IPCC Ramanathan and Bond et al. USEPA Forcing type Carmichael* UNEP (2011) Bond et al. (2013) (2007) (2011) (2012) Direct atmospheric 0.34 0.3–0.6 0.4 0.34–1.0 +0.71 (+0.09–+1.26) Snow/Ice 0.1 0.05–0.25 0.05 0.05 +0.13 (+0.04–+0.33) Clouds -0.4–0.4 +0.23 (-0.47–+1.0) Cumulative 0.9 0.6 (range: 0–1.0) +1.1 (-0.17–+2.1) Including OC sources 0.15 0.41* 0.27 (direct effect only) Including coemissions -0.06 (-1.45– +1.29) of BC sources Including all aerosol -1.2 -1.4 species *UNEP/WMO assessment includes both the direct radiative effect and snow/ice impacts of the sum of BC and OC. a report prepared at the request of the g8 35 W/m2; Bond et al. 2013). Many studies and reports have compared to a molecule of CO2 acting over 100 years.25 not quantified the radiative forcing of cloud interactions, Methane also has an indirect influence on the climate citing large uncertainties, which makes these new results system as a precursor pollutant that aids in the formation particularly important. of tropospheric ozone, which is a greenhouse gas. Ozone According to the Black Carbon Bounding Study (Bond et is a common air pollutant causing significant public al. 2013), the total cumulative radiative forcing associated health concerns and increasing the disease burden. It with all BC effects relative to preindustrial times (see Annex damages plant tissue and crops lowering agricultural yields. Table 1) is estimated at +1.1 W/m2 (range: +0.17 – +2.1 Background levels of tropospheric ozone have tripled over W/m2), making it the second largest anthropogenic forcing the past several hundred years, in large part because of the next to CO2. global increase in methane emissions (ClimateWorks 2011). The IPCC estimates the radiative forcing of methane at Net Impact Accounting for Co-emitted Species +0.48 W/m2 and tropospheric ozone at +0.35 W/m2 The above estimates capture the total climate forcing (IPCC 2007). from black carbon acting alone. However, black carbon Short-Lived HFCs is seldom emitted alone, and what matters in assessing projects is the combined effect of the emissions of black HFCs are increasingly replacing ozone-depleting substances carbon and the co-emitted species. The latter include (ODS) phased out by the Montreal Protocol,26 and their organic carbon (OC) and sulfate aerosol precursors. Most use is also increasing with rising demand for HFC-based BC from biomass burning, open burning, and forest fires air conditioning. Some HFCs have direct application is co-emitted with substantial OC. While BC is relatively in industry and others are unwanted byproducts in the dark and absorbing, OC is significantly lighter and tends to manufacturing of other fluorinated chemicals.27 HFCs reflect light back to space and may have a cooling influence; typically have lower lifetimes than their chlorofluorocarbon hence, teasing out the role of BC specifically from these (CFC) counterparts with similar global warming potential activities is complicated (World Bank 2011a). While fossil (that is, thousands of times greater than CO2). fuel combustion emits far less OC, sulfur in the fuel has Because of their relatively shorter atmospheric lifetime, a cooling effect, so that fuel with high sulfur may have HFCs affect the climate for months to years, not centuries net negative climate forcing. Table 1 includes additional or millennia. The radiative forcing of short-lived HFCs rows that demonstrate a significant difference in radiative (with lifespans of up to 15 years) varies by gas. The IPCC forcing when various components of co-emitted species estimated the radiative forcing of HFC-134a at +0.0055 are included in these estimates. Bond et al. (2013) is the W/m2 and HFC-152a at +0.0004 W/m2 in 2005. While only paper to comprehensively assess the effect of co- the HFC relative contribution to climate is currently lower emitted species for BC-rich sources in isolation and the net than other such SLCPs as methane and black carbon, their forcing is -0.06 (-1.45, +1.29). Other estimates looked at importance is expected to grow and increase radiative the combination of BC and OC (but without sulfates) or forcing by up to +0.4 W/m2 by 2050 (relative to 2000) all aerosol species (including indirect effects) whether they under current business as usual conditions. Much of this come from BC-rich sources or not. will occur in developing countries. Methane (and Tropospheric Ozone) 25 As per the IPCC, the Global Warming Potential for methane is 72 over a 20-year period Methane is a potent GHG and behaves perhaps most and 7.6 over 500 years. (http://www.ipcc.ch/publications_and_data/ar4/wg1/en/ similarly to the long-lived GHGs of all the SLCPs. Given tssts-2-5.html) the fact that its lifetime in the atmosphere is about 12 The greatest current manufacturing use of HFCs is as a replacement to HCFC-22 in 26 residential air-conditioning and as the dominant coolant in vehicle cooling systems. years rather than several hundred, it is categorized as a European and North American markets are nearly entirely HFC-based with an SLCP. Despite its short life, each molecule of methane is obligation to phase-out of 90 percent of HCFC consumption by 2015. 27 For example, HFC-23, although long-lived, is produced as a by-product of HCFC-22 25 times more powerful than a molecule of CO2 in terms manufacture, and is generally of no use otherwise—with very limited exception as a fire of its potential to warm the planet, when its influence is extinguishing agent and refrigerant. 36 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Annex 3 Short-Lived Climate Pollutants— The East Asia and Pacific Example Transportation: Unmanaged growth in transportation demand is causing significant economic impacts from lost man hours, additional fuel consumption, increased health costs, a large number of traffic fatalities, and lost investment opportunities. Urban air pollution has become a critical issue for many large cities in East Asia. The World Bank has been providing assistance in the elimination of high BC-emitting vehicles from the diesel road-vehicle fleets and the establishment of tighter vehicle emissions standards. The Cebu Bus Rapid Transit Project (US$222.5 million), currently under preparation, will reduce emissions through a new BRT System with East Asia is a nonhomogenous region with tremendous new buses that will meet the Euro IV emissions geographic, climatic, and economic diversity that is standards. The project is expected to reduce PM emissions reflected in the diversity of the World Bank’s lending by 347 to 497 tons, leading to monetary savings of US$269 portfolio across the region. The World Bank has to US$385 million. The Guangzhou Green Trucks Pilot considerable experience implementing projects and Project (2010) demonstrated that fuel costs for long-haul providing technical assistance to East Asian countries on trucks could be decreased by 6.6 percent and for garbage issues that reduce SLCPs, while focusing on improved trucks by 18.5 percent. If these improved efficiencies were health and increased wealth for local communities. scaled to all Guangdong heavy-duty trucks, through the Household Energy: Approximately 50 percent of East Guangdong Green Freight Demonstration Project (US$14 Asia’s population uses solid fuels (coal, wood, dung, million) the PM10 reductions would equal 1,218 tons per and agricultural residue) as their primary cooking fuel. year. It is estimated that in East Asia alone, 665,000 people Livestock Waste Management: The East Asia region die prematurely every year because of coal and wood contains more than half the world’s stock of pigs and burning for cooking purposes. There is an ongoing Clean more than one-third of the world’s poultry. The World Stove Initiative that supports capacity building and policy Bank partnered with FAO to complete the Livestock Waste development for scaling up access to clean and efficient Management Project (US$24 million) in China, Thailand, stoves. There are also country-specific initiatives in China, and Vietnam to reduce the major negative environmental Indonesia, and Lao People’s Democratic Republic. Recently and health impacts of rapidly increasing concentrated completed technical assistance projects in Timor-Leste and livestock production. In Vietnam, it is estimated that Cambodia add to the World Bank’s technical expertise in methane-caused eye diseases were reduced from 24 this sector. In addition, the World Bank is working with percent to 12 percent, and respiratory diseases dropped the government of Mongolia in a US$22 million project to from 18 percent to 6 percent among participating farm enable Ulaanbaatar consumers to access heating appliances workers and neighboring communities before and after that produce less black carbon emissions. A one-time project. Currently China is partnering with the World Bank investment, replacing traditional stoves with clean stoves, to invest US$100 million in the Guangdong Non-point could reduce particulate matter emissions by 95 percent Pollution Control Project. Furthermore, the World Bank for each new stove used. World Bank studies estimated has the US$80 million China Eco-farming Project and the that annual benefits would amount to US$515 per stove US$79 million Vietnam Livestock Competiveness and Food replaced. Safety Project that also finance the installation of methane recovery from livestock operations. a report prepared at the request of the g8 37 Annex 4 GGFR Supports Oil and Gas Venting Reduction Projects and Better Data Collection In Azerbaijan, SOCAR, its national oil company, vented to Between both projects, the GGFR partner in Azerbaijan the atmosphere about half a billion cubic meters of natural was able to prevent the venting of 8 million tons of CO2e. gas, roughly one-fifth of all associated natural gas produced A key data need with respect to BC from flaring is along with oil. In 2008, SOCAR joined the World Bank-led improved emission factors for BC emissions from gas Global Gas Flaring Reduction (GGFR) partnership. As a flares. The GGFR and its member partner in Mexico, result, SOCAR undertook venting reduction projects at Petroleos Mexicanos (Pemex), have supported pioneering the fields of Neft Dashlari and Gunashli. Both of these research to advance the measurement of black carbon projects involved the recovery and utilization of low from flares stacks. Flaring is implicated as a potentially pressure associated gas previously vented. critical source of black carbon emissions. The sky-LOSA At the Gunashli oil field, some 310 million cubic meters technique for directly quantifying black carbon emission of low pressure associated gas (mostly methane) were rates in flares under field conditions is based on Line-Of- annually vented to the atmosphere. New compressor Sight Attenuation (LOSA) of natural light and enables stations and gas pipelines and extensions of offshore accurate quantification of black carbon mass emission installation infrastructure were installed allowing vented gas rates in atmospheric plumes of flares. In this study, the to be delivered to end-users. The project reduced some 4.2 flare stack was emitting black carbon roughly the equivalent million tons of CO2e (see platform image below). The Neft to emissions from 14 diesel buses running continuously. Dashlari oil field vented some 280 million cubic meters of This finding is very encouraging for the prospect of future associated gas. This project collected low pressure gas and efforts to significantly improve current emission factor transported it to an existing onshore gas processing plant. approaches for estimating flare generated black carbon SOCAR and Gazprom Germany GmbH implemented this emissions. project, resulting in 280 million cubic meters of gas capture and utilization, which contributed to reducing some 3.8 million tons per annum of CO2e. Annex Figure 1: Gas venting reduction forecast 700 578.4 584.3 600 511.6 527.7 487.4 500 455.7 407.1 435.0 431.1 494.0 Million m3 400 407.1 Baseline 387.4 300 Real Emissions 200 276.4 74 Forecast 100 120.4 7.4 7.4 7.4 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 38 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES , __ -, a report prepared at the request of the g8 39 Annex 5 World Bank Municipal Solid Waste Management: Analysis of Methane Reduction Opportunities and Nationwide Scale-up Along with rapid urbanization and population Annex Figure 2: World Bank Investment in SLCP-reducing MSW Projects (2007-12), growth, Municipal Solid Waste (MSW) Including Number of Projects generation from the world’s cities is increasing $700 25 27 at unprecedented rates—from 1.3 (in 2006) to 2.2 billion tons of MSW (by 2025)—and $600 6 4 all of this growth is in developing country 17 Investment (US$ millions) $500 cities. World Bank solid waste activities aim to improve waste management where the need $400 22 is growing most, and where the services are grossly underfunded; the annual budgetary $300 shortfall in the cities of World Bank client $200 countries is US$40 billion.28 Though more visible as a local problem, MSW $100 affects public health and the environment on a global scale—most notably by emitting $0 Disposal Collection Recycling Compost PM/TA* Total methane, mostly from landfills. Properly *PM/TA referes to project management and technical assistance costs. managing waste to minimize methane emissions offers a variety of local and global reduce SLCP emissions, through increased collection, co-benefits. People who live near or work with solid improved disposal, landfill gas collection, increased waste have increased disease burdens.29 Globally, post- recycling, or composting.31 Most World Bank MSW consumer waste is an emerging contributor to climate projects focus on collection and disposal, often considered change, emitting 5 percent of global GHGs and 12 percent the most crucial elements of MSW management, and of methane. However, waste has the potential to be a net the most important sources of SLCP emissions. Of the sink of GHGs when used as a resource, through recycling 27 projects, most (22) are focused on disposal (US$379 and reuse.30 Uncontrolled burning of waste also affects million) and collection (US$122 million); a small number the global environment, by emitting black carbon, dioxins, (10) address waste reuse and recycling (US$46 million), and and furans—globally mixed persistent organic pollutants US$7 million for composting. These results are summarized (POPs) that are toxic to humans and the environment. in Figure 2 above. Properly managing waste to minimize methane emissions In future, the Bank should fund more upstream activities, also leads to improved water, air, and soil quality. focused on reducing waste generation and increasing source Although methane emissions only occur at the point of separation. These activities allow for the maximization treatment and disposal, efforts to reduce those emissions of waste-to-resource technologies, such as composting can occur at every stage in the value chain: planning, and anaerobic digestion. Upstream activities also offer waste generation, collection, treatment, and disposal. For co-benefits such as extending the useful life of a landfill, example, designing incentive schemes to promote lower reducing fossil fuel consumption, improving air, soil and waste generation and increased source separation reduce water quality. A comprehensive, integrated approach in the amount of methane produced in a landfill (and other the solid waste sector would improve service delivery and GHGs downstream in the value chain), and prevent other public health, while reducing methane emissions. sources of SLCP (and GHG) emissions, by displacing the use fertilizers for agriculture and to natural gas for Hoornweg and Bhada-Tata 2012. 28 electricity. Giusti 2009. 29 Bogner et al 2007 30 Over the last six years (2007–12), the World Bank has This tally includes only World Bank investment projects, and thus excludes carbon 31 invested in 27 projects (US$642 million) that potentially finance projects, of which there are many that address landfill gas collection. 40 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Case Study: Brazilian Nationwide Annex Figure 3: Lifecycle Methane Emissions for Five Scenarios for Management of Brazil’s Solid Waste, in kg CO2e/year. Scale up. To demonstrate the potential (Anaerobic digestion and composting offer the largest reductions.) efficacy of the integrated solid waste management approach described 4.0E+10 above, national emissions reduction 3.5E+10 potential has been calculated assuming 3.0E+10 the nationwide scale up of one model 2.5E+10 project. This case study shows that 2.0E+10 broad emission reductions can be 1.5E+10 achieved across the solid waste value 1.0E+10 chain relative to scenarios that target 5.0E+09 only one area, such as sanitary landfills. 0.0E+00 Baseline All LF All LF- Anaerobic Compost The model project selected is the electricity Digestion integrated solid waste management and carbon finance project. The World Bank is providing a Financial Annex Figure 4: Life-cycle GHG Emissions (CO2e/year) for all Scenarios Intermediary Loan of US$50 million (Anaerobic digestion and composting offer the greatest emission reductions.) to Caixa Economica for on-lending to borrowers with solid waste subprojects 1.5E+10 in Brazil. The project overall aims to 1.0E+10 improve the treatment and disposal 5.0E+09 of municipal solid waste; its success is 0.0E+00 measured by the number of open dumps Baseline All LF All LF- Anaerobic Compost -5.0E+09 electricity Digestion closed, the increased volume of waste -1.0E+10 disposed in sanitary landfills, and the Treatment, Recovery and Disposal Phase -1.5E+10 increase in volume of waste composted Transportation Phase and recycled. Methane reductions from -2.0E+10 Collection Phase improved solid waste management in -2.5E+10 Brazil are estimated, assuming a scale-up of this project to cover the entire nation of Brazil. equivalent to Belgium’s CO2 emissions from transport in Implementing these organic waste treatment technologies 200832). However, in order for these waste-to-resource on a large scale could reduce methane emissions by 29 technologies to be used on a large scale, major investments million tons of CO2e per year (assumes effective source need to be made upstream of the technologies, in waste separation of organic waste, no market for compost [no reduction, and source separation. Without separation substitution for fertilizer], and electricity produced displaces of waste at the household level, neither composting nor natural gas on the grid). anaerobic digestion is economically feasible. An integrated Anaerobic digestion and composting—which have yet to approach to waste management that considers every step be used successfully at large scale for waste management in the waste value chain, from waste generation in the in developing nations—offer the potential for the largest household through final disposal, is needed in order to GHG reductions, of 30 million tons and 26 million tons of effectively manage waste as a resource. Doing so would lead CO2e per year. to a variety of environmental and public health benefits, including a large reduction in methane emissions. It is found that improved organic waste treatment, through anaerobic digestion and composting, offers the greatest 32 World Bank. 2012. “CO Emissions from Transport.� Accessed potential for methane reduction from solid waste for Brazil, 2 12/7/12. http://data.worldbank.org/indicator/EN.CO2.TRAN.MT on the order of 30 million tons of CO2e per year (roughly a report prepared at the request of the g8 41 Annex 6 Activities to Enhance SLCP Reduction Opportunities Examples of Actions* that Could Contribute to SLCP Emission Reduction Typology Technical Policy Regulatory Roads Differential toll tax for Engineering design to reduce Urban low emission vehicles or High occupancy vehicle lanes rolling resistance on roads congestion mitigation Development of auto-fuel road Engineering design to reduce Rural and Interurban map for cleaner fuels and Green freight program for fleets rolling resistance on roads better technology Urban Transport Development of auto-fuel road Retrofitting emissions reduction Standards for fuels and Bus-based map for cleaner fuels and devices where feasible emissions better technology Electric traction with Fare rationalization to facilitate Rail-based regenerative braking where inter modal transfers feasible Traffic Management and Automatic vehicle inspection Bike lanes and pedestrian Mandatory emission testing Emissions Control systems pathways linked to insurance renewal Energy Create incentives for Develop improved standards Promote Improved and Development of advanced manufacturers to improve for energy efficiency and Clean Cookstoves cookstoves technology and reduce costs emissions Brick Kilns (technology Tax breaks for manufacturers Standards for energy efficiency Promotion of low emitting kilns upgrade) to develop low emitting kilns and emissions 42 INTEGRATION OF SHORT-LIVED CLIMATE POLLUTANTS IN WORLD BANK ACTIVITIES Examples of Actions* that Could Contribute to SLCP Emission Reduction Typology Technical Policy Regulatory Technical, safety, quality Design of bio-digesters that Incentive programs for LPG/ LPG / Biogas (fuel switching) standards or other market- minimize leakage biogas systems enabling measures Support the development of downstream gas usage Development of technology to Gas pricing policy that enables Penalties for flaring; regulations Gas Flare Reduction monitor flare emissions capital investment for gas that minimize flaring gathering, treatment, and transmission Gas pricing policies to Promote technology for leak Tariff-setting policy that encourage leak prevention and Methane Leak Reduction detection penalizes large leaks regulatory roadmaps aimed at leak reduction Municipal Solid Waste Development of an integrated Replace old diesel trucks Waste separation to maximize solid waste management with cleaner, fuel efficient anaerobic digestion and plan (waste reduction and trucks; technical assistance composting (as well as Waste Collection separation, collection, to promote proper vehicle recycling), through incentive disposal, recycling, maintenance to reduce BC payments, behavior change composting) including emissions campaigns financing modalities Fine for open dumping of Sanitary landfill design that municipal waste; incentivizing Disposal facilitates gas recovery/ proper disposal. Mandate LFG utilization collection for all landfills. Recycling Material recovery facilities Integrating the informal sector Compost facilities; waste Mandate the utilization of Composting separation facilities compost produced *In the above table, technical opportunities are more likely to be integrated into project design and/or safeguards consideration. Policy and regulatory solutions would likely be achieved through client country actions and/or DPL/DPO lending. In addition to the activity-specific approaches to SLCP reductions listed in the table, the authors note that there are several policy approaches that might be pursed at the sector level as opposed to the activity level, such as clean fuels programs, integrated waste management, or sustainable agriculture plans. Such opportunities will require greater coordination across government institutions, broader engagement of stakeholder groups, and a greater focus on technical capacity to ensure that these transformative concepts can successfully take hold where needed. a report prepared at the request of the g8 43 The World Bank 1818 H Street NW Washington DC 20433, U.S.A. Telephone: 202-473-1000 Fax: 202-477-6391 Internet: www.worldbank.org/climatechange