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towards the Partial Risk Sharing Facility for Energy Efficiency Project. 3.2
The project has the potential to leverage funds and unlock private
sector financing to over three-times of the World Bank funds. It will also
help build the capacity of ESCOs to structure and seek financing; and
that of financial institutions to finance EE projects on a commercially-
sustainable basis.9
Although the atmosphere surrounding financing for low carbon
transitioning technologies is improving, yet it is still fraught with
uncertainties and risks which are preventing lending at a larger scale.
There is a need to look out for more risk management tools for low
carbon development in India.
2.2.4 Climate Change and Market-based Instruments
International Carbon Markets
The global carbon market grew rapidly from 2005 until 2011, from
an initial value of USD 11 billion to USD 176 billion after which
prices in the major existing markets were at a historic low. Prices in
the EU ETS—the largest carbon market—remained in the depressed
range of about USD 5–9 in 2013 as compared to USD 13 three years
ago. Similarly, Kyoto credit prices also reached their lowest in 2013
and 2014, with Certified Emission Reductions (CERs) worth just
USD 0.51. The private sector experienced significant losses and as
they remain reluctant to engage, robust consensual and international
solutions are required to revive private sector confidence in the global
carbon market.
Progress across the globe is however steadily increasing; eight
new carbon markets opened their doors in 2013 alone. According to
the World Bank (2014), about 40 national and over 20 sub-national
jurisdictions are putting a price on carbon. It estimates the world’s
emission trading schemes to be USD 30 billion (it doesn’t include
the Kyoto Protocol international emission trading) in 2013. Point
Carbon at Thomson Reuters estimates that the global carbon market
is set to near Euro 70 billion (approx. USD 79.1 billion)10 in 2015
after strong growth in 2014 when it reached Euro 45 billion (approx.
USD 50.85 billion).
Flexible mechanisms were established, under the Kyoto Protocol
(KP), to provide industrialized countries alternatives to reducing
9 Press release, The World Bank. Available at http://www.worldbank.org/
en/news/press-release/2015/03/31/partial-risk-sharing-facility-energy-
efficiency-singing
10 For currency conversion purposes: I Euro = 1.13 USD
Chapter 2 Innovative Financing for Low Carbon Development 263
The project has the potential to leverage funds and unlock private
sector financing to over three-times of the World Bank funds. It will also
help build the capacity of ESCOs to structure and seek financing; and
that of financial institutions to finance EE projects on a commercially-
sustainable basis.9
Although the atmosphere surrounding financing for low carbon
transitioning technologies is improving, yet it is still fraught with
uncertainties and risks which are preventing lending at a larger scale.
There is a need to look out for more risk management tools for low
carbon development in India.
2.2.4 Climate Change and Market-based Instruments
International Carbon Markets
The global carbon market grew rapidly from 2005 until 2011, from
an initial value of USD 11 billion to USD 176 billion after which
prices in the major existing markets were at a historic low. Prices in
the EU ETS—the largest carbon market—remained in the depressed
range of about USD 5–9 in 2013 as compared to USD 13 three years
ago. Similarly, Kyoto credit prices also reached their lowest in 2013
and 2014, with Certified Emission Reductions (CERs) worth just
USD 0.51. The private sector experienced significant losses and as
they remain reluctant to engage, robust consensual and international
solutions are required to revive private sector confidence in the global
carbon market.
Progress across the globe is however steadily increasing; eight
new carbon markets opened their doors in 2013 alone. According to
the World Bank (2014), about 40 national and over 20 sub-national
jurisdictions are putting a price on carbon. It estimates the world’s
emission trading schemes to be USD 30 billion (it doesn’t include
the Kyoto Protocol international emission trading) in 2013. Point
Carbon at Thomson Reuters estimates that the global carbon market
is set to near Euro 70 billion (approx. USD 79.1 billion)10 in 2015
after strong growth in 2014 when it reached Euro 45 billion (approx.
USD 50.85 billion).
Flexible mechanisms were established, under the Kyoto Protocol
(KP), to provide industrialized countries alternatives to reducing
9 Press release, The World Bank. Available at http://www.worldbank.org/
en/news/press-release/2015/03/31/partial-risk-sharing-facility-energy-
efficiency-singing
10 For currency conversion purposes: I Euro = 1.13 USD
Chapter 2 Innovative Financing for Low Carbon Development 263
