The World Bank has revealed ambitious plans aimed at propelling the growth of high-integrity global carbon markets.
This initiative involves 15 countries poised to generate revenue from the sale of carbon credits, derived from their efforts to preserve forests.
By the upcoming year, these nations are anticipated to produce over 24 million credits, with projections soaring to as many as 126 million by 2028. In favorable market conditions, this could translate into a potential earnings figure of up to $2.5 billion, a substantial portion of which will be reinvested into communities and countries involved.
The 15 countries — Chile, Costa Rica, Cote d’Ivoire, Democratic Republic of Congo, Dominican Republic, Fiji, Ghana, Guatemala, Indonesia, Lao PDR, Madagascar, Mozambique, Nepal, Republic of Congo, and Viet Nam — are integral components of the World Bank’s Forest Carbon Partnership Facility (FCPF), World Bank said.
Since 2018, this initiative has provided critical support in establishing efficient frameworks for carbon-crediting endeavors, with the World Bank slated to collaborate with governments and local communities in aiding five additional countries by 2024. By 2028, all 15 FCPF countries are anticipated to engage actively with carbon markets.
Distinguishing these World Bank carbon credits are two crucial elements:
Environmental Integrity: These credits adhere to stringent criteria, ensuring they are unique, authentic, additional, permanent, and measurable.
Social Integrity: Priority is placed on ensuring that communities, particularly Indigenous Peoples and Local Communities, derive significant benefits from these programs.
Each carbon credit undergoes rigorous monitoring, reporting, and verification by a third party, complying with the World Bank-managed FCPF Standard and World Bank Environmental and Social Standards. Leveraging cutting-edge technology, these programs encompass entire jurisdictions, safeguarding reforestation and conservation efforts from potential deforestation elsewhere.
The Bank aids countries in strategizing the utilization of their carbon credits, whether through monetization in carbon markets, utilization for their Nationally Determined Contributions, or other transactions aimed at raising supplementary finance.
Ajay Banga, President of the World Bank Group, emphasized the potential for countries blessed with natural resources to profit from carbon markets by safeguarding forests and embracing sustainable land management practices. He highlighted the collaborative efforts outlined in the World Bank Engagement Roadmap for High-Integrity Carbon Markets, designed to amplify effective global carbon markets and fulfill their promise for both people and the planet.
The Roadmap delineates the Bank’s commitment to collaborating with various stakeholders to introduce solutions for expanding transparent and liquid carbon markets. This involves partnering with private and public sector entities to implement integrity principles for buyers and sellers of credits, alongside introducing standardized frameworks for entities validating and verifying credits, such as independent credit rating agencies.
Today’s announcement represents the culmination of two decades of dedicated work in establishing robust, transparent carbon markets that compensate developing countries for their climate efforts, benefitting the global community. The Bank’s vision extends further, aiming to enhance support for countries in reducing emissions across diverse sectors, including energy access and coal transition, soil organic carbon, and mangroves. These efforts aim to generate carbon credits accessible through Bank programs or tradable within markets.