Black Carbon Finance Study Group Report 2015

by CCAC secretariat - 20 May, 2015
Our efforts in reducing black carbon emission

Geneva, May 20, 2015 - Reducing black carbon emissions could prevent millions of premature deaths annually and play an important role in the global fight against climate change. Yet despite these benefits, an array of black carbon abatement measures that are technically within reach have not yet been financed and deployed to their full potential.

A report released today by the Climate and Clean Air Coalition (CCAC) finds that existing funds are already in a position to finance businesses, activities, technologies, and policies that will contribute to cutting black carbon emissions, and that several black carbon-rich sectors are
sufficiently mature to absorb finance. The report also outlines key strategies and steps needed to scale up black carbon finance over time. The work was led by the World Bank Group, a co-leader of CCAC’s Finance Initiative.

At the launch of the ‘Black Carbon Finance Study Group Report’ Christian Grossman, Director of the World Bank’s Climate Business Department, Climate Change Group, said the rapid implementation of measures to reduce black carbon in a range of sectors would deliver multiple benefits and near term results in health, climate and other areas.

“We need to urgently find ways to reduce emissions of black carbon and other short-lived climate pollutants on a wide scale,” Mr. Grossman said. “Public and private financiers can and need to adopt black carbon performance measurements to direct new and existing financial flows toward technology that can lower these emissions.”

“This shift can start today in sectors like municipal transport and residential clean cooking spaces where investment already exists and performance management tools are nearly or already in place. We should also increase our efforts to strengthen these tools in other sectors to create an 
environment where finance for black carbon can be made available on a much wider scale.”

Helena Molin Valdes, Head of the Climate and Clean Air Coalition Secretariat, welcomed the report and said Coalition partners were active in numerous black carbon mitigation initiatives across multiple sectors.

“Black carbon is a major-contributor to near term climate change. It increases the melting of ice and glaciers, harms public health, reduces food security and disrupts weather patterns. It is also a major threat to health, shortening the lives of millions of people every year,” Mrs. Molin Valdes said. “There is important work to be done and with strategic financing and increased investment we can protect lives and rapidly decrease short term climate impacts.”

The report recommends funding the development of black carbon performance standards so that investors can screen potential projects to ensure that activities are reducing emissions and achieving climate and health benefits. However, practical steps can be taken immediately in the diesel transportation and residential cooking sectors.

According to the World Health Organization indoor air pollution, of which cooking is leading contributor, causes approximately 4.3 million premature deaths a year. Programs to improve cookstoves are underway in many parts of the world. Mrs Bahijjahtu Abubakar National Coordinator, Renewable Energy Programme, at the Federal Ministry of Environment, Nigeria, says that their cookstove program has created a range of benefits in her country.

“I call on the international finance community to respond to these recommendations,” Mrs Abubakar said. “Our cookstove program now reaches and empowers millions of women, creating job opportunities, while reducing emissions. It has been essential for local economic development and to protect women and children from harmful smoke and burn risks at home, in school kitchens and other places. We are ready to absorb more finance in this field."

In the transportation sector, the suggestion is for development finance institutions to use concessional loans and grants to incentivize diesel vehicle owners to transition to lower-soot or soot-free engines. Results-based finance instruments can be used to incentivize the adoption and continued maintenance of diesel abatement technology. In practice, funds could flow through designated national authorities to municipalities, private fleet owners, and other beneficiaries.

The report also identified four additional black carbon-rich sectors that offer strong potential for impact and action in the near to medium term. These include: Brick kiln efficiency and the adoption of alternative materials, replacing kerosene lanterns, adopting alternative of agricultural residues to avert burning, and reducing emissions from oil and gas flaring.

Over the longer term the report recommends cross-cutting strategies like including black carbon in development finance investment decision making. Such a step could see development banks offer sovereign borrowers more concessional loan terms if they choose to follow a low carbon pathway, or offer loans and grants to finance transformation of a particular sector.

Black carbon is a byproduct of burning diesel, coal, firewood, and crop residue and its negative impacts are both fast-acting and extensive. Black carbon particles absorb light and re-radiate it as heat in the atmosphere and act much more intensely than carbon dioxide albeit for a much shorter time. Recent studies show that black carbon may be responsible for close to 20% of the planet’s warming, making it the second highest contributor to climate change after carbon dioxide.

Black carbon is also a component of fine particulate matter (PM 2.5). Exposure to fine particulate pollution has a significant impact on human health. Indoor and outdoor air pollution causes close to 7 million premature deaths a year. Tens of millions more suffer from related, preventable diseases, including cardiovascular diseases, pneumonia, stroke, lung cancer, and chronic obstructive pulmonary disease.