Launch of the Black Carbon Finance Study Group report

Black carbon is a major contributor to near-term climate change and a dangerous air pollutant. It increases glacier melting, harms public health, disrupts weather patterns and reduces food security. Despite the rapid and multiple benefits from black carbon emission reduction and available abatement measures, black carbon mitigation projects have had a difficult time attracting private and public finance.

The Black Carbon Finance Study Group (BCFSG), led by the World Bank Group and United Nations Environment Programme’s Finance Initiative with support from the CCAC, investigated ways to scale up financing and investments for black carbon mitigation. Its new report identifies existing funds and potential financial mechanisms that could attract more funding and outlines strategies for scaling up in future.

The BCFSG, comprised of 30-40 experts with backgrounds in operations, policy, science and finance, began its working sessions in June 2014.

As a result, two black carbon intense sectors (domestic cooking and heavy diesel) were recognized as mature enough to attract public and private sector financing, and had sufficient performance standards to measure progress. While it was not in the working group’s mandate to identify performance metrics they determined that having clear ways of measuring black carbon abatement is crucial to attract funding.

The World Bank team worked with the CCAC’s Scientific Advisory Panel, the Gold Standard Foundation and other expert groups to develop broadly agreed metrics that used simple methodologies to measure the health and/or climate benefits of black carbon mitigation, with a key objective that such methodologies and metrics being developed are designed in a way to attract public and private finance.

The World Bank Group coordinated closely with other CCAC initiatives and the Secretariat – especially with the diesel transportation and the domestic heating and cooking initiatives. The report was launched at a meeting of the CCAC’s High Level Assembly of the CCAC in Geneva in May 2015, and its recommendations were considered by these initiatives.

The Black Carbon Finance Study Group’s findings have already led to practical applications. For example, the cookstoves initiative is planning to pilot the use of new performance measurements developed by the Gold Standard Foundation on the climate impacts of black carbon from stoves, in order to attract results based financing. 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.