World Bank chief to launch carbon market fund

WASHINGTON (Reuters) - World Bank President Robert Zoellick is set to launch a new multi-million dollar fund in Mexico on Wednesday to help emerging market countries set up their own carbon markets, the bank said on Tuesday.

World Bank President Robert Zoellick speaks during a news conference in Nagoya, central Japan October 28, 2010. REUTERS/Yuriko Nakao

While the list of participating countries is still being finalized, they are expected to include China, Mexico, Chile and Indonesia.

Zoellick will launch the fund in Cancun on Wednesday where countries are involved in global climate negotiations to toughen existing pledges to cut carbon emissions.

The climate talks are supposed to agree in 2011 on a global successor to the Kyoto Protocol, which expires in 2012.

One particular focus of the talks in Cancun is how to expand the carbon markets. Kyoto capped emissions by industrialized countries through 2012, driving them to invest in clean energy projects in developing countries to earn carbon tradable offsets, which would help them meet their limits.

“While (developing) countries would like to see a comprehensive global accord on climate change, they are not waiting for one,” Zoellick said in a statement.

“They are acting now and acting differently to shift from being climate vulnerable to being climate smart,” he added.

“We are fully engaged and have been ramping up our efforts with countries as they put in place practical, effective solutions leading to low-carbon growth and inclusive efforts to overcome poverty,” he added.

The fund, which could reach up to $100 million, will provide technical and other support to developing countries to develop their own carbon markets.

Zoellick noted that more World Bank member countries are making climate change a priority in their development plans. In 1990, about 10 percent of countries included climate change in such plans. That number has grown to over 80 percent.

“We know that the poorest countries will suffer the earliest and the most from climate change,” Zoellick added. “They will bear the brunt of changing weather patterns, water shortages, and rising sea levels even though they are the least equipped to deal with them.”

Not everyone was happy about the initiative.

“Carbon markets are an irreparably flawed means of addressing climate change,” said Karen Orenstein, the U.S. climate campaigner at environmental group Friends of Earth. “They are unreliable and subject to fraud, and they open the door to offset loopholes that undermine environmental integrity.”

In Cancun, Zoellick will also meet with government leaders and others to try to advance the climate talks, the Bank said.

As the globe’s largest poverty-fighting institution, the World Bank is a major provider of loans to developing countries to help them tackle climate changes.

Reporting by Lesley Wroughton; additional reporting by Timothy Gardner in Cancun; Editing by Paul Simao