67-en-The History and Current State of the World Bank's Carbon Fund-2000-February-Environmental_Issues_Explained

67-en-The History and Current State of the World Bank's Carbon Fund-2000-February-Environmental_Issues_Explained

### Establishment and Early Initiatives (2000)

On January 18, 2000, the World Bank established the "Carbon Fund" with the aim of reducing greenhouse gas (GHG) emissions, particularly carbon dioxide (CO2). Developed nations such as the Netherlands, Sweden, Norway, and Japan contributed a total of 9 billion yen to fund renewable energy projects in developing countries. The emission reductions achieved through these projects would be incorporated into the donor countries' environmental targets. For instance, India has progressed in transitioning from coal-fired power generation to solar and wind energy. In China, wind power plants have become a major area of investment. Additionally, Norway initiated afforestation projects in Africa, aiming to reduce 5000 tons of CO2 annually.

### Expansion of Carbon Pricing and Revenue (2020s)

By 2023, revenues from carbon taxes and Emissions Trading Systems (ETS) reached 9.5 billion USD, with approximately 23% of global emissions covered under these systems. This coverage has accelerated the transition toward decarbonized economies. India aims to install 450 gigawatts (GW) of renewable energy capacity by 2025, with 1.8 billion USD in funding from the World Bank. In China, companies such as Mitsubishi Heavy Industries and Ricoh are providing technologies to support the expansion of wind power, backed by 2 billion USD in funding from the World Bank.

### Support for Sustainable Forestry and Climate Action in Africa

Norwegian afforestation projects in African countries are expected to reduce 5000 tons of CO2 annually. These projects, supported by the World Bank, are being developed in countries like Nigeria and Kenya to foster sustainable development.

### Future Prospects and the Role of the World Bank

The World Bank aims to create a 1 trillion USD green investment market by 2030. It offers technical advice and data analysis to assist countries in implementing ETS and carbon taxes. Through these efforts, the World Bank seeks to reduce global CO2 emissions by 50 billion tons annually by 2030. Additionally, the institution provides frameworks to address economic challenges such as energy crises and inflation, ensuring sustainable growth through carbon markets.

The World Bank continues to play an essential role in guiding international efforts to tackle climate change, promoting sustainable development for both the economy and the environment.