The World Bank on Monday launched a $500 million market-based scheme designed to help developing countries pay for emission reductions and combat climate change.

 

Germany, Norway, Sweden and Switzerland have jointly pledged an initial $250 million to get the so-called Transformative Carbon Asset Facility (TCAF) up and running next year, while the bank hopes further contributions will take the eventual total to $500 million.

 

The scheme, which will reward countries for reducing emissions by paying a fee for each ton of carbon dioxide (CO2) reduced, was launched in Paris a day after senior officials from almost 200 nations met in the French capital for two-week talks aimed at thrashing out a global deal to cut greenhouse gas emissions.

 

The bank said the price per ton paid would be set on a case-by-case basis and said the scheme would support energy efficiency, renewable energy and waste management projects, as well as schemes to cut emissions in cities and from the transport sector.

 

For many of the developing countries involved access to finance from richer nations is a major requirement of any Paris deal.

 

The facility will contribute to helping countries implement their emission reduction plans - called Intended Nationally Determined Contributions (INDCs) in U.N. jargon - submitted to the U.N. ahead of the talks, the Bank said.

 

"Putting market forces to work is an efficient way of reducing emissions. We expect to achieve significant impact on the ground through the TCAF and ensure the sustainability of reducing emissions even beyond the Facility's initial support," Prime Minister Erna Solberg of Norway said in a statement. (Reuters)