Climate Auctions : A Market-Based Approach to National Climate Action
With the Paris Agreement and most of its detailed rulebook now finalized, countries and subnational actors face the challenge of translating climate targets and strategies into action and determining how to finance these actions. Through the Pilot...
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| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/480311550853018431/Climate-Auctions-A-Market-Based-Approach-to-National-Climate-Action http://hdl.handle.net/10986/31322 |
| Summary: | With the Paris Agreement and most of its
detailed rulebook now finalized, countries and subnational
actors face the challenge of translating climate targets and
strategies into action and determining how to finance these
actions. Through the Pilot Auction Facility for Methane and
Climate Change Mitigation (PAF), the World Bank developed an
innovative financial mechanism – climate auctions – which
stimulates private investment in projects that reduce
greenhouse gas emissions. Climate auctions offer price
guarantees to companies that can deliver eligible climate
results in the future. These price guarantees are allocated
through a transparent, efficient auctioning process, which
maximizes the climate impact of scarce public funds. In the
near-term, countries can utilize climate auctions to spur
significant investments in low-carbon activities and
mobilize finance at the scale and pace necessary to achieve
their national climate targets, laying the groundwork for
longer-term carbon pricing and greater climate ambition.
This policy brief is intended to inform policymakers and
public funders about why climate auctions are an effective
tool for achieving climate outcomes, focusing on how
policymakers can utilize auctions to accelerate NDC
implementation and raise climate ambition. It also outlines
how climate auctions work and where they are most effective.
The policy brief was produced by staff of the World Bank
with external contributions from the Rocky Mountain Institute. |
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