PARIS - Germany, Norway, Sweden and Switzerland announced a US$500 million (S$706 million) initiative on Monday (Nov 30) that aims to develop incentives to achieve large-scale cuts in greenhouse gas emissions in developing countries.
The Transformative Carbon Asset Facility was developed together with the World Bank Group, which said it will help poorer countries implement their planned emission cuts by working with them to create new classes of carbon assets associated with greenhouse gas emission reductions.
The facility will measure and pay for emission cuts in large-scale programmes in areas such as renewable energy, transport, energy efficiency, solid waste management, and low-carbon cities. For example, it could make payments for emission reductions to countries that remove fossil fuel subsidies or embark on other reforms like simplifying regulations for renewable energy, the World Bank said.
"We want to help developing countries find a credible pathway toward low carbon development," said World Bank Group president Jim Yong Kim. "This initiative is one such way because it will help countries create and pay for the next generation of carbon credits."
Developing nations say they need financial support to cut emissions and to invest in cleaner energy technologies.
The World Bank said the initiative would start next year with an initial expected commitment of more than US$250 million from the contributing countries.
The facility would remain open for additional contributions until a target of US$500 million is reached.