Indicators of the World Bank for Environmental Conservation

Finance of World Bank for environmental conservation

Abstract

For recent decades the environmental conservation issue has become very considerable and dominant for the sustainable economic development and international cooperation for remaining this development process to decrease gas emission and realising the mitigation strategy in the world economy. Generally the gas emission has increased by two times more in period of 1971 and 2007, while in 2012 the gas emissions has increased by 274,3% since 1971. The share of the OECD Total in gas emission was 44,8% in 2007, while Chine has share 21%, but this data cannot show exactly that Chine could increase its gas emission 7,5 times more between 1971 and 2007. The attractive considerable economic growth of Chine was based on the heavy industry accompanying with increasing consumption of fossil energy, which can be titled as responsible for greenhouse gas effect (GHG).

The case study emphasizes the increasing role of East Asia and Pacific region to develop their economics in field of extending the renewable energy resource use to avoid of more damages for the natural environment. Energy use growth of East Asia and Pacific (EAP) region was by 4,2% as change between 1990-2013, while the one of the world was by 2,0% and one of the High income countries by 0,9% in the same time. Renewable sources and hydropower of all electricity production was 17,5% in East Asia and Pacific, while this was 21,5% in the world in 2013. The data show that the energy use of East Asia and Pacific region was very considerably comparably with the world’s one, while the energy use of EAP was built on the fossil energy use more than the energy use of the world. Therefore the EAP region has a little more backwardness in this field comparably to the world’s one.

The developing trend of industry and energy use in the world economy shows that the sustainable economic growth has less possibility and the global warming and clime change will be stronger in consequence of strengthening effects of greenhouse gas. These negative trends should be changed or stopped by the international wider cooperation. The difficulties are coming from the costly expenditures of innovative advanced technology relevant to the environmental conservation. The highly developed economies and their large corporations are not interested in not so profitable production structure changes.

Basically the financial debts of the developing countries cannot provide favourable economic conditions for themselves to introduce the renewable energy resources and decreasing the effects of the GHG emission. Therefore financial institutions and banks could increase their role in financing new development trends by using renewable energy resources for developing economies. Some national and international financial institutions including World Bank, have considerable leading role to avoid of more negative influences of global warming and climate changes provided by human activities.

Keywords: Gas emission, Global warming, Climate changes, Renewable energy resources, Innovative technology

Introduction

In general the study is focusing on the extending environmental conservation ideas and some natural conditions concerning gas emission responsible for creating greenhouse gas (GHG) based on the performance of human activities with possible financial resources given mostly by World Bank. The decision making process has wider side fields including changes in the climate system, sea level rise and the coastal environment, freshwater resource management, ecosystems accompanying its services, and remaining wider-side biodiversity, agricultural sector and fishery production and hunting, public health care, establishments including towns and the environment built by human activity, transportation network, energy production and using systems, solar radiation management, national and human security and climate policy at national and international levels. Naturally the study cannot analyse all of these fields but this one mentions some main important aspects, mostly efforts to decrease the gas emission by international cooperation with World Bank.

Basically the financial debts of the developing countries cannot provide favourable economic conditions for themselves to introduce the renewable energy resources and decreasing the effects of the GHG (greenhouse gas) emission. Therefore financial institutions and banks could increase their role in financing new development trends by using renewable energy resources for developing economies. Some national and international financial institutions including World Bank, have considerable leading role to avoid of more negative influences of global warming and climate changes provided by human activities. The case study emphasizes the increasing role of East Asia and Pacific region to develop their economics in field of extending the renewable energy resource use to avoid of more damages for the natural environment.

Some international researching results describe the knowledge and main elements about the changes climate system, which was summarised as our Earth has continuously had rising average surface temperature substantially for the latest century and even for the last three decades. The global warming is shown by different way in the Earth system including the surface water, as oceans, the lower atmosphere, and ice-covered regions, where the ice is smelting. The actual warming can be resulted by using fossil fuel burning technologies and different human activities implementing carbon dioxide and other heat-trapping greenhouse gases into the atmosphere with small particles in the atmosphere. Finally some international reports declared that the human-caused climate changes and impacts will continue for many decades or probably many centuries. The magnitude of climate change and the severity of its impacts will depend on the actions that human societies take to respond to these risks. (http://dels.nas.edu/ Report in brief, 2015). All of these difficulties and issues connecting with global warming should lead to strengthen the climate-related human behaviours and institutions in order to avoid of extending the global warming processing to remain the sustainable natural environment and the human society. The effective information, monitoring system and decision support systems are needed for using national and international financial resources including the World Bank to increase the level of advanced technologies for environmental conservation.

Material and Method

The study focuses on climate changes resulted by human activities and analyse the international cooperation possibilities for avoiding of towards extending global warming by using international financial resources including the World Bank. The international data base coming from the UNCTAD and World Bank can provide wide side international overview for dangerous of gas emission giving the global warming for which the human activities are responsible. Therefore human activities are needed for solving the problems of global warming.

The international data base provides the compare for the gas emissions of different country-groups and regions of the world economy. The international compare focuses on differences in field of gas emission among the highly developed economies with US and developing economies including East Asia and Pacific (EAP) region including the economic results of China. Since 1971 East Asia and Pacific region has implemented the considerable growing rate for gas emission among regions of the world and mostly the biggest share of the gas emission is belonging to Chine in 2012, because of the intensive economic growth based on using fossil energy resulting gas emission. In East Asia and Pacific additionally to general economic prosperity based on the fossil energy this region also used more renewable energy resources in order to avoid of the more environmental damages.

Projections of future climate change anticipate an additional warming of 2.0 to 11.5 ºF (1.1 to 6.4 ºC) over the 21st century, on top of the 1.4 ºF already observed over the past 100 years. Warming is and will be greatest over land areas and higher latitudes. Projected impacts of future climate change include:

• Water availability will decrease in many areas that are already drought-prone and in areas where rivers are fed by glaciers or snow-pack;
• A higher fraction of rainfall will fall in the form of heavy precipitation, increasing the risk of flooding and, in some regions, the spread of water-borne illness;
• People and ecosystems in coastal zones will be exposed to higher storm surges, intrusion of salt water into freshwater aquifers, and other risks as sea levels rise;
• Coral reefs will experience widespread bleaching as a result of increasing temperatures, rising sea levels, and ocean acidification (Report in brief, 2015).

Most experts believe that about 85% of the capital needed to reduce GHG emissions most come from the private sector (UNFCCC, 2007), which will require a shift in private sector behaviour and in the way public finances need to be deployed. The investors and companies have ideas (Global Climate Network, 2010), namely

1. public funds should be spent when commercial entities are unwilling to invest;
2. the funds would be best used to make low-carbon technologies commercially viable;
3. they should be used strategically at different stages of the technology development and diffusion process in order to leverage and attract private investment.

Results and Discussion

The developing trend of industry and energy use in the world economy shows that the economic growth has less possibility to remain the sustainable natural environment and the global warming and clime change will be stronger in consequence of strengthening effects of greenhouse gas. These negative trends should be changed or stopped by the international wider cooperation. The difficulties are coming from the costly expenditures of innovative advanced technology relevant to the environmental conservation. The highly developed economies and their large corporations are not interested in not so profitable production structure changes and central supports of governments are continuously increasing for companies to turn environment friendly technologies. Basically the financial issues create the background of the difficulties for technological changes in direction to increase use of renewable energy resources and decreasing the effects of the GHG emission. In these conditions the role of financial institutions and banks has considerably increased in order to ensure financial bases for this kind of new development trends.

Generally the gas emission has increased by two times more in period of 1971 and 2007 in the world total, while in 2012 the gas emissions has increased by 274,3% since 1971 (Table-1). The share of the OECD Total in gas emission was largest one, which decreased from 66,24% in 1971 to level of 44,8% in 2007. This means that the OECD remained its share as biggest one comparably from other regions of the world. The economic growth of OECD did not accompanied with same growth rate of gas emission because of the little more extending the environment friendly technology. The gas emission of the OECD was 39,2% between 1971 and 2007, which was about 1,1% growth rate annual averagely (UNCTAD, 2008).

The growth of gas emission was about 100% in the world total during the same period, which means that the annual average growth rate was 2,8% in this time length. The most of gas emission growth was resulted by the economic developing trends of developing economies. Chine has share 21% in 2007, but this data cannot show exactly that Chine could increase its gas emission 7,5 times more between 1971 and 2007 (UNCTAD, 2008). The attractive considerable economic growth of Chine was based on the heavy industry accompanying with 126,54% increasing consumption of fossil energy, which can be titled as responsible for greenhouse gas effect (GHG). The economic growth of Chine resulted considerable carbon gas emission and additionally the gas emission the carbon powder particulate in air of one third of the northern areas in Chine, which is ten times more than the level allowed for the human health based on the UN WHO.

Energy use growth of East Asia and Pacific (EAP) region was by 4,2% as change between 1990-2013, while the one of the world was by 2,0% and one of the High income countries by 0,9% in the same time (World Development Indicators/Data, 2015, World Bank, 2010a and 2010b). Renewable sources and hydropower of all electricity production was 17,5% in East Asia and Pacific, while this was 21,5% in the world in 2013. The data show that the energy use of East Asia and Pacific region was very considerably comparably with the world’s one, while the energy use of EAP was built on the fossil energy use more than the energy use of the world. Therefore the EAP region has a little more backwardness in this field comparably to the world’s one (Table-2, and The World Bank Group (2016).

In general the population increased very considerably in all developing country-groups, which led to the increasing consumption and mostly gas emission for using car, heating and cooling in houses. The industrial development became dominant for the economic and social growth in developing countries, mostly in mining sector and light industries. These economic social conditions led to increasing share of developing countries in field of gas emission of the world total during period of 1971-2007, namely from 37,86% in 1971 to 46,0 % in 2007 (UNCTAD, 2008). Also Chine mostly gave little less than half of this portion for developing countries. This means that China has provided considerable economic innovative growth within the developing countries since the beginning of 1970s and recently Chinese economic became the second economy after US in the world economy. In China the economic growth resulted in the considerable advanced technologies and modernization rather than consumption leading the increasing gas emission from both of sides. In other developing country-groups the modernization and advanced technologies were implemented, in spite that the highly developed economies and their transnational corporation (TNCs) realised mostly these advanced technology investments. But the increasing gas emission was resulted by the population private consumption rather than investments for modernization process.

Considerable capital stocks and reserves were used for increasing mostly domestic production to supply consumption demands of national population avoid of increasing the import and extending the export in this developing country-group in East Asia and Pacific (EAP) region, which stimulated the modernization by extending environment friendly technology in this developing EAP region. That is why these developing countries were to start introducing technology for decreasing gas emission based on the international agreement for avoiding of more climate changes in the world. Therefore not only the technological backwardness should be decreased, decreasing one-side dependence from the changes of the world economy provided difficulties, to decrease the negative balance of payment, and negative balance of foreign trade, longer time negative effects of the world economic crisis on the developing countries for developing countries. In EAP also their domestic population consumption can contribute to decrease their technological backwardness for introducing modern technology to decrease gas emission. Naturally without cooperation of developing countries and EAP region the gas emission cannot be realised. This EAP region provided 53% of the greenhouse gas emissions of lower and upper income economies in 2012, in which this EAP region provided 42,5% of the methane gas emissions of lower and upper income economies in 2012 (see Table-1, The World Bank Group (2016). These data show how the EAP region considerably used fossil energy comparably to developing economies, therefore these data also stimulate the governments of EAP region to turn to the direction to use renewable energy resources.

Table- 1: Total greenhouse gas and including methane emission in different regions of the world between 1971.–2012.

Source: The World Bank Group (2016), All Rights Reserved. http://wdi.worldbank.org/tables
Gas emissions of the world was 14095,04 in 1971, source: UNCTAD, 2008, World Investment Report

Lower and Upper middle income country-group has a considerable population growth rate, namely 2,4%, which was accompanying with highly level of particulate matter concentration, while the carbon dioxide gas emission reached the top level from world total, even considerably more than the level of high income country group. Naturally Upper Middle income group has this gas emission, which also was increased by China. Naturally in this country-group the energy use per capita kilograms of oil equivalent cannot be highly level, namely 60% between 1990 and 2013, because the low level of energy production and high level of population growing rate (Table-2). The energy use per capita of the High level income country-group has mostly two times more than the one of Upper Middle income country group. Also this Upper Middle income country group could reach any considerable result in energy production per capita and all electricity production because of contribution of China. 48,1%, about half of all electricity production was produced by China in 2011 from Middle income group. China has 4,1% of all carbon dioxide gas emission of the world total in 2011, which shows difference from all gas emission of China, as near to 21% of the world total in data of 2007. The 24,65 % of Chine and 44,33% of High income countries including OECD and 7,37% of Euro Zone from all Carbon dioxide emissions of the world in 2010 (UNCTAD, 2008, World Bank, 2010a and 2010b).

The Table-2 shows some main indicators given by the World Bank, that the High income countries implemented a minimum growing level of population, but their particulate matter concentration and carbon dioxide emissions in million metric tons were considerable high comparably to the low growing rate of their population by the end of 2013, but the energy use per capita kilograms of oil equivalent is very high because of the highly developed consumption level of their population. In spite that their consumption is at highly level, their energy use per capita growth change in % has increased by 4% for period of 1990 and 2013, while this decreased by 9,3 in North America by the end of 2013. This shows that the relative energy consumption per capita is moderately increasing in period of 1990 and 2013, or in some regions of this country group considerably decreased (Table-2, The World Bank Group, 2016; and Figure-1, World Development Indicators/Data, 2015).

Table- 2: World Development Indicators in 2010-2013

Source: The World Bank Group (2016), All Rights Reserved. http://wdi.worldbank.org/tables

*World Development Indicators/Data, 2015. http://data.worldbank.org/products/wdi and World Bank 2010a and 2010b. Carbon dioxide emissions of EURO Area, namely 1935,9 include in the world gas emission in 2010 additionally to gas emission of the High income economies.

 Also mainly social demands and households of population in high income countries have very intensive consumption for electric equipment. Also the energy production in billion kilowatt hours is needed for meeting consumption level of all society and population with household consumption. Therefore the energy production and electric consumption show very large amount of value and indicators in this country-group. But the renewable energy resources and hydropower of all electricity production is more considerable in this country-group than in Middle income country group in 2013 (Table-2).

The international cooperation among developing and highly developed economies needs for creating financial bases mostly from side of developed economies and international financial institutions, for example World Bank additionally to international agreements and their aims to be realised. This cooperation should be based on two main economic aims, namely

1. to strengthen the sustainable economic development based on the extending environment friendly technology and
2. to decrease the gap between economic developed levels of both country-groups, High income and Low income one.

By the end of October of 2010 CIF (Climate Investment Funds) donors financed about US$6,3 billion in activities covering 13 countries with US$4,4 billion funded through the CTF (Clean Technology Fund) and US$1,9 billion through the SCF (Strategic Climate Fund). From SCF amount of financing US$1 billion was allocated to PPCR (Pilot Program for Climate Resilience), US$587 million to FIP (Forest Investment Program) and US$318 million to SREP (Scaling Up Renewable Energy Program in Low Income Countries) program (Bretton Woods Project, 2011). To financing program given by CIF, the CIF funding has been able to leverage an average of other MDBs or private financing at a ratio of US$1 to US$8,4 (World Bank, Bretton Woods, 2010a; Baietti et al, 2012).

In spite that these actions for mitigation were very important initiative steps, there were some unfavourable weaknesses summarized by The Dag Hammarskjöld Foundation, as bellows (Gilbertson-Reyes, 2009):

• The project certification process is very bureaucratic;
• Monitoring and verification audits under the program was very costly including travel cost of experts to places monitored;
• The CDM revenues are based on the outputs and generated at later stages, once the projects are operating. The problem is for the most green investment, however is obtaining upfront financing;
• Concerns about the Kyoto Protocol continuing after 2012 may cause projects that are delayed not to receive benefits.

Also other authors emphasized the importance of the well operating and operative bank system and bank controlling, namely: “So the strategic controlling activity regarding the bank as a whole deals with only developmental, structural and security issues; mostly with the balance sheet structure risks, market risks, structural yield options, and growth potentials.” (Toon Otten, et al, 2014, p. 218).

Conclusions

At present the mitigation of gas emission is became considerable strategic aim to be implemented, but contradict economic interests of economies in the world economy make its solution be implemented so far in time. In spite that the interests and political economic conflicts are very strong there are some initiatives from sides of different country-groups, as High, Middle and Low income country-groups. These initiative steps can be monitored, when the different UN organizations declared and implemented some of their decisions, including financing projects, programs and investment to decrease gas emission by extending environment friendly technologies.

There are some other difficulties concerning the energy use and electricity production. In developing economies the economic growth is closely connected by growing fossil energy use creating more gas emission and making negative influence on the climate. In spite that the energy use is growing rapidly either in Low- and Middle-income economies or High income country-groups, the High-income economies use more than four times as much energy per capita than the other country-groups.

The East Asia and Pacific region developed economy of the region’s countries in field of extending the renewable energy resource use to avoid of more damages for the natural environment. Energy use growth of EAP region was considerable during the last quarterly century from 1990, while this energy use growth was higher than the one of the world, and more than the one of the High income countries. Renewable sources and hydropower of all electricity production of East Asia and Pacific was little less than one of the world in 2013. The data show that the energy use of East Asia and Pacific region was very considerably comparably with the world’s one, while the energy use of EAP was built on the fossil energy use more than the energy use of the world.

Figure-1: Carbon dioxide emissions million metric tons, 2010

Source: World Development Indicators/Data, 2015. http://data.worldbank.org/products/wdi

Low and Middle Income Countries: East Asia; Pacific Europe and Central Asia; Latin America and Caribbean; Middle East and North Africa; South Asia; Sub-Saharan Africa

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