More wins needed in climate talks: World Bank

Lesley Wroughton and Timothy Gardner Climate Reuters 22 Jun 10;

WASHINGTON (Reuters) - World climate talks set for November in Mexico could make progress on how poorer states cope with global warming, but more wins are needed at the table to produce a big breakthrough at the long-running talks, a senior World Bank official said.

Broad differences over emission targets and who should pay for poorer nations as they struggle with climate changes have stymies negotiations to forge a new global climate deal.

In an interview, Kathy Sierra, World Bank vice-president for sustainable development, which includes the environment, said small steps in Mexico could go a long way to build the confidence to take on tough issues like binding cuts on emissions.

"I think what we need is some successes. And some successes on some of the things that are ripe and some that are a little tougher, so that you get confidence on both sides," she said.

But Sierra is optimistic the groups could make some progress on important issues, including how to help impoverished countries pay for the battle against climate change, such as funding more green fuel projects.

"Most observers feel that there is room to make a couple of leaps forward," said Sierra. "It may not be the fully fledged negotiation of a treaty but there are pieces that people are hoping will come together."

Those pieces, said Sierra, include making headway on financing to help poor countries reduce deforestation and protect their tropical forests.

Six months after climate negotiators emerged disappointed with the results of talks in Copenhagen, Sierra said momentum was picking up again to reach a new pact to replace the Kyoto Protocol, which expires in 2012.

The Copenhagen meeting failed to reach a deal to cut greenhouse gas emissions. But it resulted in an accord that earmarked $30 billion annually over the next three years to help poor states tackle climate change.

"Things were more muted after Copenhagen ... there was a lot of pause in the system ... but my sense from our contacts now is that people have regrouped and while yes, there is a very difficult fiscal environment in (advanced economies), that doesn't mean we should stop," Sierra added, referring to the rising fiscal deficits among Western countries.

She said rich countries were focused on trying to build trust among developing countries by meeting the $30 billion a year funding mark agreed in Copenhagen.

Increasing that to an agreed $100 billion annually by 2020 will, however, be a challenge given budget strains in advanced economies, she added.

"Whether and how the larger sum of money is going to be mobilized in this environment is difficult," she noted.

LOW-CARBON ENVIRONMENT

As Sierra prepares to leave the World Bank after a 32-year career, she said developing nations were increasingly focused on moving toward a low-carbon environment and were looking to the World Bank to help them fund that transition.

She said the World Bank was about to appoint a high-level expert to help the bank make available the best renewable energy technologies on the market.

Sierra said the World Bank was increasing funding available for clean energy projects, such as small and mid-sized hydropower projects and solar power, and over the next several years would easily surpass this year's $3.8 billion investment mark.

The World Bank has been tasked with managing a Clean Technology Fund for donors but has come under fire from environmentalists for also backing coal plants that emit tens of millions of tons of harmful carbon emissions.

In April, it approved a $3.75 billion loan for a coal-fired mega power plant in South Africa to help the country ease its chronic power shortage despite opposition from several large World Bank shareholders, including the United States.

The project highlighted tensions faced by fast-growing developing countries over meeting rising energy needs and moving toward clean energy solutions.

As the world's poverty-fighting institution, the World Bank cannot completely rule out coal projects but should also not increase funding for them, Sierra said.

"As an organization that has its core mandate as development, it is probably inappropriate for us to have a red line on any one technology," she said. "But should we be growing that portfolio? No, I think we should be looking at where we can add the most value, which is on transformational technologies."