Markets working to support sustainable development

Economic

(environmental taxation, subsidies, carbon trading, conditional financing)

Climate Action Reserve Protocols

The Climate Action Reserve is a programme that seeks to ensure the environmental integrity of GHG emissions reduction projects as well as create and support financial and environmental value in the U.S. carbon market. It does this by establishing standards for quantifying and verifying GHG emissions reduction projects, overseeing independent third party verification bodies, issuing carbon credits generated from such projects and tracking the credits over time on a transparent, publicly-accessible system. 

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The UN Clean Development Mechanism

The Clean Development Mechanism (CDM) is one of the three market based instruments included in the Kyoto Protocol (1997). It is designed to help countries meet emissions reductions, encourage private sector involvement and contribute to sustainable development.

IFC Performance Standards on Social and Environmental Sustainability

The International Finance Corporation (the private sector investment body of the World Bank) has developed a set of Performance Standards to review the suitability of projects for direct financing. If a project is not expected to meet the standards over a ‘reasonable period of time’ then the IFC will not provide finance.

There are also several types of activity that the IFC does not finance e.g. production/trade of weapons, alcohol, tobacco, illegal products or activities.The Performance Standards are based on 8 areas:

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Micro-finance - Kiva

Kiva is a non-profit organisation that uses lending to alleviate poverty around the world. 

Using the internet, Kiva allows individuals to loan as little as $25 to people who then use it to build opportunities for themselves. Kiva then distributes the money to the borrowers through a global network of field partners. 

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Seed Capital Assistance Facility (SCAF)

SCAF was launched in 2008 by the United Nations Environment Fund (UNEP), the Asian Development Bank (ADB), the African Development Bank (AfDB) and the Global Environment Facility (GEF). It is an initiative designed to stimulate investment in sustainable energy by facilitating early-stage funding in clean energy enterprises. In doing so, it helps sustainable energy entrepreneurs and investors to overcome the challenges caused by high transaction costs and insufficient returns.

There are two types of cost-sharing support offered:

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