Developing low carbon economies promised $4.25bn boost

Low carbon projects in emerging markets were given a huge boost this week after the world's largest public environmental fund pledged that it would invest a record $4.25bn (£2.86bn) over the next four years.

The commitments by 30 donor countries to the Global Environment Facility (GEF) during a session in Paris yesterday marks a 52 per cent increase in new resources for the facility, to help developing countries tackle climate change.

GEF Chief Executive Monique Barbut said the boost in funds was the first tangible confirmation of the financial commitments made by rich nations at the Copenhagen Summit last December.

"This welcome increase in resources for the financial mechanism of the Convention on Biological Diversity should kick off the upcoming Conference of the Parties to the convention in Nagoya, Japan this October on a positive note, " he said referring to the next round of UN forestry and biodiversity negotiations. "It is now the GEF’s responsibility to transform these resources into concrete results on the ground."

Approximately $1.35bn of the fund will be directed at projects that help to reduce carbon emissions. The rest will be used to better manage and expand protected and endangered areas, improve the management of trans-boundary water systems, reduce pollutants in land and water, and expand protection for the world's forests.

"This record replenishment... is a testimony to the international donor community’s commitment to the environmental agenda," said Axel van Trotsenburg, World Bank Vice President for Concessional Finance and Global Partnerships. " The GEF's comprehensive focus, supporting climate change, biodiversity and other critical environmental areas, coupled with its ability to deliver funding through multilateral development banks and the UN family, is what makes it a uniquely important facility."

The GEF has been replenished four times since its inception in 1991 and to date the facility has provided $8.7bn in grants to more than 2,400 environmental projects in over 165 developing countries and emerging economies.

The announcement will provide a boost to low carbon businesses looking to address developing markets and comes at the same time as a new report from GBI Research concluded that a combination of favourable policies and regulation will drive massive growth opportunities in Latin America's renewable energy market over the next decade.

The study, entitled Favorable Policies and Legislations Drive Renewable Energy Market in South America, says countries in the South American region have enacted favourable policies to stimulate investment in non-conventional energy sources such as wind, solar and biomass.