Letter to the World Bank on the 
Prototype Carbon Fund

March 20, 2000

Mr. Ken Newcombe
World Bank 
Prototype Carbon Fund
1818 H Street, N.W.
Washington, D.C.

Dear Mr. Newcombe:

We have appreciated the opportunity to discuss some of our concerns regarding the Prototype Carbon Fund ("PCF") in a candid format with you and your colleagues in the past as it was being developed. We were initially encouraged when it seemed that you were truly committed to making the PCF "largely renewable."

However, we are growing increasingly alarmed over the types of projects we have learned the Bank may be considering for PCF support.

It is our understanding, based on a recent NGO meeting with Ian Johnson and other World Bank staff, that the PCF team is giving serious consideration to including oil and/or gas pipeline projects in its portfolio; we were informed at this meeting that the two possible projects, a pipeline in Ghana and another pipeline in Uganda, were being actively considered for PCF-related support. If true, this is a serious misrepresentation of your initial pledge to the CAN/NGO community that the PCF will be "largely renewable." It also is a troubling precedent for those of us who see the PCF as providing a positive example to the global community, particularly as this example relates to possible CDM projects.

CAN is committed to ensuring that the CDM is truly "clean," and not simply another subsidy for the already heavily subsidized fossil fuel industry. Therefore, it is CAN's position that the PCF must be focused primarily upon sustainable renewables and cutting edge demand-side efficiency technologies. It is our firm belief that allowing fossil fuel projects of any sort (as well as large dams and nuclear projects) into the CDM would seriously undermine the incentive for domestic action on carbon emissions, thereby making the Kyoto Protocol targets far weaker than they already are. By proposing to include fossil fuel projects in the PCF, the World Bank is providing the exact opposite of the sort of global leadership and high standards you had promised us you would provide-lowering rather than raising the bar for the CDM.

Because of these and other concerns, we have less confidence that your definition of what constitutes a "renewable" energy project and ours are equivalent. Thus, CAN would like to know how the PCF specifically defines "largely renewable" in the context of your operating guidelines.

We are also concerned that the PCF may be positioning itself prematurely to include developing country sinks in your project portfolio. We have been informed that Bank staff is actively lobbying for the inclusion of sinks in the CDM at upcoming climate negotiations. This suggests two things: 1) That the Bank believes sinks should also be included in the PCF; 2) that, contrary to your commitments to follow, not to lead the COP process, Bank staff are, in fact, utilizing your access to decision-makers to steer the COP process in a controversial direction. 

As NGOs, government officials, and World Bank executive directors have explicitly stated previously, it is inappropriate for the World Bank to get out head of the negotiating process by implementing-or even lobbying for inclusion of-types of projects that have yet to be considered or approved by the Parties to the Climate Convention. Therefore, we request a written explanation of the role of sinks in the PCF-in the short and long term, as well as a written explanation for the Bank/PCF staff's alleged lobbying on behalf of inclusion of sinks in the CDM.

Finally, we feel that these and other concerns could be more readily resolved were CAN to have on representative from the Washington, D.C. NGO community who could act as a liaison between the PCF and the rest of CAN, and who would sit on the Technical Advisory Group to the PCF. We understand that NGOs have been selected by PCF staff from other regions for the TAG, however we suggest that the CAN community be allowed to select at least one NGO representative from Washington, D.C. to sit on the TAG to assure that concerns such as those iterated above are more swiftly addressed. We have already provided a suggested NGO liaison for this position.

We look forward to meeting with you to discuss these and other concerns and questions regarding the PCF; however, we request a written reply to these issues we have raised prior to our next meeting.

Sincerely,

Nathalie Eddy, U.S. Climate Action Network

Jon Sohn, Friends of the Earth-US

Karla Schoeters, Climate Network Europe

Daphne Wysham, Institute for Policy Studies

Athena Ballesteros, Greenpeace Southeast Asia

Frances Macguire, Friends of the Earth-England, Whales, Northern Ireland

Richard Sherman, Earthlife Africa, South Africa

Delia Villagrasa, The International Society of Doctors for the Environment

Vrinder Singh, Renewable Energy Policy Project/CREST

Agus P. Sari, Pelangi- Indonesia

Liam Salter, World Wildlife Fund International

Helene Connor, Helio International

Petr Hlobil, CEE Bankwatch

Gary Cook, Greenpeace-USA

Jim Phelps, Zululand Environmental Alliance (ZEAL)- South Africa

Bonizella Biagini, National Environmental Trust- USA

Chris Rolfe, Western Environmental Law Center- Canada

Don Goldberg, Senior Attorney, Center for International Environmental Law

Julia Philpott, International Institute for Energy Conservation

Carol Werner, Executive Director, Environmental and Energy Study Institute

Yuri Onodera, Friends of the Earth-Japan

Gunnar Olesen, International Network for Sustainable Energy (INFORSE)

Asger Garnak, Danish Organization for Renewable Energy (OVE)

Christian Ege Joergensen, Danish Ecological Council

James Barnes, Counselor, Friends of the Earth International

Harri Lammi, Friends of the Earth- Finland

Karen Hopfl-Harris, J.D., Physicians for Social Responsibility- USA

Douglas Norlen, Pacific Environment & Resources Center-USA

CC:

Jan Piercy
U.S. Executive Director

Jeff Miotke
Deputy Director, Office of Global Change

Dan Bedansky
U.S. State Department

Ambassador Mark Hambley
U.S. State Department

Mr. Ken Newcombe
March 20, 2000
Page Four

Frank Loy
Under Secretary for Global Affairs
U.S. State Department

David Sandalow
OES Assistant Secretary of State
U.S. State Department

Michael Colby
Office of Multilateral Development Banks
U.S. Department of the Treasury

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