The case for a World Carbon Bank

Abstract

This paper explores the idea of creating a new multilateral financial institution, a World Carbon Bank, to channel aid funds and technical expertise to low and middle-income countries, to aid with the green transition. A focused high-return first project could involve phasing out coal power plants and replacing with green alternatives. Coal accounts for 30% of global emissions. Many coal plants are located outside advanced economies and are relatively new. The costs of swapping them out is significant, and most poorer countries have little incentive or capacity to do so. WCB funds would be outright grants and not loans.