Brokering Private Action for Sustainable Development: The Role of the World Bank

Turning to partnerships in climate change governance, Katharina Michaelowa, Axel Michaelowa and Liliana B. Andonova (Chapter 4) examine the brokerage role of the World Bank in mobilizing public and private actors to contribute to the development of transnational carbon markets through the shaping and piloting of methodologies, financing, and capacity. In particular, the chapter assesses the Bank’s pioneering role in international carbon markets, which dates back to the establishment of the Prototype Carbon Fund (PCF) in 2000. The authors evaluate such a role against the conditions for effectiveness described in the volume’s analytical framework, and then link it to the carbon markets’ actual achievement of different dimensions of effectiveness. They demonstrate that the World Bank’s involvement has led to a significant commitment of resources and facilitated the creation of sophisticated contracts and methodologies for international carbon markets, even though the Bank has found it increasingly difficult to mobilize private sector financing in recent years. In addition, they highlight that while the World Bank-brokered partnerships have often been effective in creating value for the partners, this has come at the expense of real additionality in carbon emission reductions, and thus hindered the partnerships’ overall contribution to climate change mitigation.