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Climate Change Connection to Profitability Jitendra (Jitu) Shah, World Bank, July 15, 2009

Climate Change Connection to Profitability Jitendra (Jitu) Shah, World Bank, July 15, 2009. Outline: Climate Change High awareness – Responses to-date Profitability Angles Financial, Social Responsibility, Environmental, Sustainability, etc. Examples

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Climate Change Connection to Profitability Jitendra (Jitu) Shah, World Bank, July 15, 2009

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  1. Climate Change Connectionto ProfitabilityJitendra (Jitu) Shah, World Bank, July 15, 2009 Outline: • Climate Change • High awareness – Responses to-date • Profitability Angles • Financial, Social Responsibility, Environmental, Sustainability, etc. • Examples • What has been done: success and profits • Role of the World Bank • How can we help • Conclusions

  2. Responses To Date • Long term planning now usually includes CC • New institutions (Climate Cord. Committee, Thailand Greenhouse Gas Management Organization - TGO) • New energy conservation measures and promotion of Renewable Energy • Stabilized forest cover (in most areas) • Research on methane emissions, models, etc. • CDM projects (10+ registered, 20+ submitted, 38+ approved) • EE and RE project experience growing

  3. 2 6 5 1 3 2 5 2 4 1 3 5 4 6 6 4 Net Profit 1 3 Political viability 2 5 4 Financial feasibility 3 6 1 Social Responsibility Profitability Dimensions: Difficult Balancing Act? ? Profit or Effectiveness Pollution Reduction

  4. Business Opportunities in Asia • Clean mass transport systems • Solar energy • Wind energy • Hydro-electricity • Green buildings • Energy Service Companies • Climate proofed infrastructure • Climate adapted crops and livestock • Methane capture from landfills and livestock operations • Recycling and re-use • Etc…..

  5. Example of Business Opportunities in Asian Countries: Solar Energy • Suntech Solar was founded in 2001 in Wuxi (China) • It’s already a worldwide leader in solar energy: • Sales offices in North America, Europe, Asia, and Australia • 4 production sites • 8,000 global employees • Revenues: USD 1,348 million • Net Income: USD 171.3 million • Net margin: 12,7% • Total Assets: USD 1,957 million • 364 MW installed, good forecast

  6. Example of Business Opportunities in Asian Countries:Wind Energy • Suzlon began in 1995 with just 20 people. • In a little over a decade has become a global leader: • 5th World turbine manufacturer (market share of 10.5%) • Asian leader (50+% market share in India). • Operations in 20 countries and manufacturing units across America, Asia, Australia and Europe • Order book of $4,304 million (equivalent to 3,454 MW) • Employees: nearly 14,000 • Revenues: USD 2,808 million • Net Profit: USD 291.3 million • Net worth: USD 479.8 million

  7. Up 56% 2008 Carbon Compliance Markets Source: State and Trends of the Carbon Market 2008, www.carbonfinance.org

  8. World Bank Group’s Role • Multi-sectoral perspective; • Financial resources and leveraging power; • Working with the private sector through IFC; • Building partnerships with a wide range of institutions and stakeholders; • Knowledge base and policy advice; • Convening power, global reach, and local presence; and • Fiduciary, environment, and social safeguards.

  9. Evolving New FinancialArchitecture • Current • IBRD, IDA, Investment Guarantees • Global financing mechanisms: GEF, CF • Bilateral TFs: e.g. AUSAid – Infrastructure for Growth TF; PHRD Climate Change Window, TFESSD, ESMAP, EASTE… • New/planned • Climate Investment Funds – UK, US, Japan, >$5 billion total capital for Clean Technology • Carbon Partnership Facility ($5b/5yrs)—programmatic CF investments • Forest Carbon Partnership Facility ($300m initially)—TA and CF for REDD • UNFCCC Process (approved in Bali)- funds in GEF: • Technology Transformation Fund— focus in MICs, support of low carbon economy strategies) • Adaptation Fund ($80-300m)— from 2% tax on CDM deals

  10. CPF CTF GEF Leveraging: GEF, CTF, & CPF can Result in Transformation of a Clean Energy Market

  11. Concluding Remarks • CC is a reality • Thailand is going to be affected • Think Big, Take Small Steps • Actions to combat Climate Change can be a profitable business • The World Bank can help • We have to act now: the Green Planet is in our hands

  12. Thank You For further information and suggestions contact: Jitendra (Jitu) ShahCountry Sector Coordinator, EASES, SE Asia The World Bank 30th Floor Siam Tower, 989 Rama I Rd, Pathumwan, Bangkok Thailand 10330' DIRECT LINE ++ 66 2 686 8360  ' Cell phone ++ 6689 92142237 ++66 2 686 8301  jshah@worldbank.org www.worldbank.org/eapenvironment

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