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Reducing emissions of carbon dioxide and
other greenhouse gases that affect climate change is one of
the key challenges facing the international community. The
Bank's Prototype Carbon Fund (PCF) provides a framework
for action, learning, and research to demonstrate how
greenhouse gas emission reduction transactions can
contribute to sustainable development, while lowering the
costs of compliance with the Kyoto Protocol-the 1997
agreement to cut industrialized world emissions of
greenhouse gases. The Latin American and the Caribbean (LAC)
Region has a growing number of successful Prototype Carbon
Fund (PCF) projects that have yielded useful experience for
developing additional projects. This note highlights the
lessons learned in the region, to date. The PCF is a
public-private fund established in 2000 and administered by
the World Bank acting as Trustee. It operates under the
clean development mechanism principles of the Kyoto Protocol
to the UN Framework Convention on Climate Change (UNFCCC).
The PCF aims to demonstrate the potential of market-based
mechanisms for reducing the cost of mitigating climate
change. It does this by buying Certified Emission Reductions
(CERs) from projects that reduce greenhouse gas emissions in
Bank client countries, particularly projects that replace
fossil fuels with renewable energy sources and those that
improve end-use and supply-side efficiency. In return for
their shares in the PCF, developed country governments and
private sector companies receive CERs, which they can use
towards their obligations under the Kyoto Protocol or
domestic regulations.
