Pilot Auction Facility: Opportunities Beyond the Piloting Phase

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June 2016
Source: 
World Bank Group, Ecofys, Climate Focus

The Pilot Auction Facility: Opportunities Beyond the Piloting Phase report aims to identify opportunities for achieving greenhouse gas (GHG) mitigation through the climate finance model developed by the Pilot Auction Facility for Methane and Climate Change Mitigation (PAF).

The PAF’s first two pilot auctions have demonstrated strong interest and a clear demand from the private sector for climate finance delivered through price guarantees. Furthermore, auctioning has proven an efficient method for allocating price guarantees to projects with the lowest abatement costs. Recognizing both the need for innovative mechanisms that support countries in achieving their Nationally Determined Contributions (NDCs), as well as the widespread availability of low-cost abatement opportunities, this report looks at the replication and scale-up potential of the PAF model. This report also considers the contexts in which the PAF model could effectively incentivize emission reductions and broader sustainable development objectives. Specifically, this report assesses mitigation sectors most suitable for the PAF model, potential adjustments to the model in order to maximize results, and the type of actors that could participate in similar auctions, whether as bidders or as potential funders.