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In support of the Climate Change and Low Carbon Green Growth Program of Romania (LCGGP), the World Bank has prepared the current report with the aim of helping the Romanian Government to operationalize the strategic path chosen by the country for implementing its National Climate Change and Low Carbon Green Growth Strategy 2016-20302 (NSCC) and the associated 2016-2020 Action Plan for Climate Change (APCC). This includes some relevant institutional arrangements and Monitoring and Evaluation (M&E) activities for existing Climate Change (CC) related policies and measures, notably those derived from the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, plus the requirements for European Union (EU) Member States regarding the monitoring and evaluation of the EU-level climate and energy package and the Europe 2020 goals for a smart, sustainable and inclusive growth. It was recommended that the Romanian government should build upon current obligations for M&E of public policies, whilst recognizing that the M&E system initially established for the NSCC and APCC for Romania must not be considered as static, but rather as an on-going continuum that will evolve, expand and improve over time. The report highlights some key weaknesses in institutional capacity for CC-related M&E and identifies several sector-specific examples of areas for improvement. The report usefully reviews international good practices for the M&E of CC strategies and action plans under the headings of General good practice; Green Growth good practices; Special considerations for CC adaptation (including the selection of indicators), and; European examples (including short case studies on relevant M&E practices from Germany and France). In order to facilitate the necessary learning processes for policy-makers and other key stakeholders it is recommended that the Romanian government adopts a “theory-based” approach (in conjunction with the OECD DAC criteria) as the evaluation framework for the NSCC and APCC. The theory-based approach follows an iterative process of design, evaluation, and redesign based on lessons learned about whether specific interventions are successful or not, why they succeeded or failed and how they can be improved. The report concludes with numerous additional practical recommendations for development of a simple, affordable and cost effective M&E system for the NSCC and APCC. These recommendations are grouped into four categories: (i) general recommendations; (ii) recommendations for improving institutional arrangements; (iii) recommendations for developing a solid evaluation framework; and (iv) recommendations for reporting. Finally, to ensure a robust framework, the M&E and Reporting system should clearly define goals, indicators, responsibilities and communication strategies. It should facilitate continuous learning by policy-makers and other key stakeholders in order to underpin the long-term development of the knowledge and understanding needed to better design, implement and deliver future CC strategies and action plans for Romania.

The current report is a milestone for preparing the Romanian climate change (CC) action plan. A CC action plan should be based on the consolidation and coordination of both mitigation and adaptation measures and options. An important step in the elaboration of such a plan is the selection of appropriate actions. This selection requires the involvement of competent authorities in the key sectors, including, in the case of Romania, transport, energy, urban, water, agriculture, and forestry. The screening approaches are used to facilitate a transparent decision-making process in various fields such as environmental impacts, dangerous substances, environmental footprint of products, or CC actions. The report is structured as follows: section one gives introduction. Section two summarizes the usage of screening approaches in the field of CC and environment by different European Union (EU) member states and by the European Commission. Section three discusses the main categories of mitigation and adaption measures that can be included in a CC action plan. Section four presents the screening approach and process and describes several complementary tools (multi-criteria analysis, cost-benefit analysis (CBA), cost effectiveness analysis (CEA), modeling) that should be used when the screening approach is insufficient. Section five provides a conclusion and key recommendations.

This note examines how to maximize the benefits from the use of market instruments in support of developing countries' low-emission development priorities. First, it briefly surveys the current state and trends of the carbon market, highlighting the main achievements of carbon finance over its decade-long history. Second, it reviews updated scenarios of the scale of future carbon markets and associated financial flows, in light of developments in climate negotiations and domestic markets. Finally, it identifies the necessary steps to scale up carbon market flows in future, on both the demand and supply sides, including the reform of existing mechanisms, and innovation to broaden the scope, scale and reach of carbon markets. The most important determinant of carbon offset market flows to developing countries is clearly the level of international mitigation targets: the more ambitious the targets the greater the scope for such flows. Developed countries can also encourage flows by increasing supplementary limits, which are the proportion of mitigation targets that can be met by purchases from developing countries. Finally, there remains a considerable need for innovation, awareness-raising and capacity building in public and private institutions in developing countries, to increase their participation in the carbon market and build and enabling environment for low-emission development.

The extension of rotation lengths in forests has been proposed as an option for increasing carbon storage and contributing to climate change mitigation. This paper presents the results of a case study conducted on forests located in the southwest of France. The aim of this research was to assess the cost effectiveness of a subsidy/tax system on carbon fluxes. First, it is shown that such a mechanism leads forest owners to extend rotation lengths. However, cost effectiveness analysis shows that: (1) marginal social costs are more expensive than the private marginal costs of carbon sequestration; (2) marginal costs are higher when carbon stocks are discounted, ranging from 170.1 €/tC to 719.8 €/tC with discounted carbon stocks; and from 38.8 €/tC to 78.4 €/tC with undiscounted carbon stocks; (3) marginal costs are in the range of measures of the social value of carbon for France; (4) marginal costs increase with timber prices and increase with discount rate.

In 2005, the Millennium Ecosystem Assessment (MA, 2005) provided the first comprehensive report on global ecosystems, the dependence of human societies on the services provided, current state, and likely future trajectory. The MA identified the failure to value ecosystem services as a major contributing cause. The 2001 environment strategy did not explicitly address environmental valuation, although the focus on poverty and environment implies a need for valuing natural resources and environmental services. In consultations on the 2010 environment strategy, a wide range of stakeholders stressed the importance of mainstreaming environmental services. To better direct limited resources for environmental valuation and training, a closer look is needed to identify the conditions under which valuation has had an impact on: policy and project design, policy dialogue in client countries, environmental investments, and strengthening the capacity of national institutions. This report presents a review of environmental valuation in World Bank operational and analytical work, identifying what has been done, and the impacts environmental valuation has had. The report identifies the conditions under which valuation is most likely to influence decision-makers, and finally, the implications for the 2010 environment strategy. The report is organized as follows: section one gives context; section two gives introduction; section three gives approach to learning from past experience; section four focuses on coverage of ecosystem services; section five presents prioritizing environmental valuation; section six deals with why environmental valuation not done; and section seven gives recommendations.