Climate-Smart PPP Legal and Regulatory Framework

This is a new section of the PPPLRC website and is currently in draft form. Your feedback is welcome: If you would like to comment on the content of this section of the website or if you have suggestions for links or materials that could be included please contact us at ppp@worldbank.org.

Climate change is now firmly on the global agenda: While  the UN Sustainable Development Goals call for urgent action to combat climate change the world committed under the 2015 Paris Agreement to undertake ambitious efforts to combat climate change and adapt to its effects, with enhanced support to assist developing countries to do so. The Paris Agreement’s central aim is to limit the rise in global temperatures to well below 2 degrees Celsius above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. Additionally, the agreement aims to strengthen the ability of countries to deal with the impacts of climate change. 

To achieve these goals climate-smart infrastructure solutions must be developed and implemented. As public finance is limited, private investment and expertise, including infrastructure finance through PPP models will play an essential role. This means that national policies and programs must be put in place that integrate climate change considerations and remove barriers to and facilitate large-scale private investment in climate-smart mitigation and adaptation infrastructure, including PPP legislation and policies. 

With the commitment of countries to National Determined Contributions (NDCs) under the Paris Agreement one essential element for the creation of a robust climate-smart PPP enabling environment is the alignment of PPP legislation and policies with NDCs as well as with all other climate change and sector-specific policies that address investment in low-carbon and resilient infrastructure. 

The focus of this section is on climate-smart PPP legal and regulatory framework. It includes in particular links to databases and reading materials that provide access to regulatory and policy instruments from around the globe incentivizing the development, procurement, and implementation of climate-smart infrastructure financed by the private sector, such as green building standards, carbon taxes, emission trading but does not cover climate finance in more detail, e.g. green bonds

Climate-Smart PPP Policies and Legislation

PPP policies and legislation can lay down the guiding principles to ensure that a climate change impact analysis is undertaken during project development and that the identified issues and opportunities are reflected in the project design and implementation. While requirements related to climate change risks are sometimes referred to in PPP policies, guidelines and legislation, they are more often included in broader climate change or infrastructure programs or plans as well as sectoral policies and legislation that need to be considered for the development of PPP infrastructure projects. Ideally, such requirements are harmonized with overall PPP policies and legislation to ensure that identified climate change issues are integrated consistently within PPP projects.  

Regional 

European Union: The Directives below entered into force on April 18, 2016, and include many provisions related to sustainable development. 

National 

Philippines:  

  • Public-Private Partnership (PPP) Governing Board Resolution of December 2018 provides guidelines to ensure that identified safeguard concerns are considered during the feasibility stage and integrated into the project design. This includes  safeguards related to climate change mitigation as well as resilience to climate change hazards.
  • National Government Agency Public-Private Partnership Manual (Draft), Annex 5: The Environmental Impact Assessment (EIA) includes designing appropriate preventive, mitigating and enhancement measures, including disaster risk reduction (DRR) and climate change adaptation (CCA) measures that will address the consequences to protect the environment and the community’s welfare (4.1).

Further Reading and Resources

Emerging Trends in Mainstreaming Climate Resilience in Large Scale, Multi-sector Infrastructure PPPs PPIAF 2016 - Report summarizes review of 16 PPP policy frameworks globally  with regard to climate change and shares recommendations on ways forward to incorporate climate risk and resilience better in PPP frameworks.

For climate-smart procurement policies and legislation see also Procuring Climate-Smart Procurement.

Nationally Determined Contributions (NDCs) 

The Paris Agreement requires all Parties to put forward their best efforts to achieve its ambitious goals through nationally determined contributions (NDCs) and to strengthen these efforts in the years ahead. So far 186 countries have submitted NDCs. 

Climate-Smart Policies, Legislation and Guidelines

In response to the challenges posed by climate change and to implement their obligations under the Paris Agreement many countries have adopted or are currently adjusting policies and legislation to reflect climate change mitigation and resilience objectives as well as NDC commitments.

Databases

Further Reading and Resources

  • Legislating for a low carbon and climate resilient transition: learning from international experiences, Alina Averchenkova, Real Instituto Elcano January 2019 - The objective of this working paper is to inform policy experts, legislators and decision-makers on the recent trends in climate change policy-making around the world and to draw lessons learnt from the experiences with designing and implementing climate change legislation. The study in particular aims to contribute to the current debate in Spain on a draft climate change and energy transition law, as well as aid other countries currently working on climate legislation. 
     
  • Enabling Environment for Private Sector Adaptation,Vladimir Stenek, International Finance Corporation Jean-Christophe Amado, David Greenall, Deloitte IFC 2013 - Gives an overview of drivers at the country level that contribute to a business environment favorable to climate change adaptationand includes examples of national legal instruments relevant in this context. 
     
  • Commonwealth Climate and Law Initiative (CCLI) - The CCLI is examining the legal basis for directors and trustees to consider,  manage, and report on climate change-related risk, and the circumstances in which they may be liable for failing to do so.
     
  • The Checklist on Law and Disaster Risk Reduction, an annotated outline, IFRC and UNDP October 2015, provides a prioritized list of ten key questions that lawmakers, implementing officials, and those supporting them need to consider in order to ensure that their laws provide the best support for disaster risk reduction (DRR).The Checklist also aims to foster a more integrated approach to DRR by taking into account climate change and sustainable development considerations within the review of legislation. The checklist is complemented by The Handbook on Law and Disaster Risk Reduction which provides general guidance on key steps to consider when using the Checklist on Law and Disaster Risk Reduction.
  • Effective Law and Regulation for Disaster Risk Reduction: A multi-country report, IFRC and UNDP, 2014 – The report assesses the legal frameworks for disaster risk reduction (DRR) in 31 countries. The purpose of this report is to support legislators, public administrators, and DRR and development practitioners and advocates to prepare and implement effective legal frameworks for disaster risk management (DRM) that are adapted to their own country's needs, drawing on examples and experiences from other countries.