Economics & Development

The number of countries that have announced some type of commitment to net zero emissions has increased very rapidly in recent years, from five in 2018 to over 145 in 2023. Many of these are middle-income countries (MICs) and low-income countries (LICs), whose greenhouse gas (GHG) emissions are concentrated in the power sector. As domestic electricity demand grows, these countries must increase power generation while reducing carbon emissions to meet socioeconomic needs and align with the Paris Agreement’s goal of limiting global temperature rise to 1.5°C. Therefore, the power sector must increasingly rely on low-carbon energy sources. LICs and MICs are therefore considering introducing a range of policies to decarbonize their power sectors, and a growing number of them are considering carbon pricing instruments (CPIs), such as carbon taxes and or emissions trading systems (ETSs) to transition to low-carbon electricity systems, as part of a broader policy mix. A literature review confirms the gaps that exist in developing economies to introduce carbon pricing. This report aims to fill some of the identified knowledge gaps and assess the role that CPIs, specifically carbon taxes and ETSs, can play in supporting decarbonization of the power sector. The report also provides actionable recommendations for policy makers considering implementing a CPI in their countries.

Ratings for the Agriculture Rural Growth and Land Management Project for Madagascar were as follows: outcomes were satisfactory, the Bank's performance was satisfactory, and the monitoring and evaluation quality was substantial. Some lessons learned included: actively promoting private sector participation, particularly among essential EOs in VCs, is crucial for value chain development and integrating small producers. To ensure a consistent supply of quality products, cooperatives need increased working capital and investment in equipment while maintaining marketing autonomy. Despite improvements in property rights and guarantee funds to enhance access to commercial bank loans, banks remain hesitant to finance family farms due to perceived risks. In response, MINAE is creating a more favorable financial environment for the sector, including improved FDA regulation, an e-voucher system for efficient subsidy transfers, and insurance services for family farms with IFC support. Strong M&E systems are critical to collecting reliable information and data, especially for projects covering decentralized and remote areas. Ministry teams in charge of agriculture and land at the decentralized level need to be adequately trained and equipped. The use of ICT/remote sensing can significantly improve the efficiency of M&E systems. The need for a sustainable land information management system should be raised and clearly addressed at the concept stage rather than during or at the end of the project’s implementation. The issue of a land information system must be addressed in parallel with the issue of the land institution in charge of its development. In the future, any investment in the land sector must first ensure that a single operational entity, equipped with qualified human resources and appropriate technology, can manage a dynamic land database sustainably.