Brazil: Solid Waste Management Program
Waste can have profound consequences for health, safety, and environmental sustainability, particularly in developing countries with limited resources and infrastructure for treating and storing it. Without proper disposal, solid waste can contaminate the surrounding environment, including ground water, and generate significant emissions as it decomposes. Proper management of landfills and solid waste disposal can improve services for local communities, reduce greenhouse gas emissions, and even generate electricity.
In Brazil however, it is estimated that of the 141,000 tons of waste collected daily in 2007, only 39 percent of the more than 5,500 municipalities disposed of their waste at a sanitary landfill or by other adequate means.
The Carbon Partnership Facility is using results-based climate finance to incentivize improved waste management. Through the Integrated Solid Waste Management and Carbon Finance Program, a public-private partnership with Caixa Econômica Federal (CAIXA), the second largest public bank in Brazil, the World Bank is providing financing to CAIXA for landfill improvements and working to promote private sector participation in the solid waste management sector. As methane emissions from landfills decline, payments for the emissions reductions are made by the Carbon Partnership Facility to CAIXA and then onwards to the landfill operators, creating a strong incentive for operators to handle waste in an environmentally sustainable way.
The program is an example of how climate finance, coupled with World Bank investment, can promote sustainable urban development and generate emissions reductions. Between 2013 and 2018, the program successfully helped three landfills to collect and flare over 150 million cubic meters of methane—the equivalent of over 3 million tons of carbon dioxide. These landfills, Santa Rosa and São Gonçalo in the state of Rio de Janeiro along with a standalone project, Candeias, in Pernambuco, captured enough landfill gas to produce electricity for 200,000 households in Brazil. The program also helped create a new environmental and social framework standard for landfills across the country. Under the program, municipal landfills are also exploring productive uses for the captured biogas—for example, to generate electricity that can be used on-site or sold back to the national grid.
The program successfully blended multiple sources of financing, the first fully blended World Bank carbon finance operation in Latin America and the Caribbean region. In addition, CAIXA integrated its lending and carbon finance operations by tying interest rates applied to loans for private entities with Clean Development Mechanism (CDM) performance. This innovative feature provided another financial incentive for compliance with the rigorous CDM requirements and environment and social safeguards under the program.