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| Combat Climate Change to bring Development Finance | |
04 July 2005
A new initiative to attract greater flows of ‘carbon finance’ to Africa was launched on July 4 at the NEPAD/UN meeting, ‘Bending the Arc: the Business of Attaining the Millennium Development Goals’. Speaking at the conference were Mr Klaus Toepfer, Executive Director of the United Nations Environment Programme (UNEP), Mr Peter Pembleton of the United Nations Industrial Development Organisation (UNIDO) and William Greene, climate change consultant with africapractice. Mr Richard Ranken, Director of IFC Sub-Saharan Africa emphasised IFC’s full endorsement of the initiative. Introducing the project, William Greene, Climate Change Consultant and Programme Manager said: "The current size of the carbon project market is around $4.2bn and is set to grow to an estimated $10bn by 2010. By highlighting the potential for carbon finance to create much needed development in Africa, we hope to exert additional moral pressure on international leaders to take tougher action on climate change and support the international carbon trading system" Carbon Finance for Africa is a brand new initiative that works at the heart of 2005’s two priority issues - climate change and African development. Carbon Finance can be accessed by developing countries via the so-called Clean Development Mechanism of the Kyoto Protocol, which allows governments and companies to invest in projects that reduce emissions of harmful greenhouse gases. All projects are required to contribute to the sustainable development of the host country. One ‘carbon credit’ per tonne of avoided carbon dioxide is then issued to the investor. The credits can then be used to offset emissions in developed countries or be sold on international carbon markets. With carbon prices in the European Emissions Trading System trading at between 25-30 Euros per tonne, it makes good economic sense to source credits from Clean Development Mechanism projects. Unfortunately however, Africa has fallen behind in this market, with most projects located in Latin America, China and India. The Gleaneagles G8 plan of action on Climate Change, Clean Energy and Sustainable Development released last week highlighted the critical importance of deploying clean technology across the world for the sake of mitigating climate change and ensuring the sustainable development of developing countries. The plan called on developed countries to "work with developing countries to enhance private investment and transfer of technologies, taking into account their own energy needs and priorities". It also makes explicit note of the importance of the Clean Development Mechanism for achieving this goal, making the commitment that "Those of us who have ratified the Kyoto Protocol will work to strengthen and develop the implementation of the market mechanisms (including Joint Implementation, international emissions trading and the Clean Development Mechanism)" Endorsing the aims of the Carbon Finance for Africa, Klaus Toepfer, Executive Director of the United National Environment Programme said, "the Clean Development Mechanism is one of the innovative parts of the Kyoto Protocol and makes good economic sense...It is not an abstract concept but a concrete investment tool" He went on to explain that in spite of their good intentions, "not a single of the developed countries with emissions reduction targets has a chance to do all this at home...we need the Clean Development Mechanism". Talking about what kind of projects the Clean Development Mechanism should include he said "both clean technology and carbon capture are important". Examples of carbon projects in Africa include solar electricity for remote villages, reforestation projects, the capture of methane or natural gas from landfill sites and oil-rigs. Mr Toepfer concluded that "hundreds of millions if not billions of dollars could be available for the development of African energy infra-structures" and that carbon finance also gave African people "a chance to get a better life". Mr Peter Pembleton of UNIDO, a carbon finance expert emphasised that "a lot of technical assistance needs to be implemented to build capacity and awareness of this financial mechanism". He concluded by underlining the significance of carbon finance for income generation and the reduction of poverty. A meeting of carbon trading and CDM experts was convened at africapractice on Tuesday 5 July to discuss the main obstacles and opportunities for carbon projects across the continent. The Investors Guide to Carbon Finance is due for completion at the end of September and will be launched with an accompanying website at the UNEP Finance Initiative’s Roundtable in New York. Notes: africapractice is a research and communications agency working with governments, international organisations and businesses to advance their commitment to African development. africapractice publishes Africa investor, an international magazine for Africa's investment decision makers. www.africapractice.com The International Finance Corporation (IFC) promotes sustainable private sector investment in developing countries as a way to reduce poverty and improve people's lives. IFC is a member of the World Bank Group and is headquartered in Washington, DC. It shares the primary objective of all World Bank Group institutions: to improve the quality of the lives of people in its developing member countries. IFC is the major Sponsor of the Carbon Finance Investor’s Guide. www.ifc.org The United Nations Environment Programme (UNEP) is the main environmental organisation within the United Nations System and is based in Nairobi, Kenya. Its mission is to provide leadership and encourage partnership in caring for the environment by inspiring, informing, and enabling nations and peoples to improve their quality of life without compromising that of future generations. www.unep.org The United Nations Industrial Development Organization (UNIDO) is based in Vienna, Austria and helps developing countries and countries with economies in transition in their fight against marginalization in today's globalized world. It mobilizes knowledge, skills, information and technology to promote productive employment, a competitive economy and a sound environment. www.unido.org William Greene, africapractice, +44 207 462 7654 |
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