Clean Development Mechanism Travels to Lomé

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By Jaya Ramachandran
IDN-InDepth NewsReport

BONN (IDN) - The United Nations Framework Convention on Climate Change (UNFCCC) secretariat has forged a first-of-its-kind partnership to assist development of emission-reduction projects under the Kyoto Protocol in countries that would appear to have been ignored until now.

UNFCC – to which 195 countries are a party- has joined hands with the Banque Ouest Africaine de Développement (BOAD) to set up a support office of the Clean Development Mechanism (CDM) in Lomé, Togo, to help the region's governments, non-governmental organizations and private sector engage in the development of CDM projects.

An agreement for the purpose was signed at the UNFCCC secretariat on October 16, 2012 in Bonn by Executive Secretary Christiana Figueres and the BOAD President Christian Adovelande.

Explaining the significance of the accord, Figueres said: "The field offices will enhance capacity building and provide hands-on support to CDM project developers, thereby reducing the risk for investors in such projects. By building their capacity, underrepresented countries will be able to attract a wider range of investors and thus start benefiting from this important mechanism."

CDM's Lomé office will help allay a consistent concern of the Parties to the Kyoto Protocol about the lack of equity in the regional distribution of CDM projects. One primary cause for the absence of equity is the disparity in institutional and human capacity in underrepresented countries. To address this capacity constraint, the UNFCCC secretariat is seeking to collaborate with organizations that are interested in establishing such CDM support offices in their region.

The UNFCCC secretariat said that it is currently in discussion with other institutions and UN organizations which may also wish to commit their resources to these support offices with the aim to increase the regional distribution of CDM projects. The secretariat is expected to enter into partnership agreements with several regional partners in the coming months in order to establish support offices in Asia, Latin America, the Caribbean and Francophone Africa.

CDM support activities

The work plans for each partnership will be developed independently and tailored to the needs of each region, the UNFCCC informed. However, the overall purpose of all CDM support activities is to:

- identify opportunities for potential projects and programmes of activities eligible under the CDM;

- provide direct support in the development of project design documents for such projects and programmes of activities;

- clarify and address problems identified by third-party validators; and

- identify priority areas for the development of so-called standardized baselines, which enable registration of increased numbers of projects by decreasing complexity, reducing transaction costs and factoring in local circumstances.

The Clean Development Mechanism allows emission-reduction projects in developing countries to earn certified emission reductions (CERs), each equivalent to one tonne of CO2. CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol, ratified by 193 of the UNFCCC Parties. There are more than 4750 registered CDM projects in 79 developing countries. To date, more than a billion CERs have been issued.

While the mechanism has been criticised for helping the industrialized countries that produce the lion's share of perilous emissions to undertake reductions at home, the UNFCCC avers that the CDM stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.

The central feature of the Kyoto Protocol is its requirement that countries limit or reduce their greenhouse gas emissions. By setting such targets, emission reductions took on economic value. To help countries meet their emission targets, and to encourage the private sector and developing countries to contribute to emission reduction efforts, negotiators of the Protocol included three market-based mechanisms: Emissions Trading, the Clean Development Mechanism and Joint Implementation.

Adaptation Fund

The CDM is the main source of income for the UNFCCC Adaptation Fund, which was established to finance adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change. The Adaptation Fund is financed by a 2% levy on CERs issued by the CDM.

The Adaptation Fund is supervised and managed by the Adaptation Fund Board (AFB). The AFB is composed of 16 members and 16 alternates and meets at least twice a year. Upon invitation from Parties, the Global Environment Facility (GEF) provides secretariat services to the AFB and the World Bank serves as trustee of the Adaptation Fund, both on an interim basis. Much to the chagrin of civil society organisations, a review of these interim institutional arrangements has been pending since 2011.

The GEF, according to its website, unites 182 countries in partnership with international institutions, civil society organizations (CSOs), and the private sector to address global environmental issues while supporting national sustainable development initiatives.

The GEF claims to be the largest public funder of projects to improve the global environment. It provides grants for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants.

Since 1991, the GEF has on its own account achieved a strong track record with developing countries and countries with economies in transition, providing $10.5 billion in grants and leveraging $51 billion in co-financing for over 2,700 projects in over 165 countries. Through its Small Grants Programme (SGP), the GEF has also made more than 14,000 small grants directly to civil society and community based organizations, totalling $634 million. [IDN-InDepthNews – October 16, 2012]

2012 IDN-InDepthNews | Analysis That Matters

Photo: CDM benefits Ethiopia | Credit: UNFCCC

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