At the Cop28 climate summit last December, governments agreed to set up a new global carbon credit market under Article 6.4 of the Paris Agreement – and a host of fossil fuel firms and their middlemen are now trying to cash in by making their projects eligible for trading.

Developers applied for thousands of projects to be transferred over from the old discredited Clean Development Mechanism (CDM) to the new market that will be established, before the deadline of January 1 this year.

Most of these projects are for renewable energy – which, while good for the climate, have stirred debate. Critics argue that they do not need additional funding from selling carbon credits because they are profitable without it.

However, more controversial are ten projects Climate Home News has identified, based largely in Asia, which backed the construction of power plants that run on natural gas, one of the fossil fuels governments agreed to transition away from at Cop28. 

If approved by their host nations, the projects would transfer more than 10 million old gas-linked credits – equivalent to the reduction of 10 million tonnes of carbon dioxide (CO2) emissions a year – to the new Paris carbon market.

“These projects are entirely inappropriate,” said Carbon Market Watch researcher Jonathan Crook. “Some were registered as far back as 2009. It’s unreasonable to assume they expected to rely on revenue from a new market mechanism in 2024 – not to mention that these projects may lock in fossil fuel emissions and infrastructure for years to come, among other issues.”

Clean, cheap or fair – which countries should pump the last oil and gas?

The Integrity Council for the Voluntary Carbon Market was set up in 2021 in a bid to ensure that carbon credits deliver on the emissions reductions they have promised and have a positive impact for the climate. In its categorisation of different types of carbon credit, offsets issued for gas-fired power plants are given the worst ranking.

Similarly, BeZero, a ratings agency for carbon credit projects, looked at three of the CDM gas projects that have applied for transfer to the new market. It gave them a ‘C’ grade, meaning they “provide a very low likelihood” of reducing emissions by as much as they claim. 

It cited the “minimal impact” of carbon credit revenues on the project’s overall financial situation and the risk of methane leaks from gas infrastructure that would make the projects more polluting than asserted.

Chinese gas-fired plant

The biggest project is a gas-fired power plant built by China’s state-owned oil and gas company CNOOC and Japanese conglomerate Mitsubishi in 2010 in the province of Fujian, China, just across the sea from Taiwan.

To fire the plant’s four turbines, CNOOC and Mitsubishi imported gas from an Indonesian gas field called Tangguh, which they both had stakes in, through the CNOOC-owned Fujian gas import terminal.

In addition to the income they received from selling the gas, importing it through the terminal and then selling the electricity it produced, they also submitted an application to the CDM to develop and sell carbon credits linked to the plant.

By their own calculations, the plant would emit 2.3 million tonnes of CO2 a year when fully operational. But if they didn’t build it, they said the electricity would come from coal, emitting over 5.3 million tonnes of CO2 a year. So they claimed credits for reducing the amount of CO2 that would have entered the atmosphere by an annual 3 million tonnes.

Justifying this assumption, they said that oil was too expensive and zero-carbon alternatives were not viable as an alternative. Most of Fujian’s hydropower potential had already been tapped, while wind power was “just start-up” and “of seasonal nature”, they added. They did not even mention solar power  – now the cheapest electricity source.

However, coal’s main competitors in the province are not gas but nuclear and hydro, power sources that do not emit greenhouse gases. Wind power has also grown rapidly in the province since the gas-fired plant was built.

Lauri Myllyvirta, a senior fellow with the Asia Society Policy Institute, told Climate Home: “The premise that power generation growth would come from coal if a new fossil gas plant wasn’t built was never true and certainly is not true today.”

Mitsubishi withdrew from the carbon credit project in 2022. While CNOOC remains involved, the main project participant is now a company called Europe New Energy Investment Capital, run by a Chinese citizen called Dongquan Yang.

A spokesperson for CNOOC said the project “is out of the scope of CNOOC Limited’s business operations”. Asked how that was compatible with CNOOC Fujian Gas Power Co., Ltd being listed as an authorised participant, the spokesperson did not reply. 

Indian carbon-credit developer

Fossil fuel firms are not the only ones trying to monetise carbon offsets from existing gas power plants. Documents show that Indian company EnKing – which has since changed its name to EKI Energy Services Ltd and claims to be the world’s biggest developer of carbon credits – is involved in three of the Indian gas power projects identified.

Last August, Climate Home revealed that EnKing vastly overestimated the benefits of carbon offsets linked to cookstoves in rural India and helped sell those junk credits to oil and gas giant Shell.

Cooking the books: cookstove offsets produce millions of fake emission cuts

Working with fossil fuel companies, EnKing used a methodology (AM0025), under the old Clean Development Mechanism, to derive credits from the building of gas-fired power plants in India.

The successor to this methodology is still technically up and running – but Verra, one of the main international carbon credit verifiers, has declared it inactive due to lack of use.

According to Crook of Carbon Market Watch, it is “extremely unlikely” that this type of methodology will be applicable under Article 6.4, which will govern the new UN carbon market when it launches. EnKing did not reply to a request for comment.

‘Not good practice’

To oversee the new carbon market, governments have agreed to set up an Article 6.4 supervisory body, made up of government climate negotiators. But the rules agreed for it so far offer little power to reject old CDM credits from gas-fired power plants. 

The host countries of those projects – including China and India – could refuse to authorise them, but they could still be sold, branded as “mitigation contribution units” under Article 6.4.

These are a lower class of carbon credit agreed at Cop27 which do not require authorisation by the host country as it does not need to do a “corresponding adjustment” for them, which means wiping the credits’ emissions reductions from its accounts.

Carbon credits talks collapse at Cop28 over integrity concerns

Mitigation contribution units cannot be counted towards national emissions goals set under the UN climate process, but they can be bought by companies and used for other purposes. That means the firms trying to sell carbon credits from old gas power stations just need to find buyers to make a profit.

Crook said such deals “wouldn’t be good practice”. “Retiring these credits paradoxically rewards fossil fuel companies for locking in emissions,” he added.

The post Fossil fuel firms seek UN carbon market cash for old gas plants appeared first on Climate Home News.

Climate Home analysis shows that renewable energy investments make up four-fifths of all projects seeking a transfer from the old Clean Development Mechanism (CDM) to the new system under article 6.4 of the Paris Agreement.

Experts have long written off the vast majority of credits produced from renewable energy as junk because they often already provide the cheapest sources of power in most of the world and selling offsets to fund them does not have any additional impact on emissions.

Some of these projects have also been accused of human rights violations such as forced evictions for the construction of large dams.

Harry Fearnehough from New Climate Institute told Climate Home that “it could definitely undermine the credibility of the mechanism because, while there’s still uncertainty over what it will look like, as a starting point you have a huge supply of low-quality offsets that are potentially available at a very low cost”.

Established in 1997 by the Kyoto Protocol, the UN’s CDM allowed rich countries to meet some of their climate obligations by financing emission-cutting projects in poorer ones.

The programme has received widespread criticism for its patchy human rights record and for failing to deliver promised climate benefits. Supporters of a new mechanism currently being developed under article 6.4 of the Paris Agreement say it is an improved, higher-integrity successor to the CDM.

Winning a lifeline

Countries are still wrangling over many aspects of the future market, but one much-debated issue was settled at Cop26 in Glasgow.

Under pressure from Brazil, Russia, China and India, countries agreed that a vast number of projects originally created under the CDM were allowed to migrate to the new mechanism. This handed them the chance to significantly extend their lifespan and their potential credit sales.

Project developers had until the end of December 2023 to fill in a simple two-page form and submit their transition requests.

Azerbaijan appoints fossil fuel execs and scandal-hit officials to all-male Cop29 committee

Of the nearly 3,500 eligible projects, over a third (1,284) seized that opportunity.

In total, the projects that have requested transition by the deadline could supply 1.4 billion tonnes of carbon credits between 2021 – the start year for accounting purposes set by the regulation – and 2035, according to a preliminary analysis by NewClimate Institute shared with Climate Home. That is more than the annual CO2 emissions of Germany.

While a relatively small share of the projects opted in, they account for approximately three-quarters of the potential supply of carbon offsets.

That’s because some of the programmes seeking to move could produce an outsized volume of credits. The two biggest ones – a hydro plant and a nitrous oxide emission reduction scheme, both in Brazil – each have the potential to issue around 6 million tons of offsets a year. That’s similar to the annual emissions of Sierra Leone.

Fearnehough says that “very few, if any, of these credits are genuinely likely to be additional”, going beyond what countries would do anyway without the carbon finance.

“A key reason for this is that the CDM was really only scheduled to run up to the end of 2020,” he added. “No investor would have made a decision purely based on expecting revenues from credits in the 2020s because, quite simply, there was no political indication that the possibility to move over to a new mechanism would exist”.

Climate and social concerns

That is particularly true for the renewable energy projects vastly dominating the list. Experts say they are highly likely to fail the additionality test, meaning their credits do not bring any climate benefit. When used to compensate for real emissions elsewhere, they result in more greenhouse gases entering the atmosphere.

The reason is simple. Many renewable offsets came into existence just as solar and wind power were becoming the cheapest source of energy in most countries. After years in operation, they are likely to be profitable from the sale of the electricity alone, without the need for additional revenues from carbon offsetting.

A 2016 study commissioned by the European Commission concluded that the vast majority of these projects “are not providing real, measurable and additional emission reductions”.

The Jirau hydropower plant is located on the Madeira River, in Brazil. Photo: UHE em Jirau/Flickr

Hydropower projects carry even more concerns as their implementation is often marred by human rights problems. Vulnerable communities relying on rivers for their livelihoods are particularly at risk of forced displacement.

The largest project applying for the transition to the new mechanism – the Jirau mega-plant in Brazil’s Rondonia state – is a case in point.

Over the years the project has faced multiple accusations of stoking tensions, pushing indigenous people away from their territories and breaching the rights of the workers that built it. Engie, the project’s developer, previously rejected any accusations.

Other categories of activities featuring prominently on the transition list have raised major concerns in the past.

Credits from projects which claim to cut or stop the emission of industrial gases such as nitrous oxide (N20) and trifluoromethane (HFC-23) were banned by the EU in 2013 for use in its emission trading system.

That’s because, according to studies, they created “a perverse incentive” to increase the production of gases depleting the ozone layer.

Countries’ authorisation dilemma

While the CDM projects have now made their move and requested transition, they are not automatically through to the new system.

Standing in their way is the need to receive a formal authorisation to proceed from the countries where their activities are located. Governments have until 2025 to make a decision and, experts predict, it won’t be a straightforward one.

“A la carte menu”: Saudi minister claims Cop28 fossil fuel agreement is only optional

“It’s not a guarantee that all host countries will want to approve all of these projects”, according to Jonathan Crook from Carbon Market Watch, who said there would be contrasting forces at play.

“If they authorise them, they have to do corresponding adjustments, which they might not be so keen on since those emission reductions will be deducted from their [NDC climate plans]. But, at the same time, most projects are located in very large countries and it may not make a big difference to their plans”.

The answer to this dilemma will rest primarily in the hands of China, India and Brazil. Between them, the countries host around three-quarters of all projects that are looking to migrate under article 6.4.

Spotlight on three countries

Observers of climate talks said their governments all pushed for rules that would grant a lifeline to as many CDM projects as possible when those negotiations took place at Cop25 in Madrid and Cop26 in Glasgow. But, since then, they have been conspicuously quiet on the topic.

Climate Home approached the respective carbon market authorities in the three countries but did not receive a response at the time of publication.

Trishant Dev is a carbon market expert at the Delhi-based Centre for Science and Environment. He expects there will be “a lot of pressure on the Indian government to let projects through from the carbon industry, which is thriving in the country”.

But, at the same time, he thinks the government will take time to properly understand all the pros and cons of allowing such authorisations. “It’s a chaotic process. Countries want to make sense of what the final outcome of the article 6 discussions will be and how that will interact with domestic carbon markets they are constructing”, he said.

Who will buy the credits?

Article 6 talks collapsed at Cop28 last December after attempts led by the EU to introduce tighter controls and further integrity safeguards had been rebuffed by the US. Negotiators will try again this year to hammer out a deal on many technical issues that need to be resolved before trading of offsets can begin.

Meanwhile, questions also remain on who will be interested in using those credits, once the market is up and running. Countries, corporations and individuals could all be potential buyers.

Comment: High stakes for climate finance in 2024

New Climate Institute’s Fearnehough said there doesn’t seem to be much appetite from countries based on what they are saying in public. “But it’s hard to predict what will happen when suddenly the offsets are available and you have an easy option to meet your NDC targets”, he added.

The credits may gain more interest from polluting companies. Banks, airlines and industrial heavyweights keep buying large volumes of questionable renewable energy offsets despite the known concerns, a Bloomberg investigation found. Dressing them up with the UN stamp of approval may add to the appeal.

Carbon Market Watch’s Crook believes much will depend on the transparency of the system – something still largely unknown. “If there is a very transparent register disclosing who purchased how many credits and for what purpose, that would disincentivize companies from transacting low-quality credits out of reputational fears,” he said. “But if it isn’t transparent, buyers may not be as careful with due diligence or may be even encouraged to buy bad credits since there won’t be scrutiny”.

A previous version of this article stated that projects requesting transition could provide 700 million tonnes of credits until 2035, while the correct figure is 1.4 billion tonnes. That was due to a computational error in the model used by NewClimate Institute for their analysis of which we were informed after publication.

The post Junk offset sellers push to enter new UN carbon market appeared first on Climate Home News.

Viewers complained the advert for its Climate Neutral Now scheme appeared to mock green lifestyle choices and downplay the urgency of the climate challenge.

Published on Facebook and Twitter, the video struck a jokey tone, showing a man trying to give up his car, flights, steak and even breathing to cut his carbon footprint.

“OK, we know that’s slightly impractical, so here’s the real solution,” said the narrator, directing viewers to a revamped website where they can pay to cancel emission reduction credits issued through the Clean Development Mechanism (CDM).

Cancelling your holidays, selling your car, taking cold showers? Stop breathing, even? There are easier ways to take #climateaction: visit our website to calculate your emissions, reduce & offset them, and …. breathe easy! https://t.co/naUkZguz49 #climattitude pic.twitter.com/ZqdzHH4rsg

— UN Climate Change (@UNFCCC) August 29, 2018

Carbon Market Watch reacted with shock. The Brussels-based NGO is preparing to launch a campaign to end the CDM, citing concerns about its environmental integrity.

The UN is promoting “junk credits,” said policy director Femke de Jong. “For me [the video] sends the message that they are not being very serious about the urgency of climate change.”

Jesse Bragg of Corporate Accountability agreed. “Is this really the message the UNFCCC should be sending? We need people and governments taking urgent action that actually leads to emission reductions and keeps fossil fuels in the ground, not buying themselves out of it and proliferating the climate crisis.”

Offset programmes were ineffective “money-making schemes”, said Bragg, adding it was “completely inappropriate” for the UN to promote them.

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On Thursday afternoon, a spokesperson for UN Climate Change issued the following statement:

“We understand and respect the concerns that have been raised with regard to the recent video on UNFCCC website to support the re-launched online Platform for Voluntary Cancellation of Certified Emission Reductions (CERs), where all stakeholders can measure their emissions and offset those which cannot be avoided.

“This initiative is part of a broader campaign Climate Neutral Now, which engages all stakeholders to reduce carbon emissions and boost climate action with the purpose of meeting the goals of the Paris Agreement. Climate Neutral Now encourages emission reductions at local level, but also recognizes the need to offset until further reductions can be achieved by supporting emission reductions globally.”

Arthur Rolle, chair of the CDM executive board, said in a press release on Wednesday that 300,000 tonnes worth of carbon credits had been cancelled in 2,500 transactions since the Climate Neutral Now platform was launched in 2015.

“I hope that this upgrade will motivate even more users, individuals and businesses to take the climate action we urgently need. And we hope to become an even more attractive partner for peer organizations and initiatives who also promote urgent climate action and who wish to collaborate with us,” he said.

Established under the Kyoto Protocol, the CDM allowed rich countries to meet some of their emission reduction obligations by funding projects in the developing world. As the global context changed, it became reliant on the voluntary market: businesses and individuals choosing to offset their emissions. They can boost the market by cancelling credits generated by existing projects.

The CDM has been dogged by reports of fraud and perverse incentives. Multiple reports have questioned whether its projects are truly “additional” or would have happened anyway. A 2016 study commissioned by the EU found “fundamental flaws” in the scheme, saying only 7% of credits had generated “real, measurable and additional” emission reductions.

Fifa accused of greenwashing in World Cup carbon offset scheme

The UN ad encouraged viewers to reduce their emissions “as much as you can” before offsetting their remaining carbon footprint. But viewers perceived the video as mocking climate-friendly lifestyle choices, describing it in twitter comments as “shameful” and “bizarre”.

Shameful video. Some at #UNFCCC should pay more attention to the message that will come out of the IPCC in October – particularly in relation to the role that lifestyle choices that lower energy demand can play to achieve the #1o5c goal. Please take this video down ASAP

— Sébastien Duyck (@duycks) August 29, 2018

Bizarre. Would work well as satire, not as a serious commercial. Did @UNFCCC really produce this themselves?

Carbon offsetting may be part of the solution, but it’s surely no magic wand but a gamble. Framing it like this, mocking necessary lifestyle changes, is very unhelpful.

— Adam Leckius (@adamleckius) August 29, 2018

Why are you trying to discourage people from doing actually effective things like driving less and not eating meat?

— Rob Wallis (@ghezbora) August 29, 2018

This article was updated on 30/08/2018 to reflect that the video had been taken down, and later to incorporate a statement from UN Climate Change.

Republish this article

The post Keep calm and carry on flying and eating steak: UN Climate Change ad criticised appeared first on Climate Home News.

Some sugarcane factories in India run on renewables thanks to the CDM (Pic: Adeel Halim/UNFCCC)

By John McGarrity

The main tool that funnels finance to developing countries could get a new lease of life from a possible global climate deal at the end of next year, as deeper carbon targets will mean more demand for offsets, the head of the UN’s main carbon offset scheme said.  

Hugh Sealy, who was recently elected as chair of a panel that overseas carbon reduction projects in developing countries, said the Kyoto Protocol’s Clean Development Mechanism (CDM) would remain relevant for policymakers despite chronic oversupply and bargain basement prices.

A surplus of offset credits in EU’s emissions trading scheme and proposals by Brussels policymakers to do without the credits means has raised fears that the CDM is in terminal decline, but Sealy said the $300 billion UN scheme could make a comeback later in the decade.

“The CDM remains the only viable international currency in offset credits that we have, and raised ambition in any post-2020 agreement means prices are bound to rise, rekindling interest from investors,” said Sealy, a longtime negotiator for Grenada, in an interview with RTCC.

Controversy about the environmental integrity of some projects, a lack of certainty at climate talks on a future role for offsets and gripes about bureaucracy have been a major headache for the UN-appointed panel over the last decade.

But Sealy said he is satisfied that improvements to the scheme had struck the right balance between the needs of investors and scrutiny by green groups.

“In my own region the CDM would have helped speed up the use of clean energy but by the time opportunities improved for smaller projects in the Caribbean and Africa, the prices collapsed because of oversupply. It’s as if the music was turned off,” Sealy said.

Report: Global carbon market could grow to $87 billion in 2014

Prices for UN-backed offsets have collapsed 95% collapse since their peak in 2008, meaning new projects have slowed to barely a trickle.

But if negotiators overcome years of deadlock and agree a new climate deal to take effect after 2020, then developing countries are likely to consider the CDM as a way of reaching deeper targets to cut emissions of climate-changing gases, he added.

“For the CDM it’s crucial to seek out new markets, a lot more countries will be required to cut emissions in a post-2020 treaty and there’s a whole framework in place that can measure emissions cuts and verify them,” Sealy said, pointing to the growth of emissions trading schemes in both developed and developing countries.

A report from a pro-carbon trading lobby earlier this month heralded the growth of cap-and-trade schemes worldwide, but few besides the EU ETS have so far allowed the use of the UN-backed credits.

The EU has proposed not to rule out the use of CDM credits completely after 2020, and may use offsets if sceptical member states are persuaded to deepen emissions cuts beyond the 2030 target of 40% outlined in January by the European Commission.

“We will continue to lobby Brussels for a continued role for the CDM but we’ve learnt our lesson not to rely on one demand source (the EU) for credits. I expect the evolution of the emerging schemes worldwide, and potential for growth in the voluntary market, will benefit the CDM,” Sealy said.

Supporters of UN-backed offsetting will have to wait and see if talks on reducing global emissions from the aviation sector could allow the use of offsets.

And in the shorter term developers of projects fret that some schemes will wither on the vine because of a lack of cash.

Last month a group that represents project developers say that abandoned projects would vent climate-changing gases into the atmosphere rather than pay fees to the UN to keep their projects going.

Terminal decline?

Such a scenario would be a further blow to a scheme that is estimated to have generated $300 billion of finance for projects such as wind turbines and energy efficiency in fast-growing developing economies.

Concerns that UN’s offset scheme is in terminal decline were compounded last month by Norwegian certification company DNV’s decision to with withdraw from checking projects.

But Sealy said his panel has worked hard to keep administration costs low for developers.

He said: “A few very small projects may decide to stop operating but we won’t see larger schemes that cut powerful greenhouse gases falling by the wayside. They’ll continue to operate.”

The post UN climate deal could ‘revive’ offset market says CDM chief appeared first on Climate Home News.

By Ed King

The UN’s carbon market requires “bold” action to get it back on track, the new chair of its governing panel has warned.

Hugh Sealy, an environmental scientist from Barbados, said the Clean Development Mechanism is a “fantastic tool” but it needed “imagination” to encourage greater use.

“These are challenging times for the CDM. The ship is sound, in the best shape ever after years of improvement, but there is little wind in her sails,” he said. “We need to use our imagination and be bold in looking for ways to encourage use of this mechanism.”

Sealy took over as head of the CDM Executive Board last week, with Germany’s Lambert Schneider, a researcher in carbon markets, elected as his deputy.

CDM credits can be used by governments and businesses to meet carbon targets, and since its launch it has generated more than $315 billion in climate finance.

But investment has fallen sharply, largely due to a lack of new ambitious climate policies. In January 10 new projects were submitted, compared to a peak of 319 in April 2012.

As a result there has been a surplus of credits on the markets, and the value of the carbon credits the CDM generates has fallen by 95% in the past five years to around $0.55.

In an attempt to drive up interest, the UN invited countries at the last major climate summit in Warsaw to control their greenhouse gas emissions using the CDM.

It has also tried to encourage companies, agencies and large events wishing to offset their emissions as part of social responsibility initiatives to use the Mechanism.

Joergen Fenhann, a senior scientist at UNEP who records all new applications in the CDM Pipeline told RTCC the basic structure of the UN’s carbon market is in fairly good shape, but lacks interest as a result of wider political and economic factors.

“I think it’s ready to handle radical emission reduction if you have the demand, and it will come, because according to IPCC the reductions are so large we need the market, but it will take time,” he said.

The post ‘Imagination’ required to save UN carbon market says new chair appeared first on Climate Home News.

(Pic: Flickr/barbourians)

The UN has opened a carbon markets office in the Colombian capital Bogota, its latest regional initiative to boost interest in emissions trading.

The UN climate convention and partners at the development bank of Latin America (CAF) aim to use the regional collaboration centre to drive interest in the Clean Development Mechanism (CDM).

Bogota is the fourth such office to open in the past year. The first centre opened in Togo, followed by Kampala and Grenada in July.

One of two emissions trading schemes under the Kyoto Protocol, the CDM is aimed at driving low carbon investment in developing countries.

The past 12 months have seen CDM credit prices drop by 80% to around the €0.50 cent mark.

An oversupply of credits, sluggish economic growth and lacklustre climate policies have been blamed for this drop, forcing the UN to explore other initiatives to drive demand.

“The CDM has demonstrated what can be achieved when we use markets to incentivise action on climate change and development,” said  UNFCCC executive  secretary  Christiana Figueres.

“The RCC in Bogotá will help tap the potential for CDM projects in Latin America and serve as a working example of the kind of inter-agency cooperation necessary to tackle climate change.”

The Bogota office’s priorities are to identify opportunities for potential programmes of activities eligible under the CDM, and to support the design and development of projects.

According to the UN, the CDM currently operates in 88 countries, and has spurred more than US$215 billion of low-carbon investment in developing countries.

The mechanism has also issued credits equal to 1.3 billion tonnes of CO2, and added more than 110,000MW of renewable energy to global electricity grids.

The  office in Bogota will become operational on 1 September 2013 and provide support in all countries in Latin America.

The post UN opens carbon trading office in Bogota appeared first on Climate Home News.

Last year’s first prize by Dinesh Malte, showing a wind farm CDM project (pic: UN)

The United Nations Framework Convention on Climate Change is inviting photographers to submit work highlighting how the Clean Development Mechanism (CDM) is changing lives.

Photographers, both amateur and professional, are invited to submit striking images illustrating how CDM projects are bringing about benefits in health, sanitation, infrastructure development, rural electrification or another area.

Entries will be judged by a series of experts drawn from the fields of industry, civil society and the arts. They will be judged according to creativity, composition, artistic merit and the persuasiveness of the story they tell.

Film makers are also invited to send in a video of themselves completing either the phrase “People should know about this CDM project because” or “People should know about the CDM because” in 30 seconds or less.

The competition’s sponsors have generously offered a $2000 prize for the winners of the photo and the video contest.

The CDM can prove a complex subject, and judges are looking for videos that concisely explain the benefits of a registered CDM project, or that talk clearly about how the CDM is contributing to the international response to climate change and sustainable development.

Winning photographers will have their work displayed in a special booth at the UNFCCC Climate Change Conference in Warsaw in November 2013, while shortlisted material could feature in print and promotional website, including on the UNFCCC website and social media.

The deadline for entries is 30 September at midnight. Winners will be notified by email before 1 November 2013. Visit the UNFCCC website for further details.

The post UN launches 2013 climate change photo contest appeared first on Climate Home News.

Bogota (pictured) and Manila have been identified as the new regional bases for the UN’s carbon market (Pic: David Berkowitz/Flickr)

The UN plans to open two new offices aimed at boosting the world’s flagging carbon markets by promoting trading in Latin America and South East Asia.

The move is part of a new strategy targeted at stimulating interest in the UN-run Clean Development Mechanism (CDM) in developing countries.

The CDM allows developed nations to offset their emissions by investing in low-carbon projects in poorer parts of the world.

Prices of CDM certified emission reductions (CERs) collapsed by 80% in 2013 to around 55 Euro cents due to an over-supply of credits, weak economic growth and unambitious climate policies.

“The choice was to drop anchor or stay the course. We ultimately decided to take this time to maintain and improve the CDM and seek opportunities where they might be found,” said Executive Board Chair Peer Stiansen.

“This meant engaging with stakeholders through partnerships in key locations, especially in underserved areas showing interest and potential.”

According to UN documents, the new offices are set to be based in Bogota and Manila, and will complement similar regional centres operational in Africa and the Carribbean.

“Setting up the centres required a leap of faith. We have a responsibility to implement the mechanism and feel strongly about its value, so we made that leap,” said Stiansen.

“We’re in a constrained market, and will of course be keeping a close eye on progress, but the early results from the centres are encouraging, for the CDM and Africa.”

The CDM board has also revised the application process for new projects, which it says will promote transparency and reduce costs.

The CDM currently operates in 88 countries, and has spurred more than USD 215 billion of low-carbon investment in developing countries, issued credits equal to 1.3 billion tonnes of CO2, and added more than 110,000 Mega Watts of renewable energy to global electricity grids.

Earlier this month it passed the 7000 project mark after certifying a biogas capture plant in a Philippine chicken farm, which will reduce emissions by 48,000 tonnes, equivalent to 10,000 cars.

The post UN to open carbon market offices in Bogota and Manila appeared first on Climate Home News.

Grenada in the Caribbean is the setting for the UN’s third collaboration centre. (Source: rappensuncle)

The UN has taken steps to accelerate the development of carbon markets in the Caribbean with the opening of a regional collaboration centre in Grenada.

The office will help local governments, NGOs and businesses interested in accessing the Clean Development Mechanism (CDM) identify projects and opportunities.

The CDM is the only truly global carbon market, and is designed to develop low carbon projects in the developing world with financing from richer nations.

“The regional collaboration centres aim to increase participation in the CDM, but their work differs substantially from region to region and from project to project,” said the chair of the CDM executive board, Peer Stiansen.

“The centre in Grenada will focus on the needs of the Caribbean Region in an effort to make it an increasingly attractive destination for CDM projects.”

This is the third regional collaboration centre established by the UNFCCC, with the first in Lomé, Togo and the second in Kampala, Uganda.

Analysts say it urgently needs to boost interest in its carbon trading system in order that it remains relevant.

Yesterday Bloomberg reported an “unprecedented freeze” in UN carbon trading. According to data from ICE Futures Europe, no UN Certified Emission Reduction, or CER, changed hands on July 22 and July 23.

Supply of CERs currently outstrips demand, and prices have dropped by 80% since the start of the year, raising concerns that the mechanism is losing its ability to operate.

Earlier this month, the CDM passed the 7000 project mark with 1,000 new projects having been accepted since February.

The post UN takes steps to boost demand for carbon market credits appeared first on Climate Home News.

The infamous Desertec project has shattered confidence in CSP. (Source: Green Prophet 1)

By Nilima Choudhury

The United Nations Framework Convention on Climate Change (UNFCCC) has approved India’s largest solar project as part of its emissions trading scheme.

The Clean Development Mechanism’s (CDM) latest project is a 100MW concentrated solar power (CSP) installation to be constructed in Rajasthan.

Despite countless delays in the construction process India-based Reliance Power will complete the project under Phase 1 of the Jawaharlal Nehru National Solar Mission (JNNSM), India’s renewable energy programme.

Seven projects were awarded under Phase 1. A total of 470MW of CSP projects, out of which 320MW of projects were delayed forcing the Ministry of New and Renewable Energy (MNRE) to extend the deadline to next year.

Solar developments

Experts say this could be the last major CSP project in India. The technology requires large capital investment and interest appears to be fading around the world, with Desertec’s demise the most high profile casualty of this transition.

In India, ten developers constructing projects worth 315MW have also decided to change technologies due to the drop in price for PV.

“No new CSP projects have been announced in India,” Madhavan Nampoothiri, founder and director of RESolve Energy Consultants told RTCC. “I don’t see any interest in CSP projects from developers.

“Despite its advantages like energy storage and smooth generation of power, CSP is slowly losing its prominence in the solar sector not only in India, but all over the world,” he added.

Others are not so sure, saying this is a temporary blip. “CSP has a very good future in India – just one successful commissioning of a project will be enough to boost the confidence of investors,” said Jeevan Jethani, principal scientific officer at the MNRE.

The project

The project, located in Dhursar, Jaisalmer District, Rajasthan, is expected to generate 2.15 million carbon credits during the initial 10 years of operations.

The installation is expected to sell power from the plant to the grid at Rs. 11.97 ($0.20) per kWh for ten years.

The total project cost is estimated to be Rs. 158 crore (approximately $29 million) and was part financed by the Asian Development Bank (ADB) and the US Export-Import Bank. ADB loaned Reliance $103 million.

Including the current registration, the company claims a total renewable energy portfolio of 1,000MW.

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The world’s largest emissions trading scheme has passed the 7000 project mark, despite continued concerns over its viability and a collapse in carbon prices.

The Clean Development Mechanism’s newest project is a biogas capture plant in a Philippine chicken farm, which will reduce emissions by 48,000 tonnes, equivalent to 10,000 cars.

The news is welcome boost to the UN, which runs the CDM under the Kyoto Protocol.

One thousand new projects have been accepted since February, but certified emission reductions (CERs) prices remain low, having dropped 90% in 2013.

Biogas is produced by the anaerobic digestion with bacteria or fermentation of biodegradable materials such as manure, sewage & crops

“Despite unfavourable market conditions, the CDM continues to provide a mechanism for real emission reductions and real sustainable development for those who wish to use it,” said Peer Stiansen, Chair of the CDM Executive Board.

“The Board will continue its efforts to make the CDM the best tool it can be to reduce emissions and spur development, but Parties must do their part and set ambitious emission reduction targets to incentivize climate action and these types of green growth projects.”

The CDM currently operates in 88 developing countries, allowing companies in the industrialised world to invest in emission reducing projects in developing countries and earn carbon credits in the process.

Over the past decade the CDM has spurred more than USD 215 billion of low-carbon investment in developing countries, issued credits equal to 1.3 billion tonnes of CO2, and added more than 110,000 Mega Watts of renewable energy to global electricity grids.

But with governments setting low emission reduction targets, the demand for credits has collapsed, leading to calls for the market to be saved with a $2.5 billion bailout.

Speaking to RTCC two weeks ago, Joan MacNaughton, vice chair of the high-level policy dialogue that reviewed potential solutions to the CDM’s predicament in 2012, said the CDM would likely play a vital role in any global emissions deal agreed in 2015 and needed to be helped.

“The fund is a temporary, interim means to ensure we can retain its functionality,” MacNaughton said. “The real solution is in increasing the demand for offset credits and that means higher levels of ambition on emission reductions by the parties and reaching that agreement will take some time.

“Until we get an agreement on a new mechanism and higher [mitigation] ambition, then we will be able to take advantage of these projects.

“All of this is not about maintaining the market for its own sake. It’s about retaining it as a means to an end, which is reducing greenhouse gases. Without it the wound continues to bleed.”

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A $2.5bn fund could be enough to keep the UN’s carbon offset market alive until a potential successor is in place as part of the new 2015 climate treaty.

The Clean Development Mechanism (CDM) is currently struggling with the price of offsetting one tonne of CO2 approaching zero.

Joan MacNaughton, vice chair of the high-level policy dialogue that reviewed potential solutions to the CDM’s predicament in 2012, has backed plans for a fund to inject extra money into the market.

The CDM allows companies in the industrialised world to invest in emission reducing projects in developing countries and earn carbon credits in the process. With governments setting low emission reduction targets, the demand for credits has collapsed.

“The fund is a temporary, interim means to ensure we can retain its functionality,” MacNaughton told RTCC. “The real solution is in increasing the demand for offset credits and that means higher levels of ambition on emission reductions by the parties and reaching that agreement will take some time.

“Until we get an agreement on a new mechanism and higher [mitigation] ambition, then we will be able to take advantage of these projects. All of this is not about maintaining the market for its own sake. It’s about retaining it as a means to an end, which is reducing greenhouse gases. Without it the wound continues to bleed.”

The CDM has offset more than 1 billion tonnes of CO2 since its launch (Source: CDM Photo Contest/Nic Bothma)

Governments are currently negotiating a new global climate treaty that is likely to include a new market mechanism.

MacNaughton said that keeping the CDM alive until that point would allow the expertise that it has built up to be transferred to the new instrument.

“If don’t act and we just wait for the demand issue to be resolved we risk losing the functionality that we have in the market and that would be highly regrettable,” she said.

“There is a degree of expertise there in project design, measuring, reporting and verification, things that will be needed for any new market mechanism. That expertise is leaking away.”

The idea for the fund was first mooted in the recommendations made by MacNaughton’s board and carried forward in an independent report funded by the UN climate agency the UNFCCC.

Sources

MacNaughton suggested three potential sources for the fund including a requirement for sectors “not playing a full role in emissions reduction, like aviation” to purchase offsets from the CDM, establishing a voluntary offset programme for the public and businesses or straight government support.

“$2.5bn may sound a lot but that’s not a lot compared to the bank bailouts,” said MacNaughton.

“There is a lot of money going into [government] support for clean energy projects and other emission reduction activities. If some of that money were channelled into this fund it would have a bigger impact because it could leverage private sector investment,” she said

MacNaughton, who is also executive chair of the World Energy Council’s Trilemma programme, said they had found support among the business community for the fund. She remains adamant that the CDM has a long term future.

“After it got over an initial learning curve, which it was inevitably going to have to do, it has issued a billion credits, has proven it can do it, it’s built up the capacity and it’s worth sustaining because of the contribution it is going to make to climate mitigation.”

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The world’s main system of carbon trading needs urgent support from governments if it is to continue functioning effectively and give developing countries access to green technologies.

The UN’s Clean Development Mechanism (CDM) has 6900 registered projects in 86 countries, and has issued 1.3 billion certified emission reductions (CERs) since its launch.

One CER is the equivalent to a tonne of carbon dioxide. But falling demand for these credits and a lack of policy clarity from governments has left the CDM struggling, with prices dropping by 90%.

CDM Executive Board chair Peer Stiansen told a meeting at the UN climate talks in Bonn he was happy with the integrity of the mechanism, but said the global economic outlook and struggling EU emissions trading system indicated there would be no quick fix.

“We have proved we can deliver on scale, and that is an important achievement, because we need scalability for this mechanism,” he said.

“But currently we are seeing low demand in CERs, which rests in low prices and lack of incentives. It is very frustrating, and we’re seeing the market cannot continue for project developers, and many are leaving.”

CDM projects aim to develop low carbon solutions in developing part of the world (Photo: Curt Carnemark/World Bank)

Last September a panel set up to assess the health of the CDM warned that allowing it to fail would make it harder to raise finance in the future to help developing countries cut carbon.

Joan MacNaughton, vice chair of the high level panel and a former UK civil servant, told the Guardian: “The carbon market is profoundly weak, and the CDM has essentially collapsed. It’s extremely worrying that governments are not taking this seriously.”

New restrictions on what types of projects would be accepted by the CDM were introduced at the end of 2012, leading to a spike in applications before that came into effect.

Since then Stiansen says they have fallen to around 20 a month.

It’s a substantial drop compared to previous years, and the chairman suggested it was indicative of the current uncertainty in the markets over the global desire to pursue a low carbon agenda.

“We hope this will be a temporary dip and that countries will move and make decisions to create more demand,” he said.

“In 2014 there is a provisional step-up of ambition on the Kyoto Protocol, and positive movements in the ADP [talks on a global emissions deal in 2015] would hopefully raise expectations and raise more demand.”

The UN is taking steps to simplify what critics say has become a complicated and lengthy application process.

Stiansen said the initial registration and review process on new submissions will be streamlined to just over two weeks.

The CDM has also opened three offices in Africa, with a fourth planned in the Carribbean, to promote applications from those regions.

“What we have to offer is our moral support. The ones who can take action would be the parties – such as voluntary cancelation of CERs,” he said.

“It is limited what the board can do. I want to re-emphasise this is a problem of demand – I do not see this as a problem of supply.”

Stiansen’s bleak forecast is shared by analysts, some of whom fear continued lack of demand could hit investment in green development projects in poorer parts of the world.

Anja Kollmuss from Carbon Market Watch told RTCC the CDM board has to tighten its application process to ensure projects are environmentally acceptable, but admits that unless governments took steps to drive demand the short-term outlook is bleak.

One hope is that a possible aviation emissions agreement could boost demand for CERs.

Earlier this week the world’s leading airlines called on governments to agree to a new greenhouse gas offsetting scheme for the aviation industry.

“What may happen is that if ICAO [international aviation body] comes to an aviation agreement and they do agree on a market-based mechanism there might be an increase in demand from aviation – but this wouldn’t start till 2020.

“I’m not too optimistic that anything will change anytime soon in terms of prices in the CDM”

The post Global carbon trading system needs urgent support warns UN chair appeared first on Climate Home News.

The head of the world’s only global emissions trading scheme (ETS) says EU climate ambition is central to ensuring carbon markets are a success.

In an email interview with RTCC, Peer Stiansen, the new chairman of the UN’s Clean Development Mechanism (CDM) Executive Board, warns the EU ETS was “critical in development of the mechanism”.

“The recent down-turn in the EU ETS highlights the urgency of identifying or developing additional sources of demand for CDM units,” he writes.

And despite warnings last year that the CDM had “essentially collapsed”, Stiansen says he remains confident it can survive the current downturn provided governments back low carbon policies.

“The CDM needs long-term commitment…concrete action is needed for the industry to come back,” he says.

Read the full Q&A with RTCC below.

Peer Stiansen – Chairman of CDM Executive Board

RTCC: Why do you think the CDM and more broadly global carbon markets have struggled in the past few years? Is this solely down to the economic downturn or are there other factors?

Peer Stiansen (PS): The CDM was set up as a tool to help countries meet their emission reduction targets.

If those targets lack ambition, then the tool is less in demand. Of course, the economic downturn in Europe has clearly had an effect, the EU ETS being the biggest market for CDM credits.

However, I see a growing interest in market approaches and mechanisms – in Australia, New Zealand, at the state and regional level in the US and Canada, in China and elsewhere. I believe this reflects that markets will become crucial when the response to climate change is more ambitious, and that what we see now is a temporary downturn.

RTCC: The CDM Policy Dialogue report last September was gloomy. What specifically gives you confidence that it can be reborn as an effective mechanism?

PS: To me, the clearest, most important finding of the policy dialogue was that the CDM is an important mechanism that has done a great deal of good, and countries need to protect and enhance what they’ve created.

My optimism comes from the fact that the CDM works and that tools like the CDM are essential – provided there’s a useful level of ambition on the part of countries. CDM is here and it works. It has also shown an amazing ability to evolve and improve.

RTCC: Can we look at some of the recommendations in the report, first, regarding the collapsed price of CERs – has the “immediate crisis of demand” been satisfactorily resolved?

PS: The price of CERs is even lower this year. As a result, the number of projects entering the pipeline has fallen off, to around 20 a month. This means that industry people engaged in the CDM are looking elsewhere.

It might be hard to convince them to come back. I’m the Chair of the CDM Executive Board, so I’m extremely concerned about the health of the mechanism.

However, I’m a great deal more concerned about what the health of the mechanism says about countries’ level of ambition to reduce emissions. One step in the right direction was that Doha gave legal certainty about the continuation of the Kyoto Protocol and the CDM, but this was clearly not enough.

RTCC: Do you think governments buying excess credits from the market to stimulate the price is a good idea?

PS: I think everyone would prefer that the price were high based on the fundamentals – resulting from countries reducing emissions in response to what the science tells us is necessary to address climate change.

I think that the governments should weigh how best they can contribute to the CDM in the coming years. We know that money is tight. They will have to defend what they buy to their taxpayers, so they need to spend wisely.

The CDM needs long-term commitment. It would probably be most useful if countries or regions simply expressed their support for the tool that they’ve built and indicate their intention to use the CDM, for example in their emerging cap and trade markets. Concrete action is needed for the industry to come back.

RTCC: It also calls for “greater access to underrepresented regions”. A common criticism is that projects are disproportionately located in China and India – is this a situation you want to change?

PS: We should appreciate that CDM is a success in China, India and other countries. The Board, as well as our political masters, have always taken measures to enhance regional distribution, and I am sure we will continue to look for ways to spread the benefits of the CDM.

We’ve done this mainly through capacity-building, creation of targeted methodologies, a loan scheme, simplification of rules and development of new approaches, such as programmes of activities and standardized baselines.

Most recently we’ve agreed to the setting up of regional collaboration centres with partner agencies and institutions in Africa. The idea is to work closely, on the ground, to identify opportunities and remove unnecessary barriers to project creation. As a Board, we’re looking closely to see whether this initiative will bear fruit. But again, more demand is the best response.

RTCC: Some projects and recipients have raised eyebrows (the UAE state run property firm that built Dubai’s indoor ski slope for example). What must the CDM do to protect its reputation in the future?

PS: First, there is no such project registered under the CDM. The closest thing I’ve found to that is a notice of prior consideration, a sort of statement of intent, by a developer of shopping malls.

Unfortunately, your example is familiar. In my own country, media have several times criticized the CDM for projects that never even got to validation, and these stories do shape public perception. There has been steady improvement of the CDM since its launch, much thanks to constructive criticism by those genuinely interested in improving the mechanism.

There are now more than 6700 projects registered in 85 countries, and many more projects are in the pipeline. It will be a real shame if imagined or outdated criticisms prevent the CDM from delivering on its potential.

RTCC: To what extent does the CDM’s future depend on the EU-ETS performance – are these interlinked issues?

PS: The European market has been the main demand centre for CDM units by far.

It’s fair to say that demand from the EU ETS was critical in development of the mechanism. So, whatever happens in the EU ETS is significant for the CDM. The recent down-turn in the EU ETS highlights the urgency of identifying or developing additional sources of demand for CDM units.

I see several potential sources of demand: demand in emerging market systems, demand from development agencies wishing to make use of the validation, verification and sustainable development aspects of the CDM to further their goals, and companies wishing to use CERs as part of corporate social responsibility programmes.

For example, I’ve learned of a World Bank fund of more than 50 million dollars earmarked to buy CERs at above-market prices from projects in least developed countries.

And, I’ve heard of interest among stakeholders in using CERs as part of an emission reduction programme in some developing countries, whereby companies could use CERs to achieve or supplement reductions.

RTCC: What role does the CDM play in the 2015 deal? What will it look like post 2015?

PS: I think the existence of the CDM will give countries a higher level of comfort to take on more ambitious commitments to reduce emissions. Beyond 2015, I see the CDM continuing to evolve and improve and continuing to be an important tool in the toolbox.

UNEP has indicated a gap of at least 8 Gt between projected 2020 emissions and a 2 degree pathway. CDM could scale up to cover a significant part of that, even if some of the present host countries may choose other instruments to target parts of their economies.

The mechanism could also have an important role to play in informing the development of complementary mechanisms, such as the new market mechanism being pursued by countries under the UNFCCC. Post-2015 I see an expanded role under the CDM for programmes of activities and standardized emissions baselines, as well as further efficiency features.

RTCC: Given the global nature of the CDM and the importance of nations to take responsibility (as suggested in the PD report), what can you really achieve as chair?

PS: You make a good point. Countries have to step up and address climate change, with urgency. It’s the Board’s responsibility to continue to implement and improve the CDM, so it continues to be a useful tool, now and in the future when countries do rise sufficiently to the challenge of climate change.

As Chair I’ll keep the Board’s attention focused on its important work, and I’ll take every opportunity to remind countries what an important, valuable tool they’ve built in the CDM.

The post EU uncertainty likely to affect global carbon markets appeared first on Climate Home News.

The East African Development Bank (EADB) in Kampala, Uganda will act as a local hub to aid participation in the Clean Development Mechanism (CDM), the UN’s flagship programme for carbon offsetting projects in the developing world.

It is the second such agreement to be signed in a matter of months following a similar deal with in collaboration with the Banque Ouest Africaine de Développement (BOAD) in Lomé, Togo.

“The two regional collaboration centres in Lomé and Kampala are designed to help Africa increase its attractiveness and potential for CDM,” said UNFCCC Executive Secretary, Christiana Figueres.

Solar heaters have proved to be a successful CDM target in Africa (Nic Bothma/CDM Photo Contest)

“Our goal is to build capacity, reduce the risk for investors in such projects and help make the continent an increasingly attractive destination for CDM projects.”

The CDM allows industrialised nations to offset their emissions by funding projects to cut carbon in the developing world, where greater gains can be made at a lower cost.

Despite its weaknesses, the mechanism has offset one billion tonnes of carbon through more than 6000 projects, from installing solar water heating to funding industrial scale biogas schemes.

China and India have benefitted the most from the scheme with two thirds of all projects coming from those two countries.

While it is natural that CDM investment will occur where the greatest emission reduction opportunities are, Africa has under-performed with just 3.7% of 2012’s offsets from the CDM coming from African projects.

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New markets are opening around the world, but their future requires strong policy signals from governments, which in turn can be a catalyst for investor certainty.

What could world leaders offer at the forthcoming World Economic Forum in Davos to rescue this vital but ailing part of the global climate framework?

By Joan MacNaughton

As world leaders meet in Davos, they should make time to consider what they can do to rescue the collapsing global carbon market and one of its most useful tools – the Clean Development Mechanism (CDM) of the Kyoto Protocol.

The need for huge investment – $10 trillion to 2030 in the energy sector alone, according to the UN – to tackle climate change shouldn’t need to be spelled out.

Nor should the fact that the private sector will have to provide the bulk of such funds, and will have the major role in developing and delivering projects which will result in reduced greenhouse gas emissions. And surely it is unnecessary to reiterate why all of this is urgent.

In Copenhagen, Cancun and Durban, world leaders took far-reaching decisions on the need to limit GHG emissions, and supported a broad agenda of transition towards low carbon and resource efficient economies.

In Doha, they inched further towards the actions needed but have yet to commit to targets commensurate with the scale of emissions reductions required to avoid potentially unmanageable consequences.

As a result, the carbon price which is intended to incentivise private sector flows is languishing. It has collapsed from €12/tCO2e in 2010 to less than €0.40/tCO2e currently. At these levels few existing projects can survive and few if any new projects will be financeable. And inevitably, the market is losing capacity as firms and expertise depart for other more attractive investment opportunities.

Without early and vigorous action, this important mitigation tool risks being squandered, and with it will go some valuable co-benefits such as sustainable development, North-South technology transfer and broadening access to energy. The CDM Policy Dialogue Report says that the CDM alone has mobilised some $215 billion in investment while delivering 1 billion tonnes of emissions reduction.

The cement industry a high emitting sector often subject to carbon trading schemes but the incentive to be efficient is eroded by low prices. (Source: Flickr/abarndweller)

What can be done?

Along with a programme of reforms to tackle the acknowledged shortcomings of the CDM mechanism (covering both operations and governance) the UN High Level Panel on the CDM Policy Dialogue urged governments to scale up their ambitions and set out some actions which could be taken meantime to tackle the imbalance of supply and demand.

Among these was the case for a fund to purchase CERs (emission reduction credits issued to projects under the mechanism).

I urge global leaders at Davos to voice support for such action. They should back calls for a fund or facility to help underpin the carbon market and within it the CDM. Such a facility could invest in CDM projects and programmes, with a view both to maintaining capacity and to continuing the provision of low cost mitigation, and could operate by purchasing and cancelling CERs.

Another possibility would be for the facility to purchase CERs on behalf of contributors who could in the future exercise the option to use them towards compliance with their own targets or commitments.

Who should pay?

Potentially, contributors to such a facility could include governments for whom domestic mitigation action might be more costly than investment through the global market, or sectors where the technology is not yet fully available to enable them to take effective large scale mitigation action – such as the aviation industry.

Why not allow concerned individuals to make contributions, perhaps with the incentive of a partial tax relief (perhaps one falling due in the future, such as inheritance tax) – thus spreading the financial hit on stretched government balance sheets?

Political and business leaders will meet in Davos in Switzerland to discuss economic growth, global health and environmental sustainability. (Source: Flickr/World Economic Forum)

Perhaps some existing or planned environmental finance facilities or international development assistance could be redirected into the facility, the rationale being that the gearing here would be extremely attractive – for a partial contribution to the cost of raising the carbon price would restore confidence sufficiently for private sector flows to restart – boosted also by the implication that carbon markets, and the validity of CERs, are here to stay.

And bear in mind too that the CDM itself is geared; one estimate suggests that each dollar of international carbon finance managed to leverage $10 of investment in climate mitigation in the last three years.

The detailed design of such a facility needs much further thought and work. But it needs to happen, and within the next year or so, if we are to retain the one mechanism which has mobilised significant private sector funds in the cause of identifying mitigation opportunities and taking advantage of them.

Without such action, the credibility and capacity built up around market mechanisms over the last several years will be lost – and will not easily be regained. That would be a huge blow to efforts to tackle climate change – and to the work under way to reform the CDM.

Joan Macnaughton is Vice Chair of the UN High Level Panel on the CDM and Executive Chair, World Energy Council Trilemma

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Carbon markets need nations to make ambitious emission reduction pledges in order for to be an adequate to tool to tackle climate change, a former chair of the UN’s own financial mechanism has told RTCC.

Martin Hession, now a vice-chair of the Clean Development Mechanism (CDM), said it could be powerful tool in the long term. This will depend on negotiators meeting for the UN’s climate change talks, fixing ambitious emissions reduction targets in the future to build demand for carbon credits.

“I think people are forgetting the main issue, which is what are the targets going to be in the future and what instruments are going to deliver on those targets,” said Hession.

The CDM’s 5000 projects range in scale from cutting gas flaring at refinaries to solar water heaters.

Climate negotiators are currently meeting in Doha to discuss the future of the Kyoto Protocol and a longer term deal to cut emissions that would be applicable to all countries.

“People are can buy or not buy what they want, and there is an enormous amount of argument on the supply side,” Hession told RTCC, in a nod to the long-running debate in the EU over Poland’s surplus of carbon credits.

The CDM allows countries with emissions reduction commitments under the Kyoto Protocol to offset their greenhouse gas output by paying for projects in the developing world, where deeper cuts can be achieved for less money.

A lack of demand, as a result of flagging industrial output in countries bound by the Kyoto Protocol and low carbon reduction targets, has sent the price of carbon plummeting in recent years.

Rather than focusing on the left over credits of countries like Poland, or taking the route that the EU is following in its own carbon trading platform of withholding supply, Hession believes creating demand is key.

“The CDM is in a difficult situation at the moment, but with the CDM like anything else we need to look forward not back. The problem is that there is no demand so the biggest challenge is to address how we can get that,” said Hession.

He also said that the CDM is much-maligned and does not always get the credit it deserves.

“It mixes three things, climate change, markets and international cooperation. Some people just hate those three things. ‘Climate change I don’t want to know, markets are evil and international cooperation is bureaucratic nonsense.’ All of which are wrong,” said Hession.

“People say international cooperation doesn’t work, it’s a complicated one but I’d say the CDM proves it can work. It’s delivered on 5000 projects and one billion tonnes of carbon reductions in 5 years. You can’t argue with that.”

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An increasing number of countries and regions around the world are actively developing and implementing emissions trading schemes as a strategy to cut greenhouse gas (GHG) emissions.

From California to Japan, carbon markets in various guises are popping up to incentivise leaner emissions from big business, industry and electricity producers.

RTCC has pulled all these schemes together, be they established or under development, onto one handy infographic to highlight the extent of efforts to cut carbon around the world.

CLICK TO EXPAND

The post The world’s carbon trading schemes mapped appeared first on Climate Home News.

An increasing number of countries and regions around the world are actively developing and implementing emissions trading schemes as a leading strategy to place a price on greenhouse gas (GHG) emissions.

A fragmented system could open the door to “hot air”, a disparaging term for emissions allowances with little environmental integrity, being created on a large scale. In the European Union (EU), for instance, an emissions trading system, the EU ETS, has become the central instrument for cutting emissions in industry and the power sector.

In the Asia-Pacific region, several schemes are in place (Australia, New Zealand, Tokyo) or under development (China, South Korea). In addition Japan is developing a bilateral offset mechanism intended to complement the Clean Development Mechanism (CDM) in a future climate agreement while California is implementing an emissions trading scheme with its own non-UNFCCC based offset framework.

CLICK TO EXPAND

Due to difficulties encountered in achieving consensus on emissions mitigation through the UN climate negotiations since the COP15 meeting in Copenhagen in 2009, momentum appears to have shifted from the international level to that of nation states and regions.

Some of these “bottom-up” initiatives may be developed outside the UNFCCC framework leading to the possibility of a fragmented international carbon market.

In this context, the Durban Climate Conference in December 2011 agreed on the creation of a new market-based mechanism (NMM) and to consider the establishment of an overall framework for various mitigation approaches, including opportunities for using markets.

The Framework can therefore provide the “glue” that connects and recognises future national and regional mechanisms under the UNFCCC. If Parties were to agree on minimal criteria that would guarantee a sufficient level of environmental integrity, carbon credits from different systems could be traded across borders.

Apart from enabling future market links and ensuring environmental integrity of units the framework may assist developed countries in achieving their emission targets.

UNFCCC: Enforcer or observer?

Little consensus, however, has yet been reached with respect to the governance and the roles of the Framework. On one hand there is a group of developed country Parties, including Japan, New Zealand and the US, that favours a predominantly “bottom-up” approach with no or little UNFCCC oversight of the mechanisms developed by countries.

In these countries’ view the UNFCCC should merely have a facilitative role. On the other hand, the EU and developing countries are in favour of a more centralised framework with common rules.

In addition, some developing countries argue that market mechanisms should only be available for developed countries that have adopted internationally legally binding emission targets. Given these political differences, it is doubtful that a bold decision will be taken on market mechanisms, be it at the level of the NMM or the Framework, at the next COP meeting in Doha. It is difficult to foresee how the negotiations on the framework will play out.

The fundamentally diverging views of Parties will be hard to bridge. Japan, New Zealand and the US are rhetorically committed to high standards and propose that the integrity of mechanisms could be an item of the newly established “International Assessment and Review” process.

However, if there is a proliferation of bilateral mechanisms, substantial resources would be needed to review them. In practice, in the absence of UNFCCC oversight, the task of scrutinising other countries’ bilateral mechanisms would fall mostly on the EU as most developing countries would probably have no capacity to spare for this purpose. Most UNFCCC Parties would therefore have to blindly believe the claims that bilateral mechanisms adhere to high standards.

Creating a strong central capacity at UNFCCC level according to the rule-setter and reviewer models (see below) is therefore the only option that is able to comfortably assure the vast majority of UNFCCC Parties that environmental integrity is in fact ensured and to prevent the creation of “hot air”. This does, however, not exclude that some reasonable balance may be struck between centralisation and flexibility.

How could a global patchwork of carbon markets function?

Several design options for the framework are on the table that range from decentralised to centralised: a “Library of Parties’ Approach”, a “Reviewer of mechanisms”, a “Provider of best Practice Guidance”, a “Rule Setter” and a “Centralised Approval Process”. Some of the models could be, and others need to be, implemented in combination with others.

Based on the claim for transparency, the Library model allows scrutiny and puts pressure on Parties to use reasonable standards when establishing a mechanism. But in the absence of an international review that ensures that the information disclosed is analysed in a systematic way, it is uncertain whether Parties will be able to play an efficient supervisory role.

The Review model addresses some of these problems, as it entails carrying out an international review. In the absence of a sanctioning power of the international community, it may however remain a blunt tool rather than a sharp stick.

The Best Practices model may provide a good middle way to develop standards step-by-step, based on the sharing of the knowledge of a large array of stakeholders. Its effectiveness in ensuring a sound environmental outcome will, however, hinge on how the standard setting process is framed and whether best practices are broadly followed by Parties.

The Rule-Setter model finally, combined with a Centralised Approval process, may offer major advantages, providing an effective check against the temptation for Parties to inflate artificially the number of credits generated, a uniform standard setting procedure and a common set of rules, which may, in the case of a violation, be sanctioned.

While these characteristics provide valuable safeguards for maintaining a level playing field, centralised governance by itself does not guarantee the environmental integrity of the credits generated. As the experience with the CDM has shown, a robust institutional design, sufficient resources and the possibility to impose effective sanctions for clear violations by Parties will be vital to ensure a satisfactory outcome.

This article is a summary of the following publication: Joelle de Sepibus , Wolfgang Sterk and Andreas Tuerk, Top-Down, Bottom-Up or In-Between: How Can a UNFCC Framework for Market-Based Approaches Ensure Environmental Integrity and Market Coherence? NCCR Trade Regulation Working Paper No. 2012/31.

The post How the UN climate talks can glue together a global carbon market appeared first on Climate Home News.

The role of big business in multiplying government climate finance pledges cannot be underplayed with the queues of people lining-up to stress that the Green Climate Fund cannot meet its goal of raising $100bn a year by 2020 without it.

As well as providing the cash to fund projects to cut carbon and reduce the impacts of climate change, the private sector can also lend expertise and develop projects at the scale required.

Many of the issues on the table at the UNFCCC, carbon trading, REDD+, the Green Climate Fund, technology transfer to name a few need the buy-in of big business to succeed.

In the UK, the private sector is pushing harder than the government on many domestic green issues.

Financial institutions, big investors, business groups and banks have lined-up ahead of Doha to make their final pleas to government’s before the talks continue.

Coca-Cola are among a host of global brands, major investors and financial institutions calling for sustained action in Doha. (Flickr/Newtown Graffiti)

Nick Robins, Head of Climate Change Centre, HSBC told RTCC that while there are clear priorities for the private sector, this next round of talks could be a case of no news is good news.

“The hope is that the Doha COP will be relatively low-key and workmanlike after the breakthrough that we saw in Durban,” said Robins while acknowledging that there are still objectives to be ticked off the list in Doha.

“The most important thing in Doha is to keep the options open for future agreements. It’s important to push on with the second commitment period of the Kyoto Protocol, even though we acknowledge that that will be largely symbolic.

“It’s important to keep the architecture of the world carbon market alive,” said Robins.

It is expected that many of the elements of the Kyoto Protocol will be transferred into the new global deal, which must be agreed by 2015 and enforced by 2020.

“We need to have clarity on climate finance post-2013 when the fast start finance concludes This is a tough time for government spending but some form of commitments will be needed post-2013.

“Third, we need to see the layout of a plan for the talks up to 2015 to give confidence to governments and people like institutional investors that there is a credible pathway to delivering an international agreement by 2015.”

What business wants in Doha

Dave Pearson, Global Sustainability lead at Deloitte:

“At Rio+20 we saw the emergence of business (as opposed to governments and NGOs) as the driver of change. Business has a key role to play in helping governments feel comfortable in debating these key issues, out in the open and in giving governments the confidence to set new legislation in place.

“At COP18 real progress will need to be made to extend the Kyoto Protocol beyond its original expiration date of 31 December 2012. This extension is essential if progress is to be made and business will eventually feel the effects of any such extension as countries and regions enact new carbon regulations in response. In the meantime, carbon regulations will continue to emerge and evolve at the national and sub-national levels.

“However, there are also other discussions at COP18 that will likely create more immediate risks and opportunities for business.

“In the area of climate finance, the Green Climate Fund will move closer to launch, with ambitions to harness much of the US$100 billion per year that developed countries pledged at COP15.

“Finally, COP18 should start a serious conversation in the business world about climate-induced losses and damage, after the UNFCCC’s Subsidiary Body on Implementation (SBI) presents its research and findings on the topic.”

Business played a key role at the Sustainable Development talks in Rio earlier this year and also featured high on the agenda too. (Flickr/Avaaz)

Chris Davis, director of investor programs at Ceres and the Investor Network on Climate Risk:

“Strong carbon-reducing government policies are an urgent imperative. Hurricane Sandy, which caused more than $50 billion in economic losses, is typical of what we can expect if no action is taken and warming trends continue.

“Investors are rightly concerned about the short and long-term economic risks of climate change and understand that ambitious climate and clean energy policies are urgently needed to avoid catastrophic impacts.”

Norine Kennedy, vice president for environment and energy with the United States Council for International Business whose members include Coca-Cola, Apple, Exxon Mobil and Unilever:

“Following the US presidential elections and in the wake of Hurricane Sandy, the possibilities for significant progress at the upcoming UN negotiations may have gotten some momentum. For business, we hope that this momentum will lead governments meeting in Doha to focus on pragmatic, inclusive and cost-effective action, with the active engagement of the private sector.

“COP18 offers an opportunity to learn from the sub-optimal Kyoto Protocol. USCIB will encourage governments in Qatar to lay the foundations for a comprehensive, long-term post-2020 agreement that draws on business expertise and investment to address climate change risks and advance energy security and sustainable development.”

Stephanie Pfeifer, executive director of the Institutional Investors Group on Climate Change, which includes BNP Paribas, Aviva Investment and Scottish Widows.

“Serious climate change will only be averted if governments and private investors work together. With severe weather events increasing in frequency and intensity, economic losses as a result of these events are increasing in turn. These losses impact upon the investments and retirement savings of billions of people.

“Well-designed, stable policy which stimulates clean energy investment is essential to put economies on a low-carbon path and avert the serious economic impacts of climate change.”

The Cambridge Programme for Sustainability Leadership (CPSL) open letter, signed by more than 100 companies including BP, British Airways and EDF Energy:

“Putting a clear, transparent and unambiguous price on carbon emissions must be a core policy objective. Although there are a number of mechanisms that can be used to do this, as businesses we would focus on working through the market, utilizing approaches such as emissions trading which offer both environmental integrity and flexibility for business.

“A price on carbon will reveal the lowest cost pathway to existing emissions reduction goals and can open the door to increased ambition. Such increased ambition is vital if we are to ‘prevent dangerous anthropogenic interference with the climate system’. With the right approach a carbon price will also help engage consumers and incentivise behaviour change.

“We therefore urge policy-makers to focus on introducing a clear carbon price framework in a stable and timely manner. This means making carbon pricing a central part of national policy responses, working towards the long term objective of a carbon price throughout the global economy, and setting sufficient ambition through internationally agreed targets to drive change at a pace commensurate with the 2°C goal.”

Marc Duckeck, Sustainable Asset Management, SAM:

“The UN’s initiatives to discuss climate change are very important and the Doha Climate Change Conference shows that there is still a lot of work to be done. Unfortunately, tensions and disagreements between countries often prevents any actionable plan to be devised.

“So we as an asset manager prefer to focus on national (or international as European) policies, and on solutions to climate change that have economical sense on a standalone basis.”

The post What does business want from the UN climate change talks? appeared first on Climate Home News.

The 5000th project is a 74,000 MWh wind farm in the Dominican Republic (Source: Paolo Dala/Creative Commons)

The Los Cocos Wind Farm in the Dominican Republic has become the UN-backed Clean Development Mechanism’s (CDM) 5000^th project.

The wind farm is expected to generate 74,200 MWh of electricity and displace 54,183 tonnes of CO2 previously generated by fossil fuel power plants.

The CDM allows countries with emissions reduction commitments under the Kyoto Protocol to offset their greenhouse gas emissions by paying for projects in the developing world – creating both climate mitigation and sustainable development benefits.

Good news has been in short supply for the CDM in recent weeks.

The global carbon market has been swamped with Certified Emission Reduction (CER) credits generated by the CDM and Joint Implementation (JI) Mechanism, reducing their effectiveness and placing pressure on countries to raise their national carbon reduction targets as a consequence.

This, combined with a glut of Assigned Amount Units (AAUs) generated by the first commitment period of the Kyoto Protocol has sent the global price for carbon spiralling, leading to the chair of a high level panel assigned to monitor the CDM to say it had “essentially collapsed” and label the global carbon market “profoundly weak”.

The latest milestone was reached just over a week before countries meet at the COP18 climate summit in Qatar to discuss the future of the Kyoto Protocol, under which the CDM exists.

RTCC VIDEO: UNFCCC executive secretary Christiana Figueres says she is confident COP18 talks in Doha will be a success

UN climate chief Christiana Figueres 14/11 from Responding to Climate Change on Vimeo.

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The UN’s Clean Development Mechanism (CDM) is too “bureaucratic” and a “nightmare” to go through, according to a company involved in the scheme. 

Sarah Collins, founder of Natural Balance told RTCC that the complexity of the application was a “nightmare of momentous proportions.” This week the UN employed contractors to clear a backlog of applications.

Natural Balance started the process of registering their Wonderbag biodegradable cooker with the CDM in 2008, but to date have been unable to sell any carbon credits through the scheme.

“It has been a nightmare. I think it was my ignorance and my naivety that I didn’t really understand it and just thought ‘oh it can be done’….It is a very complex process, the CDM bureaucratic system,” Collins said.

Four years is at the higher end of the waiting period. On average CDM projects take a year to go through the registration process.

The CDM allows countries with emissions reduction commitments under the Kyoto Protocol to offset their greenhouse gas output by paying for projects in the developing world, where deeper cuts can be achieved for less money.

But many companies have raised concerns that the system is slow, complicated and often expensive to be involved in.

A recent report from the Federation of Indian Chambers of Commerce and Industry, which surveyed businesses from across a range of sectors, found only one third of those projects approved at national level in India have to date been registered at the international level, under the UNFCCC.

It blamed this on a system it said was ‘clerically orientated’ with too much focus on perfect documentation. It also found the transaction costs of the CDM too high, making it unaffordable for smaller companies.

In September this year, a report from the High Level Panel of the CDM also called for a restructuring of the scheme to strengthen its governance and to make it more accountable and efficient.

The panel’s chair Joan MacNaughton said it had “essentially collapsed”, and talking to RTCC called on governments to demonstrate their commitment to its future.

The report also called on the scheme to give more countries access to its benefits and called on nations to increase their mitigation ambition.

The Wonderbag aims to cut carbon, reduce air pollution in the homes and save low income households money (Source: Wonderbag.com)

Clean cooking

The Wonderbag is a biodegradable bag made from recycled polyurethane. Food is transferred into the bag after boiling where it continues to cook for up to five hours without the need for extra heat.

It cuts the amount of time food has to be kept on open fires or paraffin stoves, reducing water and fuel use.

Natural Balance has already distributed over 700,000 of the stoves across South Africa and aims to have 100 million distributed across the African continent by 2015.

To ensure the bag can be sold at a price low income households can afford, the Natural Balance team looked for ways to subsidise it and in 2008 Collins began the process of accreditation and validation for a Programme of Activity (POAs) under the CDM.

POAs allow for a group of small projects to be registered under the umbrella of one – opening up the CDM process to activities which may be too small alone to be of commercial value.

Four years later and Natural Balance has still been unable to issue credits in South Africa, and has now turned its attention to Rwanda – where they have recently launched the Wonderbag – with the hope they will get more success there.

Voluntary markets

The price of carbon credits issued under the UN trading platform have plummeted in recent months, calling the future of the scheme into question. Earlier this year the price of carbon credits dropped to €7 a tonne, way below what analysts say is needed to drive behavioural change amongst companies.

Voluntary markets in the USA are one ray of light: “We aim to sell our voluntary carbon in a few weeks time. That we have sold to Microsoft, at $12 (€10) a tonne” explained Collins. “The reason we have sold to Microsoft is not really because of the carbon. There is the carbon aspect to that because they announced carbon neutrality in May.

“More importantly what they are looking at is community development…the Wonderbag has had a massive impact on the bottom line of the consumer, we are putting more money in the back pocket of the consumer every month.”

Uncertain investments

The future of the CDM depends on whether a second commitment period of the Kyoto Protocol goes ahead. This will be decided at the COP18 climate summit in Doha later this month.

Meanwhile, the UNFCCC is working hard to ensure the mechanism gets back up to speed after a difficult few months – but for Collins, the jury is still out.

“I think they are moving,” she said. “I am certainly engaged at length with the UNFCCC with my experiences and advising and assisting and they are certainly looking for collaboration and input so I support the CDM.

“I think it has played a very significant role in monetising carbon and getting big shifts to happen in the world. I think it has been successful in what it set out to do. If you ask me whether it will be successful for adaptation projects; I have my reservations.”

Related Articles:

UN’s carbon markets must stay open to all after Kyoto extension – CDM policy chair

The story of the Clean Development Mechanism in numbers

Clean Development Mechanism has now offset emission of one billion tonnes of CO2

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– The day’s top climate change stories as chosen by RTCC
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– Updated from 0830-1700 BST (GMT+1)

Wednesday 31 October

Last updated: 1500

Thailand: The prospect of conflict over water resources will create the need for “hydro-diplomacy”, a conference in Bangkok has heard. A combination of climate change, population growth and urbanisation are squeezing the world’s freshwater supplies.

“Nothing will be more effective for reaching a consensus on transboundary water management agreements than for…states to sit together and exercise hydro-diplomacy,” said Khaled M. AbuZeid, director of technical programmes at the Arab Water Council. (AlertNet)

Scotland: The Scottish First Minister has announced an increase in Scotland’s 2015 renewable energy target to 50%. A 2020 target to generate the equivalent of 100% of the country’s electricity demand from renewable sources had already been set. Scotland has become a hub for established and emerging technologies including offshore wind and wave and tidal generators. (BBC)

Worldwide: False optimism could be masking the extent of the dangers of climate change with Western Europe and low-lying Pacific Island Nations facing severe consequences sooner than expected. Hugh Montgomery, director of the UCL Institute for Human Health and Performance says food shortages could mean some people in the UK starving within 20 years. Meanwhile climate scientist Michael Mann says the extent of sea level rise is being down-played and some Pacific islands could be evacuated with a decade. (Guardian)

US: Hurricane Sandy could force climate change on to the agenda of the next US President with more comparable events likely in the future. The storm set to empty the coffers of the Government’s flood insurance programme. The cost of the storm is estimated at $5-10bn of insured damage and an additional $10-20bn of knock-on economic losses. “The sort of storm we just saw is likely to be more common in some of the most populated and valuable areas of the country,” said Sharlene Leurig, senior manager for insurance and water programs with the sustainable investment advocacy group Ceres. (Reuters)

Canada: Carbon trading plans for several Canadian provinces will be jeopardised unless they link in with the EU carbon market an analyst has warned. Australia has already announced its plans to integrate with the European platform in 2018. Andrei Marcu from the Centre for European Policy Studies told a conference in Bangkok both systems could flounder without the tie-in. He also said South Korea’s carbon market would benefit from linking with the EU set-up. (Bloomberg)

UAE: A property developer in the UAE has had its energy efficiency programme approved for registration with the UN’s Clean Development Mechanism (CDM). Majid Al Futtaim Properties, the company behind Dubai’s indoor ski slope, will be able to sell carbon credits earned from the emission reductions across its property portfolio. The CDM allows countries with commitments to reduce emissions under the Kyoto Protocol to fund offsets in the developing world. Typical projects include clean cook stoves and solar water heaters as well as increasing the efficiency of industrial infrastructure in emerging economies. (Zawya)

UK: The UK’s recently appointed Energy Minister John Hayes has called for more attention to the aesthetics of the environment when making decisions on wind farm planning. Writing in the Guardian, Hayes said the UK needed an energy mix that included “new nuclear, gas, new carbon capture and storage technology, and renewable energy of the right kind”. Meanwhile, former Environment Minister Michael Heseltine, has called for a mammoth and controversial tidal power project to go ahead. The Severn Barrage would have a greater capacity than two new nuclear power stations but would also flood a large area of wetlands. (Guardian/Wales Online)

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By Adela Putinelu

Climate change has been described as the greatest collective action problem the world has ever faced (Barrett 2008: 257). In the search for regulatory solutions which would mitigate the effects of global warming, emissions trading has become the most favoured policy instrument.

If we are to envisage a more sustainable future and a transition away from today’s fossil-fuelled economies, it is imperative that we seek to understand the EU emissions market in terms of its aims, and propose ways to overcome its current failures.

So how does the EU ETS work? The central point of the Kyoto Protocol was to establish a global market in GHG emissions by means of three flexible mechanisms:

1. Emissions allowance trading between registered polluters
2. The clean development mechanism enabling offset trading in the form of emissions credits between Annex 1[1] countries and developing countries
3. Joint implementation allowing high-polluting Annex 1 countries to invest in mitigation projects in transition economies, such as Eastern Europe.

Taken together, these were intended to deliver effectiveness (real GHG emissions decrease), efficiency (low-cost solutions for individual polluters) and equity (cash and technology transfer from the industrialised world to the rest).

The EU ETS is currently the largest market in emissions trading. States propose levels of permitted pollution and the European Commission negotiates around these levels before allocating permits. Since the EU is registered under the Kyoto Protocol as a single ‘country’, there is a ‘bubble agreement’ whereby allowances  vary to reflect different national circumstances in industrial output, with some countries receiving a surplus of allowances and others a deficit.

Tightening the cap of permitted levels of GHG emissions renders pollution more costly, with the intention of pushing industry to a transition away from fossil fuels and towards investment into cleaner technologies. To ensure ‘least cost compliance’, directive 2004/101/EC creates the conditions for member states to use credits generated by emissions reduction projects within the ETS market.

The pilot, phase I, ran from 2004–2007, followed by phase II in 2008–2012 (coinciding with the Kyoto commitment period). The ETS draws its model from the apparently successful US cap-and-trade scheme for sulphur dioxide in the 1990s (Castree 2009).

The EU ETS covers electricity generation and the main energy-intensive industries

One of the most contentious points in the ETS model was the initial allocation of allowances set in directive 2003/87/EC. This stated that 95% of allowances in phase I and 90% in phase II would be given for free to industrial polluters. Although various governments initially advocated ‘benchmarking’ as the principle of allocation, ultimately ‘grandfathering’ was favoured in the majority of the national allocation plans.

Grandfathering is a method of allocation based on installations’ historical emissions shares according to their sector, whereas in benchmarking some index of historical activity or capacity is multiplied by a uniform emissions-rate standard to determine allocations to individual installations (Ellerman and Buchner 2007: 78). However, debate rages over each method of allocation and its subsequent effects on the market’s economic efficiency.

For example, it is thought that grandfathering favours big industrial polluters, undermining the ‘polluters pay’ rule whilst failing to encourage investment in clean technologies through adequate incentives. This could, in turn, undermine the efficiency and overall effectiveness of the trading scheme as it may not ensure GHG reduction according to the least-cost principle (Chernyavs’ka 2008: 15).

The free allocation of allowances for industrial polluters has been described as the largest instance of the creation and regressive distribution of property rights in history (Gilbertson and Reyes 2009: 10). As the opportunity cost of allowances is incorporated into power prices in countries with liberalised energy markets, the largely free allocation of allowances means that power generators receive a windfall profit since their compliance costs are far less than their revenues generated from increased consumer prices.

When the overall loose cap, which in most cases exceeds overall emissions, is taken into account, the scheme primarily translates into profit-making opportunities for industrial polluters. While most allowances are used for covering existing emissions, the cost of buying extra pollution permits is being passed to consumers, effectively bypassing any incentive for systemic change (Lohman 2006: 90).

For example, the Czech energy giant CEZ, which received a third of the country’s permits, was able to sell its allowances in 2005 when the price was high and buy them back when the market collapsed – investing the profit in coal production while energy prices for consumers increased. In the UK, the ‘big six’ electricity generators receive around $1.2 billion each year in windfall profits from the ETS.

he industry is able to pass the marginal costs onto consumers, giving a massive boost to the industry’s profitability (Lohman 2006: 91). Moreover, according to the European Environment Agency,[2] there was an increase of 2.8 per cent in CO₂ emissions in the EU 27 in 2010 from energy production-related fossil fuel combustion.

Learning curve or regulatory deadlock?

So far there has been a wide gap between environmental rhetoric and reality in the EU ETS. Stemming from the divorce between economic theory and complex reality, the current regulatory framework and the market design of the EU ETS have faced serious shortcomings (Spash 2010). Some argue that carbon markets like the EU ETS, which were advertised as a means for incentivising and providing finance for a transition to a fossil fuel free future by the derivatives traders and neoclassical economists who created them, have had exactly the opposite effect (Lohman 2009: 1073).

In their decade of existence, these markets have offered new means for the heaviest polluters in fossil-based industries to delay structural change while also providing supplementary finance for these industries. As investment is used interchangeably as a short-term, money-making venture and as a foundation for a secure future, the ‘savings’ of the carbon trading market are achieved by putting off technological change and long-term investment in a  future without fossil fuels.

Thus, by encouraging ingenuity in inventing measurable equivalences between different types of emissions and various types of offsets rather than by fostering innovation to reduce dependence on fossil fuels, the overall effectiveness of this type of market-based environmental policy is questionable (Lohman 2006).

Framework failure

The 2012 Carbon Trade Watch report indicates that although the currently low market value of carbon has led the general public to believe that the EU ETS is not working, it is not the market as such that has failed but rather the policy framework. We must go back to the initial aims of the policy to assess this claim. Who has profited most? Did the regulatory framework succeed in circumventing what the market was initially created for, that is, achieving emissions reduction in the most cost-effective way?

While the ‘free market environmentalism’ theory – which holds that carbon trading is efficient in internalising the costs of environmental externalities (Castree 2009: 199) – has some validity when judged against the success of the US cap-and-trade of sulphur dioxide, there is an enormous gap between environmental theory and practice in the EU (Castree 2009: 203).

Whether the problems associated with the EU ETS are inevitable features of institutional learning or are due to drivers outside of policymakers’ control (such as oil prices), it might be the case that these are all inherent problems in the business-friendly approach of most EU states. The text of directive 2003/87/EC is easily interpreted as a compromise between the urgency to meet targets set out in the Kyoto Protocol and the interests of the different member states – and thus the big capital interests behind them.

Ultimately, the intricacies and range of interpretations outlined above resulted because of  the failure of the Kyoto Protocol to stipulate a degree of uniformity in rules of allocation, caps to be set for each member state and the methodology for constructing national allocation plans (Chernyavs’ka 2008: 17).

In an effort to reconcile the regional logic of emissions trading with its regulatory logic, complex struggles and negotiations between EU policymakers, member states and industry have taken place (Bailey and Maresh 2009: 7). The market mechanism per se is not the problem but rather the regulatory deadlock in which the market seems to be trapped thanks to European policymakers’ unwillingness to put pressure on the big fossil-fuelled industries for the sake of a more coherent and effective scheme which would diminish corporate influence over the design of the carbon market.

Favouring fossil fuels?

The form of carbon capitalism which has emerged has been driven by the interests of the big industrial polluters. As such, the EU ETS has bowed to corporate self-interest from the very beginning. Some would argue that even the most conservative estimates of the windfall profits enjoyed by intensive fossil-fuelled industries at the launch of the carbon market raise a question mark over the political accountability of the EU ETS (Sijm et al 2008: 123).

Structural deficiencies have been perpetuated in phase II, with the issue of windfall profits remaining unaddressed in the European Commission’s directive, the overall cap set only marginally lower and grandfathering remaining the practice although policymakers are well aware of its associated drawbacks after the disastrous effects of the phase I pilot (Castree 2009: 204).

Both market environmentalists and climate justice movements are calling for systemic change. The latter, comprising organisations such as Climate Justice Action, Climate Justice Now! and Third World Network, campaign for equitable environmental policy but are increasingly criticised over their apparent misinterpretation of cap-and-trade schemes and faulty economic analysis (Hahnel 2012: 142).

Market environmentalists on the other hand suggest that only a ‘learning by doing’ approach will deliver much-needed GHG reduction – both in terms of economic efficiency and equity. They reiterate the need for improved cap-and-trade schemes, whereas climate justice movements are warier of emissions trading and call for a rapid transition away from fossil fuels.

Advocates of current ETS models regard GHG control as a ‘pro-growth strategy’ offering positive financial returns for investors. One such example is to be found in the Stern Review (2006), which emphasises the great opportunities for banks and the financial sector in funding pollution reduction. But if we consider pollution control as defensive expenditure we could argue that this adds nothing to human welfare and should not be a sign of societal progress. The transaction costs inherent in these markets should not be interpreted as a source of economic growth but rather a loss to society (Spash 2010: 16).

Does it work?

Intense corporate lobbying against governments’ favoured idea of a carbon tax and the desire of the EU to fill a power vacuum after the US withdrew from the Kyoto Protocol in 2001 saw the EU making a U-turn and adopting a cap-and-trade policy. Subsequently, the EU enjoyed a leading role in climate change negotiations while its proposed emissions trading scheme increasingly attracted attention as a model for a global cap-and-trade system.

But concerns about the practical implementation and effectiveness of the current scheme, the failure of the US (the world’s largest per capita emitter of GHG) to establish a national cap-and-trade programme and the fundamental ethical critique of the legitimacy of carbon commodification indicate that the future of emissions trading is far from certain (Perdan and Azapagic 2011: 6052-6053).

With little incentive for investing in clean technologies, a timely transition away from fossil fuels seems unlikely. With the market-based policy tool of emissions trading preferred on grounds of economic efficiency (although this is subject to debate), environmental policy will not address the challenge of behavioural change while the goal remains to seek new investment and financial opportunities (packed in green discourse and delivered to the public in the form of pro-growth strategies).

Structural deficiencies in the EU ETS cannot be understood as part of an institutional learning process so long as the EU policymakers remain unwilling to learn from its failures.

This article was first published in the Institute of Public Policy Research (IPPR) journal Metis. It aims to provide students with the opportunity to engage with the policy process and gives them a unique platform to express opinions, critiques and solutions.

About the author:
Adela Putinelu is an MA student in International Development: Politics and Governance at the University of Manchester

References

Bailey I and Maresh S (2009) ‘Scales and Networks of Neoliberal Climate Governance: The Regulatory and Territorial Logics of European Union Emissions Trading’, Transactions of the Institute of British Geographers, 34(4): 445–461

Barrett S (2008) ‘Climate Treaties and the Imperative of Enforcement’, Oxford Review of Economic Policy, 24(2): 211–238

Carbon Trade Watch (2012) ‘Paying the Polluters: EU Emissions Trading and the New Corporate Electricity Subsidies’.  http://www.carbontradewatch.org/publications/paying-the-polluters-eu-emissions-trading-and-the-new-corporate-electricity-subsidies.html

Castree N (2009) ‘Crisis, Continuity and Change: Neoliberalism, The Left and The Future of Capitalism’, Antipode, 41: 185-213

Chernyavs’ka L, ‘The European Emissions Trading Scheme: Overview, Lessons and Perspectives’, in Gulli F (2008), Markets for Carbon and Power Pricing in Europe, Edward Elgar Publishing

Ellerman AD and Buchner BK (2007) ‘The European Union Emissions Trading Scheme: Origins, Allocation, and Early Results’, Review of Environmental Economics and Policy, 1(1): 66–87

Gilbertson T and Reyes O (2009) ‘Carbon Trading: How It Works and Why It Fails’, Critical Currents No.7

Hahnel R (2012) ‘Left Clouds Over Climate Change Policy’, Review of Radical Political Economics, 44(2): 141–159

Lohman L (2006) ‘Carbon Trading- A Critical Conversation on Climate Change, Privatisation and Power’, Development Dialogue No. 48

Lohman L (2009) ‘Climate as Investment’, Development and Change 40(6): 1063–1083

Perdan S and Azapagic A (2011), ‘Carbon Trading: Current Schemes and Future Developments’, Energy Policy 39: 6040-6054

Sijm J, Hers S and Wetzelaer B, ‘Options To Address Concerns Regarding EU-ETS induced increases in power prices and generator’s profits: The Case of Carbon Cost Pass Through in Germany and The Netherlands’ in Gulli F (2008), Markets for Carbon and Power Pricing in Europe, Edward Elgar Publishing

Spash CL (2010) ‘The Brave New World of Carbon Trading’, New Political Economy 15(2)

Stern N (2006) Stern Review on the Economics of Climate Change, London: Government Economic Service. www.sternreview.org.uk

The post Are carbon markets an effective way to address climate change? appeared first on Climate Home News.

The UN’s carbon cutting mechanism should be opened up to any countries that want to take part, the co-chair of a panel established to review its progress.

The Clean Development Mechanism (CDM) allows countries with emissions reduction commitments under the Kyoto Protocol to offset their greenhouse gas output by paying for projects in the developing world, where deeper cuts can be achieved for less money.

With the price of carbon credits issued under the UN trading platform plummeting, the future of the scheme has been called into question and efforts are under way to find solutions to reinvigorate it.

“I would like to see as many countries involved as possible,” said Joan MacNaughton, co-chair of the independent high-level panel on the CDM policy dialogue, established to review the mechanism’s progress. “Not least because the scale of finance required is enormous and governments cannot do it alone.”

CDM projects can take a range of formats from supplying efficient cookstoves to using biomass power station's waste products for fertiliser, like the pictured initiative in Brazil. (Source: Julio Alberto Pavese)

MacNaughton was one of those  recently quoted as saying that the CDM was close to collapse, due largely to the oversupply of carbon credits that have forced down the price of a ton of CO2 or equivalent emissions (CO2e), and with it, the incentive to lower CO2e output.

“Ultimately this is not about saving the CDM, this is about the fact were running out of time to tackle climate change. We have a method that has been shown to work and that is getting better all the time and if we don’t look after it will fail and it will take a long time to make up the ground just to get back to where we are now.”

MacNaughton suggests that governments should help in the short-term by purchasing the excess credits and retiring them in what would amount to a bailout. The cost of this she says is “not a great deal of money compared to the sums being bandied around in relation to the banks”.

Higher emission reduction pledges from governments would also increase demand but increasing the scope of the CDM would offer longer-term stimulus, without relying on increased ambition at the UN climate talks.

“Making the CDM available to counties that don’t have mitigation targets, the developing countries and emerging economies, that would be good as it might inject some extra demand [into the carbon market],” MacNaughton told RTCC.

Related articles:

The story of the Clean Development Mechanism in numbers

Will the billions needed for climate change finance be found in Doha?

RTCC Q&A: Clean Development Mechanism

Discussions at the recent Bangkok UN climate talks on the Kyoto Protocol’s second commitment period, set to start from 2013 onwards, looked at excluding non-participants from using the CDM, with Russia in the cross hairs of some critics.

Least Developed Countries chairman Pa Ousman Jarju told RTCC in Bangkok that that developed states (Annex I) who chose not to be part of the Kyoto Protocol would pay a price. “They can forget about them (CDM credits),” he said. “If you don’t want the Mango tree you should not go in for the fruits.”

But MacNaughton says it’s vital that the markets do not contract in 2013. “Be it Russia be it any other country, I’d like to see as many countries involved with market mechanisms as possible,” she said.

“If you look at what the CDM has achieved as well having a huge impact on the investment available, it has managed to get $215bn into developing countries, it has helped developed countries save a lot of money in their mitigation efforts and contributed to sustainable development.”

As well as opening the door to new donor countries, MacNaughton believes the criteria for recipients could also be reviewed.

Around 75% of all CDM projects are in just four countries, Brazil, China, India and Mexico, according to research by the UNEP Risø Centre in Denmark.

At present the size of emissions that can be removed in the host country is a key factor. However with very low emissions in many of the world’s poorest nations, projects there can be overlooked.

MacNaughton says when you factor in the emissions of those countries when they are further down the development path, the case for inclusion becomes compelling.

“There is an argument that CDM projects would be justified because they enable you to build clean infrastructure now and avoid people taking the cheapest path, which could be much higher emitting,” said MacNaughton.

Missing link

There are numerous national and regional carbon trading schemes operating or planned around the world from in Tokyo, the EU, Mexico and elsewhere.

Many of these existing schemes face their own difficulties. The EU has said it will auction credits for its next trading phase in a few weeks but it will do so in the shadow of very low carbon prices. Australia issued its first free credits today as it gears up for its own much anticipated carbon trading.

The CDM is the common link between them all however, and an updated and improved system could serve as the backbone of a platform to support the global emissions deal due to start in 2020.

With the UN Doha climate negotiations two months away, the future of the CDM could become much clearer. In particular, indications of the likelihood of higher mitigation pledges could emerge.

“We just have to hope people can get their act together and agree to more ambitious targets and realise that taking a very narrow view about what is in the negotiating interests of an individual country is the wrong stance to take,” said MacNaughton.

“The right stance is how can we all move this forward as quickly as we can.”

Video: Andrew Scott, Research Fellow at the Overseas Development Institute talks to RTCC about low carbon technology transfer and repacking the CDM to benefit the poorest

The post UN’s carbon markets must stay open to all after Kyoto extension – CDM policy chair appeared first on Climate Home News.

It is a mechanism by which developed countries can offset their own emissions by investing in CO2 reduction schemes in developing countries.

In September 2012 the CDM celebrated its one billionth tonne of offset carbon – but this coincided with a fairly gloomy prognosis of its future – with the head of a high level panel saying it had “essentially collapsed“.

We have compiled our own analysis of the challenges the CDM and the Kyoto Protocol face – you can read this here.

If you’re interested in what has been accomplished, have a look at the short video below – the story of the CDM in numbers.

The post The story of the Clean Development Mechanism in numbers appeared first on Climate Home News.

After a turbulent two weeks for the Kyoto Protocol and carbon trading schemes in general, the future of the UN’s flagship policy remains in the balance.

Plans for a second period (KP2) of legally binding reductions in greenhouse gas emissions are advanced but serious questions surrounding its likely effectiveness and environmental integrity have now emerged.

There is a realistic hope that Australia, New Zealand and Ukraine will make binding pledges along with the European Union, although Russia denied it would take part last Friday, branding the system “useless”.

The Protocol remains toxic for the US and Japan’s switch away from nuclear power to fossil fuels makes it more unlikely to sign up than ever. Major emerging economies like India and China are exempt.

An essential part of Kyoto is the Clean Development Mechanism (CDM), which allows wealthy nations that have signed up for binding pledges (Annex I countries in UN jargon), to invest in low carbon projects in the developing world, is said to be on its knees.

Its one billionth tonne of offset carbon just over a week ago coincided with a fairly pessimistic appraisal of its future. It has “essentially collapsed”, in the words of Joan MacNaughton, a former top UK civil servant and vice chair of an advisory panel.

And it’s the current state of the CDM that concerns even the Protocol’s most ardent fans.

CDM “needs a bailout”

CDM projects range from cutting emissions from factories to distributing clean solar cookers like this one in North West China. (Source: UNFCCC)

Globally, carbon markets are suffering from an oversupply problem. This makes the financial incentive to cut carbon low and has left many countries with an abundance of carbon credits.

Now, as governments discuss how to make KP2 an effective tool for reducing emissions, there are concerns that both the chronic oversupply and insufficient demand will render the whole agreement pointless.

“The future for the CDM is bleak,” says Tomas Wyns, director at the NGO CCAP Europe. “The High Level Panel of the CDM has suggested emergency measures that you could compare to the bailout of the financial sector.”

The idea of the CDM is that the market incentivises countries to hit their targets and by investing in poorer nations, emission reductions projects deliver even more bang for their buck.

However, the recession reduced CO2 output meaning Annex I parties got closer or exceeded their targets without the CDM or any other carbon trading platforms, reducing the demand for credits drastically. Many countries now have huge surpluses of credits and so no incentive to reduce their emissions.

“Some are calling for public money to flow into the CDM to keep it alive. Those are interesting ideas but the money needed to keep it going just by buying up credits runs into tens of billions of dollars,” Wyns told RTCC.

“The future is quite uncertain. The private sector will be needed too but my perception is that it will be linked to public money.”

Carbon trading generally assigns a number of emissions allowances. Each credit represents a tonne of CO2. Any excess credits can be traded.

A report by CDM Watch and Reuters Point Carbon has estimated that by the end of KP2, which will be either 2017 or 2020, the surplus of carbon credits, Assigned Amount Units (AAUs) will reach 17.2 bn tonnes of CO2. To put that into perspective, that’s more than the EU emits in five years.

Governments are debating what to do about the surplus at the UN climate change talks. Those carrying them (Russia, Ukraine and Poland have the most) are reluctant to let them go. As long as they remain in circulation however, carbon markets will continue to suffer.

Sinking the surplus

The Bangkok talks made good progress on the Kyoto Protocol's extension with the G77 proposal on cutting the carbon credit surplus gathering momentum. (Source: Flickr/UNFCCC)

At the most recent meeting in Bangkok, the G77+China group of developing countries submitted a set of ideas for discussion in Doha, that would phase out the surplus credits.

They want the surpluses to be removed from carbon markets and instead held in reserve. This could boost the long suffering carbon price by sorting the over supply problem, even if there was also the possibility that countries struggling with targets could dip into their “savings”.

The proposal also suggests that after KP2, when a new global pact on emissions cuts replaces it, the surpluses would be ditched.

Finally, it suggests that countries whose emission targets are higher than actual 2012 levels would see the difference in their unambitious goal sliced off their reserves of credits.

“This reduces the resultant KP2 surplus and effectively increases the ambition levels,” says Wyns. “The proposal is really interesting because it is carried by the G77 group, which is very influential.

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Analysis: Was enough achieved at UN climate talks in Bangkok?

“There were previously three proposals from the Alliance of Small Island States (AOSIS), Africa Group and Brazil but now they have all come together. That puts some pressure on the likes of Russia and the EU to agree on this in the Doha talks at the end of the year.”

The announcement by Russia that it has no intention of taking part in KP2 could have some positive side effects.

As the largest holder of surplus AAUs and with plenty of diplomatic clout, it is one of the main obstacles to an agreement on what to do with them.

“At the UNFCCC it is mainly the EU position that has been missing for an overall solution to be found,” says Ulriikka Aarnio, senior policy advisor, Climate Action Network Europe.

“Now that Russia has confirmed that they will not be joining the KP2 I hope this also makes it easier to agree strict limits on the carry-over and use of surplus credits,” she adds.

Wyns believes it is now possible that Russia’s non-inclusion in KP2 could see its surplus declared void and its access to the Kyoto carbon cutting mechanisms reduced.

Something better than nothing?

As negotiators enter the final months of preparation before the Doha climate talks in November, any doubts on the establishment of a second commitment period have eased.

But KP2 in any form is not good enough. The EU is on track to meet its emission reduction targets but is unwilling to make deeper cuts without signs that other nations, through Kyoto or otherwise, will also make a bold gesture.

The scale of surplus credits available could effectively render KP2 completely impotent if not dealt with.

A global deal on the climate, scheduled to be agreed by 2015 and in force by 2020, hinges on rich countries putting a second commitment of Kyoto in place.

A lame duck KP2 would set the bar dangerously low as developing nations prepare to negotiate their own reductions.

Low ambition jeopardises carbon markets, lowers the bar for emerging economies, derails the good work that a rejuvenated CDM could do and makes the goal of limiting warming to 2°C even more unlikely.

The post Kyoto Protocol: How is the UN’s flagship climate project faring ahead of COP18? appeared first on Climate Home News.

Around the world 1.4 billion people do not have access to electricity and 2.7 billion still live without clean, safe cooking fuels.

It’s an issue at the heart of the climate debate. How can developing nations gain access to energy whilst keeping emissions under control?

The UN Secretary General Ban Ki-moon’s Sustainable Energy For All initiative aims to tackle this head on, by doubling the share of renewable power in the global energy mix.

It appears a Herculean task.

But speaking at the 2012 Low Carbon Energy for Development Network (LCEDN) meeting in Brighton, Andrew Scott, Research Fellow at the Overseas Development Institute (ODI) told RTCC that the technologies and the expertise exist to make this a reality.

What’s needed are solid energy and climate finance guarantees – a key goal for the COP18 UNFCCC talks in Doha later this year.

The post VIDEO: Are Ban Ki Moon’s ‘energy for all’ goals possible to achieve? appeared first on Climate Home News.

Australia’s government is close to signing up to a second commitment period of the Kyoto Protocol (KP2), according to a leading negotiator at the UN climate talks in Bangkok.

Australia, Japan and New Zealand have so far declined to take on a second round of emission targets under the 1997 treaty after the existing ones expire at the end of this year.

Speaking at the end of the penultimate day’s talks, the chairman of the Least Developed Countries (LDC) Group Pa Ousman Jarju told RTCC he was confident Julia Gillard’s administration would sign up to the extension.

“Australia are still considering the option of a second commitment period, the European Union are still talking to them,” he said.

“Australia need to come on board and we want them to be a part of this as soon as possible.”

EU negotiator Artur Runge-Metzger told RTCC today that both Australia and New Zealand had work to do back in their respective capitals to determine whether they took part in KP2.

Australia’s official opposition have already said they would consider backing a second commitment period of the Protocol. Two weeks ago the government recently announced it would join the EU’s emissions trading scheme in 2015.

Julia Gillard was Deputy Prime Minister when Australia ratified Kyoto in 2007

Ousman Jarju said talks over the future of the Protocol this afternoon had been “positive” and that there were signs of “movement”, but revealed the LDC bloc were increasingly unhappy over the lack of ambition from developed countries.

“We cannot use the economic crisis as an excuse for not acting on climate change,” he said.

The LDC chair also warned states that were planning not to be part of KP2 that they would be denied access to CDM carbon credits, which make it cheaper for them to meet their domestic goals.

The Clean Development Mechanism (CDM) allows states to meet their own emission targets by investing in cheaper carbon reduction schemes in the developing world. Approximately 995 million have been issued.

What’s the CDM? Check the RTCC climate change A-Z

Japan and Russia have both lobbied to have access to the CDM despite choosing not to sign up to an extension, with Japan threatening to lower its voluntary pledge to cut emissions to 25% below 1990 levels by 2020 unless it receives its allocation of credits.

But Ousman Jarju said that developed states (Annex I) who chose not to be part of the Kyoto Protocol would pay a price.

“They can forget about them (CDM credits),” he said. “If you don’t want the Mango tree you should not go in for the fruits.

“They will not benefit from the flexible mechanisms of the Protocol.”

He said a priority is to ensure the deal is “legally binding” and that the market is not flooded with “hot air”, referring to the huge surplus of assigned amount units (AAUs).

Many countries have huge stockpiles of AAUs, which are emission allowances awarded to individual states based on their projected consumption, calculated by reference to their base year emissions and their quantified emission limitation and reduction commitments.

Some estimate the global surplus of AAUs could be as much as 13 billion.

Despite working closely with the EU over an extension to the Kyoto Protocol, the LDCs have expressed their disappointment over the bloc’s lack of ambition when it comes to adopting higher emission targets.

Over the weekend an EU official was quoted as saying that hopes the Union would increase its reduction targets from 20% to 25% were “wishful thinking”, but Ousman Jarju hopes member states will reconsider before COP18.

“For the EU it is (currently) impossible to raise their ambition, we hope that at the next (ministerial) meeting this will change”, he said.

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The post Bangkok 2012 – LDC chief confident Australia will sign up to Kyoto Protocol extension appeared first on Climate Home News.

The first meeting of a new fund for climate action has been overshadowed by fears that the private sector, rather than impacted communities, will drive the decision making process.

A report by Friends of the Earth US, GAIA and the Institute for Policy Studies has raised concerns that companies and donor governments will take over the process of distributing money from the Green Climate Fund (GCF).

The fund was approved at the 2010 Cancun COP16 climate talks. The aim of the mechanism is to channel $100 billion a year towards the world’s poorest nations in an attempt to help them cope with the effects of climate change.

Progress on developing the GCF’s powers was blocked during the Bonn climate talks in May – with developing and developed countries blaming each other for the impasse.

Following a delay with the Green Climate Fund's progress in Bonn earlier in the year, its first meeting takes place this week in Geneva. (Source: Flickr/UNFCCC)

“We have seen this play out before, and it’s not a pretty picture: time and again, public money that is supposed to help the world’s poor has been diverted into the pockets of polluting, multinational corporations and Wall Street,” the report’s authors said in a statement.

They are concerned that the developing communities that would benefit from projects backed by the GCF are being excluded from discussions.

As the board of the GCF meets for the first time in Geneva, NGOs are also unhappy with their observer status at the meeting.

Brandon Wu, Senior Policy Analyst at ActionAid points out that part of the reason the GCF was developed was to tackle community engagement and transparency issues with existing climate financing channels.

“To do that we need to ensure that as many civil society organisations, observers and communities need to participate in the process,” he told RTCC.

The “no objection clause” in the GCF’s rule could be problematic. It says that observers must be recognised by the Chair, which is standard, but it adds, as long as no board member objects, that could be problematic,” adds Wu.

The meetings will not be webcast further impinging on the transparency of the GCF.

GCF board members and representatives from select NGOs met informally on the eve of the fund’s first formal proceedings to discuss the grievances.

The absence of transparency has added fuel to their claims that the GCF will not be accountable for the money it allocates opening it up for exploitation by the private sector.

Related stories:

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Crowdfunding: A new source of finance for sustainability and renewable energy

Will the billions needed for climate change finance be found in Doha?

The post Green Climate Fund board meets for first time amid controversy over transparency appeared first on Climate Home News.

– The day’s top climate change stories as chosen by RTCC
– Tweet @RTCCnewswire and use #RTCCLive hashtag
– Send your thoughts to jp@rtcc.org
– Updated from 0900 BST (GMT+1) Last updated 1630

Latest news

The EU has announced €500m investment in its environment fund. It will provide just over half of the new money itself for a range of projects including forest fire prevention, public awareness, greenhouse gas mitigation and nature conservation.

An academic that worked on a paper showing that Scandinavia has warmed in the past 2000 years until 1900, has said he expected it to be used as proof climate change does not exist. “The sceptics will look at these things and say there is no climate change but it is just one study out of many. I still think over last 40 years it has been warmer generally than in medieval times,” said Robert Wilson of St Andrews University. The paper was widely misrepresented in mainstream media as proving climate change does not exist.

Native American groups have expressed anger at a US Senate hearing on a perceived lack of action and leadership on climate change. “[The ocean is] dying. And who the hell is in charge? Nobody that I see,” said one representative. Many villages in Arctic and sub-Arctic regions are suffering extreme coastal erosion.

Indian scientists are attempting to build a computer model to second-guess the monsoon and track the movements of the seasonal rains. The country receives 75% of all its rainfall between June and September.

The US Agriculture Secretary has defended the Armed forces continued use of biofuels saying the industry could be worth 1 million to the country’s economy. The US Navy just conducted a major biofuels test in the Pacific.

The UN has reiterated its support for the carbon markets amid falling prices saying that it’s Clean Development Mechanism remains strong. The CDM allows developed nations’ investment in climate change projects overseas to be rewarded with carbon credits. “I don’t see the current low prices as affecting the longevity of the CDM,” said a UN official.

The Maldives is looking to cooperate with the UAE on renewable energy development. The nation of low lying states recently opened its first embassy in the Emirates and is making clean energy ties a priority.

Top tweets

Justified or not, recent extreme weather seems to be boosting public belief of global climate change. (Science): news.sciencemag.org/scienceinsider…

— Steven Ashley (@steveashleyplus) July 19, 2012

“In the US, more people believe that houses can be haunted by the dead than that the living can cause climate change.” 〜 @globalwarmingne

— Christian Dimmer　PhD (@Remmid) July 20, 2012

Reading list

Bill McKibben of 350 fame has written a very powerful piece for Rolling Stone using the power of maths…

How do we make ‘green’ sexy? Our very own Tierney Smith looks to answer this question posed by UN climate change chief Christiana Figueres during Rio+20.

Photo of the week preview

Here’s an extreme close-up of our Photo of the Week, can you guess what it is yet?

Big question

Could solar power become cheaper than wind? The cost of solar panels have plummeted in recent years, thanks largely to an increase in production in China. So does it have a chance of becoming the most cost-effective form of renewable energy?

The post Climate Live: US biofuel industry worth one million jobs; EU announces €500m environment investment and UN backs carbon trading despite price collapse appeared first on Climate Home News.

By 2020 there should be (a bare minimum) of $100bn of climate finance flowing into projects to slash emissions in developing countries and to protect the most vulnerable nations from the effects of climate change.

That means renewable power projects on land and sea, mega-city scale energy efficiency roll-outs, biblical flood prevention systems, intelligent agriculture, solar powered desalination, restoring degraded lands and protecting biodiversity; our natural toolkit.

For the first three days of this week, 140 diplomats, business leaders and civil society representatives met in Bonn to take the next necessary steps towards achieving this idealistic vision of widespread, practical action.

The next tangible progress will come at the next round of the UN climate change negotiations in Doha in November.

The next UN climate change talks in Doha will settle many outstanding issues regarding climate finance. (Source: Flickr/Larry Johnson)

So what clues did the Bonn workshop provide about what might be achieved in Doha?

Let’s deal with the last question first.

The simple answer is that the no single source of finance, public or private, can deliver the speed and scale of change required to restrict warming to 2°C and stop climate impacts taking the wind out the sails of development in the world’s poorest nations.

The second less obvious reason is that the delicate process of agreeing cuts to greenhouse gas emissions (GHGs) for all nations (the Durban Platform), hinges on developing nations having the confidence that sufficient support for their efforts in this regard will be in place. Without it they simply won’t sign any legally binding agreement to cut emissions.

All eyes are now turned to Doha where more work will be done to kick-start the Green Climate Fund (GCF), the mechanism that, once finished, will process the billions of dollars needed.

Doha

“We want to see $10-15 billion pledged to the GCF in Doha to see it through 2013-2015,” says Steve Herz, senior attorney with the Sierra Club and a co-chair of the Climate Action Network’s (CAN) finance group. Herz suggests a 50:50 split between money allocated for mitigating and adapting to climate change. This might not be so straightforward.

“The developed countries are talking a lot about leveraging the private sector. Partly because they say it will have greater impact, but also because once you talk about leveraging the private sector you can reduce the commitment from public money,” says Herz.

Increasing the proportion of private sector money could have a direct effect on the mitigation/adaptation split.

“The private sector will be more interested in investing in emerging markets and middle income countries than in the least developed countries. On the mitigation side that’s not such a problem because that’s where the GHG emissions are [in the emerging markets]. The bigger problem is on the adaptation side, where the poorest countries are in the worst position to respond to climate impacts.”

Getting the private sector involved at a larger scale is a challenge in itself.

Erik Jan Stork, Senior Sustainability Specialist at APG Asset Management who is also on the steering committee of the Institutional Investors Group on Climate Change (IIGCC) says things are improving in the renewable energy sector but plenty of work remains.

“While technology risk is improving rapidly there is still significant policy risk to investing in renewable energy projects so investors require guarantee mechanisms to reach the levels of private investment required to meet long term climate goals.”

APG looks after more than $300bn of assets and is already making serious sustainable investments.

At the workshop Stork reiterated the importance of a strong and sustained price on carbon in order for finance to flow to the Clean Development Mechanism (CDM), the system for industrialised countries to establish projects overseas to offset emissions at home. A low carbon price means lower returns and less incentive for businesses to take part.

Money talks

Money may talk, but it appears that not enough talking goes on between different parties involved in climate financing.

Anecdotes of miscommunication, idling donations and a lack of attribution were abundant in Bonn. Solving this problem will be a key issue in Doha. Tracking, verifying and monitoring the movement and utilisation of funds is a complex issue. Finding a trusted, independent and universal way to do this, that is also simple and paperwork-light, is no easy task.

The UNFCCC could well have already begun preparing to provide such a role. It’s portal for fast start finance, the funding system for 2010-2012, tracks the donations pledged and those received.

Better communication could stop money filling between the cracks, speed up implementation and remove opportunities for corruption.

Are new sources of cash dead in the water at Doha?

Support for a Robin Hood Tax is widespread, whether it can be part of the UNFCCC process however, is doubtful. (Source: Flickr/RobinHoodTax)

The campaign to end fossil fuel subsidies has near unanimous support from civil society but turning these subsidies off like a tap could have negative consequences for some, as was pointed out in Bonn.

However, Herz points out that when they were first discussed by the G20 in Pittsburgh in 2009, this was well understood and targeting the rich was part of the theory.

“If you were mindless about it there could be some negative social consequences but the way fossil fuel subsidies work generally, is that they benefit the rich most. They use the most fossil fuels, so the idea would be that subsidies would be narrowly tailored to benefit the poor,” says Herz pointing out that ending subsidies on Kerosene, which millions of people still rely on for lighting and cooking, would be unwise.

The financial transaction tax (FTT) or the Robin Hood tax as it commonly referred to, would see a small percentage tax placed on financial trades. Nine of the EU’s 27 members have agreed to apply one. Getting 195 parties to sign-up to one is “impossible” as one delegate said during the work shop.

Herz thinks there could be a way to get all parties to agree.

“There are credible ideas for rebates to protect developing countries from a FTT so that only developed country contributions would be left. Some developing countries are not persuaded by that politically but it’s feasible,” he says.

The added benefit of fossil fuel subsidies and charging a levy on emissions from shipping and aviation however, is that both of these would also ultimately lead to cuts in emissions. A FTT cannot claim to do the same.

Home sweet home

The proposed building in Bonn to host the Green Climate Fund. Germany, Namibia, Poland, South Korea, Mexico and Switzerland are vying to host the new institution. (Copyright: GCF Bonn)

One issue surrounding the GCF that is almost certain to be decided in Doha, is the location of the headquarters for the new organisation. Six countries including South Korea and Germany (which Herz describes as both very keen) are in the running.

However, Herz’ outside bet is Poland.

“Poland is a huge roadblock within the EU, maybe there is scope for a trade-off?”

Wherever the fund ends up, there are more complicated, and more pressing, issues to be addressed in Doha. With the fund’s overarching structure largely settled, there will be time later for the flesh to be added to the bones.

The sentiments of most can be expressed through a Twitter hashtag that was prominent during the workshop’s duration: #fillthefund.

The post Will the billions needed for climate change finance be found in Doha? appeared first on Climate Home News.

The UN climate change talks are not supposed to be about us versus them, given that everyone wants the same end result.

However true this may be, there is one inescapable divide that was prominent during today’s final session of the UNFCCC Long Term Finance workshop: the haves and the have nots.

In UN speak they are called donors and recipients, the countries paying into climate finance funds and those receiving funding.

The current system of “fast start finance” agreed in Copenhagen is in its third and final year. The $30bn injection of funding is the pre-cursor to the Green Climate Fund (GCF), the long-term set-up that will administer flows of cash in the direction that climate impacts and mitigation opportunities dictate.

Getting projects up and running should take precedence over minute diplomatic detail delegates said. (Source: Copyright Nic Bothma)

There were some awkward moments during today’s session and delegates candidly discussed the (sometimes embarrassing) logistical challenges they faced during the fast start finance era.

Colombia’s Isobel Cavalier described how her nation was unaware that it was registered to receive funding for certain projects and the effect this had on the countries that were stumping up the cash.

“Donors are unnerved and exasperated because we don’t know that we are listed for funding. Sometimes we know nothing about it. We need a systematic way of working so we all, donors and recipients, have the same information,” she said.

Jessica Brown from the US State Department warned of the consequences that this can have on budgets.

“It’s counter productive when governments don’t acknowledge our support and makes it harder for us to go back to our own governments to get more support,” she said.

“Why aren’t countries aware of the fast start finance that we’re delivering? Maybe it’s the lag between the budget and the projects’ timetables? Maybe we need to be realistic about the level of bureaucracy that this money goes through,” she said adding that a move away from the “us versus them” mentality and toward more partnerships might improve the situation.

The miscommunication is not just across international boundaries however.

Fred Onduri from the Ugandan delegation described an exchange with an Australian Minister about funding. The Minister claimed that the country had already invested in Uganda leaving Onduri slightly baffled. When he returned to Kampala and spoke with the Finance Ministry, a fast start finance contribution from Canberra had indeed been made. His own department simply hadn’t been told.

Japanese negotiator Junya Nakano acknowledged that this was a far from ideal situation for donors either, suggesting climate change projects should be part of mainstream development plans to cut the risk of allocations going AWOL between departments.

Act now, talk later

While there are still clearly plenty of elements of the process requiring further elaboration, there were warnings that perfecting the diplomatic details could get in the way of action on the ground.

“We should try to waste less time on not very helpful elaboration. Donors can be more creative and effective and try to deliver results rather than focusing too hard on workshops and awareness building and so on,” said Marina Olshanskaya, United Nations Development Programme (UNDP).

Representatives of France and the Philippines both said there needed to be more attention on defining specific legal terms such as “new and additional” (the notion that climate finance is not simply rediverted, already allocated aid). The EC and the OECD both said it would be better to concentrate on actions and leave the finer detail to later, a sentiment echoed by India’s Rajestree Ray.

“We need to start the initial capitalisation [of the GCF] now. We don’t have to wait for the details to be finished, enough has been done to start putting money into it,” said Ray.

The workshop concluded with a tourism style promo for Cape Town, which was revealed as the destination of the next workshop on Long Term Finance. If delegates are serious about cutting some of the red tape that underpins the complex financial processes, they might just find the spare time for a little tourism of their own.

The post Paying for climate change: Visible urgency on final day of UNFCCC finance talks appeared first on Climate Home News.

(Source: Isamu Mitsueda, CDM Project 1636: Alto-Tietê landfill gas capture project, Brazil)

Despite ratifying the Kyoto Protocol in Marrakesh in 2005, Malawi has yet to see the benefits of the treaty’s flagship programme, the Clean Development Mechanism (CDM)

The CDM is meant to aid developed, rich countries to lower their emissions by gaining carbon credits for investing in sustainable development projects in developing countries such as Malwai.

But the thoroughness of the process has left many poorer countries – particularly those in Africa– lacking the capacity to implement projects.

However, as more companies and governments begin to start projects, both voluntary and registered, in countries across Africa, the projects open to countries like Malawi– as well as the benefits of such projects – could be endless.

In the 17th in the series of UNFCCC CDM Radio Club reports RTCC is hosting, Charles Chikapa, a radio journalist inMalawi explores these potential benefits.

The radio club aims to spread the word about the CDM in Africa and extend the benefits of the mechanism to communities that have not yet benefited from the scheme. The CDM is an official process for carbon reductions under the UNFCCC.

The post Podcast: How can countries like Malawi benefit from the UNFCCC’s Clean Development Mechanism? appeared first on Climate Home News.

Solar-water heaters have multiple benefits for poor households in South Africa (Source: Nic Bothma, CDM Project 0079: Kuyasa low-cost urban housing energy upgrade project, Khayelitsha, South Africa)

A major challenge for developing countries is to ensure people gain access to energy without massive rises in C02 emissions.

It’s a difficult balance, and one that is not always possible to achieve.

Planners in Cosmos City – near Johannesburg – have launched a solar water heating project for 700 households.

A year on from the introduction of the project, the heaters are not only providing houses with warm water, but also reduce the households electricity bill as families no longer have to boil water for washing a cooking.

In the sixteenth in the series of UNFCCC CDM Radio Club reports RTCC is hosting, Zeenat Abdool, a radio journalist in South Africa looks at how projects like this could be registered under the CDM to earn tradable carbon credits.

The radio club aims to spread the word about the CDM in Africa and extend the benefits of the mechanism to communities that have not yet benefited from the scheme. The CDM is an official process for carbon reductions under the UNFCCC.

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The CDM project makes life a lot easier for households in this township outside of Durban (Irini Roumboglou/UNFCCC, CDM PoA 4302, SASSA Low Pressure Solar Water Heater Programme)

Clean Development Mechanism (CDM) projects can not only provide environmental benefits for Africa, but can help to restore community’s dignity too.

Particularly in regions such as South Africa, where conditions under the Apartheid left many poor, black communities without access to energy or water or using unsafe means to get it.

In one community outside Durban, a solar water heater project – the first registered project under the CDM in the country – helps households to get this dignity back.

The project was set up to help some of the most impoverished communities and offers free installation and technology.

While saving as much as 200 Rand per month (around US $24) on electricity, removing the need for paraffin and giving the families more money to spend on food and education. One of the biggest benefits for households in the township is that they can rise later in the morning and still properly wash before school or work.

In the fifteenth in the series of UNFCCC CDM Radio Club reports RTCC is hosting, Zeenat Abdool, a radio journalist from South Africa visits the community outside Durban to see how much the project had changed lives.

The radio club aims to spread the word about the CDM in Africa and extend the benefits of the mechanism to communities that have not yet benefited from the scheme. The CDM is an official process for carbon reductions under the UNFCCC.

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© Vimal Sharma, CDM Project 0347: Chambal Power Limited’s (CPL) proposed 7.5 MW biomass based power, India

CDM projects are set up with two aims; to lower emissions and to ensure sustainable development in the developing world. 

Many countries in Africa have found undertaking the CDM difficult – both financially and conceptually – but following capacity building programmes, many projects are underway on the continent

While the carbon emission reductions achieved by these projects are monitored under the UNFCCC process, the sustainable development assessments are largely undertaken by the countries themselves.

In Tanzania for example, they measure sustainable development on not only the benefits it brings to communities but also how far it goes at meeting the national agendas on environment, poverty reduction and development etc as a whole.

In the fourteenth in the series of UNFCCC CDM Radio Club reports RTCC is hosting, Ugonma Cokey, a correspondent from the Voice of Nigeria traveled to Bonn, the home of the UNFCCC to explore how the CDM is contributing to sustainable development.

Through her interviews she learns about the social, economic and developmental benefits of the CDM, its role in providing skills and jobs and also in reducing emissions.

The radio club aims to spread the word about the CDM in Africa and extend the benefits of the mechanism to communities that have not yet benefited from the scheme.

The post PODCAST: How does the CDM benefit sustainable development appeared first on Climate Home News.

How could African communities benefit from the CDM? (© Romeo Mariano, CDM Project 1258 Quezon City Controlled Disposal Facility Biogas Emission, Philippines)

Clean Development projects are aimed at bringing multiple benefits to the communities which experience them as well as wider environmental benefits.

While the heart of the CDM remains the reduction of greenhouse gas emissions and the benefits that brings, many of the projects register also bring much more localised benefits.

Investment in renewable energy projects – often in rural areas where access to electricity is not guaranteed – the transfer of technology into countries and employment and economic opportunities are just some of the benefits for countries such in Africa from the CDM.

In the thirteenth in the series of UNFCCC CDM Radio Club reports RTCC is hosting, Ugonma Cokey, a correspondent from the Voice of Nigeria, travelled to Bonn, Germany, home of the UNFCCC to find explore both the benefits and the limitations to the CDM in Africa.

The radio club aims to spread the word about the CDM in Africa and extend the benefits of the mechanism to communities that have not yet benefited from the scheme.

The post PODCAST: Benefits of the CDM for African Communities appeared first on Climate Home News.

Are you a journalist working in Africa? Do you have a great story to tell about the CDM? Then the UNFCCC wants to hear from you.

The secretariat has launched the second round of the CDM African Radio Contest to highlight the work of the mechanism across the continent.

The contest aims to highlight the benefits of the CDM to cities, communities and countries in Africa (© Irini Roumboglou/UNFCCC, CDM PoA 4302, SASSA Low Pressure Solar Water Heater Programme)

Under the theme of “Changing Lives” this second round of the contest aims to spread the word on the benefits of the CDM in Africa, which has been somewhat under-represented in the process to date.

CDM projects do not only bring environmental benefits to Africa but much needed employment opportunities (© Vimal Sharma, CDM Project 0347: Chambal Power Limited’s (CPL) proposed 7.5 MW biomass based power, India)

According to UNEP figures from April this year, some 3560 projects had been registered under the CDM in China, while the whole of Africa had only 235 registered projects.

Broadcasters and freelancers from across Africa are now being urged to grab their microphone and head out to find a story which best explains how countries, cities, communities and businesses could benefit from CDM projects in Africa.

This follows on from a first round of the competition last year, which saw projects from Uganda to South Africa to the Democratic Republic of Congo featured. RTCC has been running the first-round of the podcasts over the last few months.

The latest stories should fall under two categories:

The CDM has so far been under-represented in Africa compared to other countries such as China (© Isamu Mitsueda, CDM Project 1636: Alto-Tietê landfill gas capture project, Brazil)

1. Those relating to specific registered CDM projects.

2. Those which do not relate to a specific project, but that explore the potential for the CDM in Africa and its benefits.

The UNFCCC say stories will be judged on originality, technical excellence, the clarity of the message, investigative aspects and the broadcast’s presentation.

Winners will be invited to visit CDM project sites in Africa and learn more about the CDM process.

Applications close on the 6 August 2012.

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The UNFCCC is calling for applications under the new round of the “Momentum for Change” initiative.

They are looking for projects which showcase direct action on climate change mitigation and adaptation, delivering positive social and environmental benefits to those living in urban poor areas of the developing world.

The initiative was first launched at COP17 in Durban last December, and the shortlisted projects under the current application will be presented at the next climate change conference in Doha at the end of the year.

The Litre of Light project brings light to homes in the Philippines using recycled plastic bottles and water (© Litre of Light)

Opening the second round UNFCCC Chief Christiana Figueres said: “It is time that we recognise the extraordinary work taking place at the local, national and regional levels by those committed to tackling climate change.

“Momentum for change aims to shed a light on existing efforts to creatively and effectively respond to the climate challenge.”

The scheme also equips people in the local community with the skills to build their own lighting companies (© Litre of Light)

This echoes the sentiments expressed by Figueres back in January, following the launch of the project, when she stressed the importance of highlighting on the ground action on climate change.

In an article for RTCC she wrote: “While the terms climate change and sustainability are increasingly found in policy documents, thought pieces, articles and speeches, the time has come to move from words to action. Ultimately action is the only gateway towards real change.”

Figueres also used the article as an opportunity to highlight the work being done between public-private partnerships, something she continues to champion as we head towards the Doha talks.

“The Momentum for Change initiative provides a platform to showcase successful public-private partnerships at all levels that have led to real benefits for both people and the climate, while contributing momentum to the global sustainability revolution,” she said.

Previous projects under the scheme have included providing farmers in the Horn of Africa with micro-insurance against crop failure, the distribution of clean cook stoves, and the use of solar “bottle lights” in the Philippines.

Momentum for Change aims to highlight public-private partnerships (© Litre of Light)

To be considered under the scheme a project must:

– Address climate mitigation or adaptation.

– Already be implemented or in the course of implementation.

– Be scaleable or replicable with the potential for long term impacts.

– Be a cooperation between the public and private sectors.

– Deliver verifiable social and environmental benefits to communities who have been appropriately engaged in the development of the project.

– The project can not be registered or not have plans to register under the CDM or the Joint Implementation initiatives.

The deadline for applications is 13th July 2012.

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