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Monday, 19 November 2012

Carbon Credits: African LDCs, the least benefiting

Richer and larger developing countries benefit much more from the United Nations Clean Development Mechanism (CDM), to the detriment of African Least Developed Countries (LDCs). While almost 80% of CDM projects are located in India, Mexico, China and Brazil, Africa makes up just 2.9% of the total carbon credit registered by the CDM (260 out of more than 4,000 total projects). More than 100 CDM projects are in South Africa, Nigeria, Kenya, Egypt and Morocco – and none of these countries qualify for LDC status.
Fewer than 35 CDM projects are located in the 33 poorest African countries, according to the UN Environment Program, partly because poorer African countries lack the large industrial sectors that the CDM is meant to incentivize.
Many projects from the LDCs find it hard to meet the strict criteria required by the CDM, the procedure under which issues tradable carbon credits are issued.
Outlining some of the barriers to developing carbon- offset projects in these countries, Gambia's submission to the UN on behalf of the LDC group in March states that "due to limited capacity, high transaction costs, political and economic risks, and technical characteristics of LDCs, the CDM has failed to reach many of its intended beneficiaries in the LDCs,"
Moreover, time is running out for carbon credit project developers in richer African countries who want to sell credits to Europe. Last year, the European Union, currently the world's biggest buyer, ruled it would only buy carbon credits from least developed countries (LDCs) from 2013 onwards. Now, new developers are rushing to make the 31 December deadline but, because it can frequently take two years or more to complete registration, many will not make the cut-off date.
Carbon markets aim to encourage sustainable development by allowing poorer countries to offset the greenhouse gas emissions of the rich world.
As a result, several African countries will find themselves looking for a new market, as Australia, China and South Korea, notes The African Report.

 

Source: The African Report