Africa Renewal (United Nations)
Michael Fleshman
12 August 2008
One of the great challenges facing scientists and political leaders in combating global warming is a difficulty that is, well, global. At first glance, that would not seem to be a problem at all. The fact that pollution released in the US or Europe is changing, sometimes disastrously, the climate of people thousands of kilometres away in Africa or Asia should bring the world together. After all, everyone is in the same ecological boat.
The catch is that not all countries contribute to or are affected by climate change in the same way. The industrial "greenhouse" gases that contribute to climate change, including carbon dioxide, come mostly from wealthy industrialized countries or rapidly growing economies, such as those in China and India. Poor developing countries without much industry, as in Africa, contribute little to the problem - but are hurt by it nonetheless. As Rajendra Pachauri, head of the UN Intergovernmental Panel on Climate Change, notes, the poor "are certainly going to be the worst sufferers," since they and their societies lack the money and technology to adapt.
Responsibility for climate change was an issue in the negotiations for the 1997 Kyoto Protocol, which requires polluters to cut their greenhouse gas emissions. Poor countries argued that they should not be penalized for problems caused by the rich. They called for negotiators to find ways to encourage wealthy countries to assist the poor with modern "green" technology and to help them cope with the effects of climate change. They also urged a balance between trying to reduce emissions and encouraging economic development, so as to lift billions of people in the developing South out of poverty.
Clean Development Mechanism
The solution to this looming North-South divide was found in the notion of "common but differentiated responsibility." Under that concept, all countries accept the obligation to combat global warming, but they do so within their means. At Kyoto, most developed countries agreed to cut their emissions to 5 per cent below 1990 levels, while at the same time exempting developing countries from mandatory reductions. They also agreed to an innovative financing measure called the Clean Development Mechanism (CDM). Its purpose is to reduce the cost of cutting emissions in the North while helping developing countries finance their own clean energy projects.
The CDM is a private-sector initiative that allows businesses in developed countries to meet part of their domestic emissions targets by financing emissions-reducing projects in developing countries, where costs are often lower. A European company required by its government to reduce greenhouse gas discharges by 100,000 tonnes per year, for example, might find it cheaper to upgrade a polluting coal-burning power plant in India than to modernize its factory at home. The CDM allows that company to count the pollution averted in India against its 100,000-tonne target.
Irrigation canal in Eritrea: The CDM's current rules do not favour financing projects to help Africa adapt to climate change, such as irrigation schemes.
Such CDM-approved projects are assigned one "carbon emission reduction" credit (CER) for every tonne of greenhouse gas they save. CERs in turn can be sold on one of several international carbon exchanges - for instance, to a steel company in Germany, a cement factory in Sweden or a power plant in the UK, to help those countries meet their emissions-reduction requirements.
Cleaner power in Uganda
The possibilities of the CDM are great on a continent where population growth, climate change and lack of investment have contributed to chronic shortages of energy. For the residents of Uganda's rural West Nile region, generating energy for cooking, lighting and commerce was an expensive, dirty and sometimes frustrating experience until recently. Most households used kerosene or wood for day-to-day needs, while local businesses and the better off bought their own generators and diesel fuel for electricity, as the area was too remote and thinly settled to warrant connection to the national power grid. Kerosene and diesel had to be trucked in from distant depots over poor roads, adding to the cost and making supplies erratic.
The solution was to install a small hydroelectric plant on the nearby Nyagak River. But that too presented problems. Local authorities lacked the engineering, management and financial skills to design and implement the project. And its small size - it served just 4,000 homes - made it unattractive to private investors in the absence of outside funding.
Yet because the project would prevent the release of about 36,000 tonnes of greenhouse gases per year, compared with existing energy sources, it qualified for inclusion in the CDM. With technical help from the Ugandan government and financial assistance from Finland and the Netherlands, the project received final approval by the CDM in 2005. The resulting CERs generated annually are sold on world carbon markets to help defray construction and operating costs - contributing to clean and sustainable development in Uganda and cheaper compliance with the Kyoto Protocol for buyers in the North.
For Africa and other poor regions struggling to cope with climate change, such financing is vital. Scientists argue that global warming is damaging Earth's climate faster than expected, and a severe shortfall in funds is hampering African efforts to cope.
Unfortunately, the success of the West Nile CDM project is the exception rather than the rule in Africa. According to researchers for the UN Framework Convention on Climate Change (UNFCCC), which oversees the CDM, Africa accounts for only about 3 per cent of the more than 1,000 CDM-approved projects globally - and half those are in South Africa, where sophisticated industrial and financial infrastructure lends itself to the complex CDM approval process. The rest of sub-Saharan Africa accounts for just a handful of CDM projects.
Poor business climate
Africa's difficulties in attracting CDM projects are similar to those that have hampered the continent's efforts to land purely commercial investments. Those include a lack of infrastructure and skilled labour, high poverty rates, limited financial resources, a shortage of the management and technical skills needed to meet CDM standards, weak institutions, corruption and political instability. Together, such shortcomings have saddled the region with a reputation as a difficult place to do business.
Many African governments and environmentalists also note that the CDM's rules favour pollution-reducing projects rather than those that could help Africa cope with climate changes, such as irrigation schemes, soil conservation and flood-control programmes. Such projects were instead to be met by the Kyoto Protocol's Adaptation Fund, financed in part by a 2 per cent levy on CDM credits.
The slow pace of approvals is another problem. The World Bank noted in a 2008 report that while CDM regulators have signed off on some 1,000 projects since the mechanism was launched in 2005, an additional 2,000 projects are still under evaluation, creating delays and discouraging investors.
CDM officials told Africa Renewal that efforts are underway to streamline application procedures and speed up the approval process. But they also said that the time-consuming vetting proposals undergo is necessary if the CDM is to be a credible tool for greenhouse gas reductions.
Although CDM credits are not the only kind traded on world carbon markets, they are coveted for their quality and fetch higher prices. Before qualifying for CDM credits, projects must demonstrate that they are compatible with sustainable development plans by the host country, that they will produce verifiable emissions reductions and that they would not be built without the added financing of emissions credits, a requirement known as "additionality." Only after such conditions are met are credits issued, a process that can take up to two years.
According to the World Bank, in 2007 the CDM generated some $13 bn in emissions credit sales, part of an overall carbon market worth $64 bn - more than double the size of the market the previous year. CDM spokesman David Abbass told Africa Renewal that with world carbon markets projected to generate $100 bn by 2012, the year the Kyoto Protocol expires, it is vital that Africa attract its fair share.
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