March 18, 2010—As world leaders struggle to agree on a global deal to reduce greenhouse gas emissions, a small town on the rocky slopes of Ethiopia’s Great Rift Valley is winning its own war against climate change. Rejuvenation of denuded land has brought great benefits to local communities, including income from the sale of carbon credits from now-protected forests.
Gelcha Gelana has lived in Humbo, about 420 km south-east of Ethiopia’s capital Addis Ababa, for all his life and has seen the land change radically during his 67 years. "Three decades back, the mountains were covered with dense jungle and were home to many wild animal species including lions, leopards, hyenas, python, and deer," he said. "The grasses and leaves from the mountain served as feed for our cattle and the forest’s dry fallen branches provided firewood."
But since the 1960s, poverty, hunger, drought and an increasing demand for agricultural land has forced communities to overuse their natural resources. Many trees have been cut down for buildings, firewood, charcoal and furniture, with little or no regulation. The deforestation around Humbo has threatened groundwater reserves that provide 65,000 people with potable water, and has caused severe erosion. As a result, heavy rains cause lowland areas to flood and in extreme cases, mudslides kill people and livestock and damage crops, roads, bridges, and other infrastructure.
Regeneration of the Humbo Mountain with the Help of Carbon Credits
Under the Clean Development Mechanism (CDM) of the Kyoto Protocol, countries can earn carbon credits for reforestation and afforestation projects. The Humbo Project, developed by World Vision and the World Bank is the first such large-scale forestry CDM project in Africa to be registered with the United Nations Framework Convention on Climate Change (UNFCCC).
Africa hosts less than two percent of all registered CDM projects. Promotion of land-use and forestry projects in this region is key to changing the status quo. Without this, it will be difficult for a post-Kyoto climate regime to gain support from African countries. Inger Andersen, Director, Sustainable Development (Africa Region) for the World Bank
The project will enable the future sale of more than 338,000 tons worth of carbon credits by 2017, of which the BioCarbon Fund will purchase about 50 percent. This will provide an important income stream to the local communities who own the mountain and therefore also the carbon credits.
It is a success story that gives hope to other African nations.
2nd Africa Carbon Forum
The challenge of increasing the number of CDM projects in Africa was the reason for the 2nd Africa Carbon Forum, which took place in Nairobi, Kenya on March 3-5, 2010. The event was organized by the World Bank in cooperation with the United Nations and the International Emissions Trading Association (IETA).
"To date, Africa hosts less than two percent of all registered CDM projects. Promotion of land-use and forestry projects in this region is key to changing the status quo. Without this, it will be difficult for a post-Kyoto climate regime to gain support from African countries," says Ms. Inger Andersen, Director, Sustainable Development (Africa Region) for the World Bank.
The severe lack of financing was discussed at the Forum, as was lack of experience and technical skill, and the CDM rules, which are seen as unnecessarily complex for low-emitting African nations.
"In this regard, the registration of the Humbo project has a special significance. We believe that this project will encourage project developers to scale up land–use and forestry initiatives in this region, thus allowing African countries to benefit from growing carbon markets while providing local communities with additional social, economic, and environmental benefits," says Anderson.
Africa faces particular challenges because the continent’s relatively low greenhouse gas emissions have kept it from developing large numbers of CDM projects. Project developers have concentrated on other regions with "low-hanging fruit". As a result there is little discussion around greenhouse gas emission reductions and not much project experience in Africa. This lack of private sector involvement, coupled with a lack of initiative on the part of most African governments, and the reluctance by local banks to provide financing because they don’t know how to evaluate the risks of carbon projects, has hampered the development of CDM projects.
Describing the usefulness of the Africa Carbon Forum, Steve Thorne, Director of South-South North Africa, an inter-governmental organization, states, "It’s really to exchange experience on how to develop CDM projects. There is a lot of interaction between project developers, agencies, and other stakeholders - which is good."
The role of the World Bank
The World Bank played a pioneering role in the creation of the carbon market a decade ago by establishing the Bank’s Carbon Finance Unit, and setting up carbon funds that purchase carbon credits from projects in developing countries. Today, it is the Trustee of eleven Carbon Funds and Facilities that use over $2.5 billion, contributed by governments and private companies, to promote carbon mitigation projects. Over 22% of its projects are in Africa. Complementing its carbon finance activities, the World Bank also offers capacity development and technical assistance to developing countries. Carbon Finance Assist is the World Bank’s premier capacity development program implemented by the World Bank Institute.
"CF-Assist has been instrumental in developing and shaping the Africa Carbon Forum and we are glad to see that our efforts are paying off. But we still have a long way to go before carbon- and climate finance are systematically considered as an option when financing national or regional development priorities," says Kai-Uwe Schmidt, CF-Assist team leader at the World Bank Institute.
"We are all learning in this exercise: WBI is committed to bringing know-how to the table together with our partners in the Nairobi Framework, and to connecting our clients who have many lessons and knowledge to share with their peers in Africa," adds Samira Khamlichi, Environmental Specialist, who co-organized the event on behalf of the World Bank Institute.
The next Africa Carbon Forum will take place in Marrakesh, Morocco. There is hope that at least some of the challenges - identifying financing, lack of technical knowledge, and land titling and monitoring - will be solved by then, and more African CDM projects can be showcased.
View video interviews with participants and organizers at the Africa Carbon Forum.
Read "Africa Eyes Carbon Market" (World Bank News & Broadcast article, May 25, 2010).