- The Africa Carbon Forum 2011 discussed challenges and opportunities for the carbon finance market in Africa.
- The most promising development, one that holds particular benefits for Africa, is the increase of programmatic approaches to carbon mitigation.
- WBI helps countries and other stakeholders to better understand how the CDM and PoAs and other climate finance instruments work.
July 7, 2011— Ibi is a small village on the Batéké Plateau in the Democratic Republic of Congo (DRC) – at first sight not the place that strikes one as a center for carbon finance. And yet, it is here that the DRC’s first Clean Development Mechanism (CDM) project is located - approved and registered under the Kyoto Protocol.
As part of the Ibi Batéké reforestation project, a private company founded and managed by local people from the Batéké Plateau, is reforesting over 4,200 hectares of degraded land, which will employ around 400 staff. In total, the reforestation project is expected to absorb 1.6 million tons of carbon dioxide by 2037. Thanks to the carbon revenue which comes back to the community, hundreds of children will get better education and health services.
“Ibi Batéké is a concrete example of the capacity of the private sector to help transform the national economy,” said Marie Francoise Marie-Nelly, Country Director for the World Bank in DRC and the Republic of Congo. “Given the suitable conditions, such initiatives can be scaled up, creating thousands of jobs while reducing the pressure on native ecosystems.”
At the Africa Carbon Forum 2011 held in Marrakesh, Morocco this week, more than 1,000 carbon experts, project developers, carbon buyers and sellers, government and private sector representatives from across the globe came together to learn more about projects like the one in Ibi and to explore new carbon finance opportunities in Africa.
Challenging Times for Carbon Markets
The forum is celebrating the 10 year anniversary of the Marrakesh Accords, signed in Marrakesh to establish the Kyoto Protocol. But it also comes during challenging times for carbon markets: slow progress in climate talks, lack of a clear regulatory future, stagnation of traded volumes, and the risk of a fragmentation of carbon markets. The World Bank’s State and Trends of the Carbon Market Report states a total market value of $142 billion in 2010, down from $144 billion in 2009.
While the future scope of the market is still unclear, the carbon market is in fact in the process of reinvigorating itself and that Africa holds one the greatest potentials for participation in that market.Christiana Figueres, UNFCCC Executive Secretary
Although Africa contributes very little by way of greenhouse gas emissions, most African countries are directly affected by climate change. Through climate adaptation and mitigation interventions such as the international carbon market, these effects can be reduced.
The Africa Carbon Forum is the leading regional trade fair and knowledge sharing platform for carbon investments. It has demonstrated that Africa is becoming an increasingly attractive destination for CDM projects, as investors seek new opportunities for growth.
"Programmatic CDM is clearly seen as a very attractive option by African countries and it is starting to catch on. The interest is evident here at this forum. But we need to reform and improve the processes – particularly for the least developed countries – to allow them better access the CDM," said Mary Barton-Dock, Director of the Environment Department of the World Bank
Opportunities in Africa
Currently, Africa accounts for only two percent of the 3,200 registered CDM projects worldwide. "I argue that while the future scope of the market is still unclear, the carbon market is in fact in the process of reinvigorating itself and that Africa holds one the greatest potentials for participation in that market,” confirmed Christiana Figueres, UNFCCC Executive Secretary.
The most promising development, one that holds particular benefits for Africa, is the increase of programmatic approaches to carbon mitigation. So-called ‘Program of Activities' (PoA) allow investors to group an unlimited number of similar projects over a wide geographical area under one single administrative umbrella. This means less transaction costs for the project owners and smaller projects can now be included.
The World Bank Institute, which is the World Bank’s capacity development arm, helps countries and other stakeholders to better understand how the CDM and PoAs and other climate finance instruments work – through e-learning, practitioner knowledge exchange and innovative knowledge platforms which are core elements of WBI’s capacity development approach.
"The increased appreciation of and interest in the CDM here is starting to transform access to markets. It is obvious that the capacity-building efforts are paying off and the message is getting out,” said Neeraj Prasad, Climate Change Practice Manager at the World Bank Institute which leads the organization of the event for the World Bank.
“We have spent years developing reforestation and afforestation projects, and we are finally seeing the fruits of our efforts. We need to keep the processes that work and continue to improve what is not working,” said Ellysar Baroudy, Head of the World Bank’s BioCarbon Fund, referring to a new World Bank report The BioCarbon Fund Experience - Insights from Afforestation and Reforestation CDM Projects, which was released at the Africa Carbon Forum.
According to the report, developing countries face numerous regulatory, capacity, finance and land tenure issues. Despite these barriers, CDM reforestation projects are crucial in mitigating climate change – just as the Ibi Bateke project does in DRC.
Press Release: New Bank Report: BioCarbon Fund Experience – Insights from Afforestation and Reforestation CDM Projects
Website: BioCarbon Fund