In the village of Aharkandhi in northeastern Bangladesh, life has changed since homeowners began installing solar panels on their roofs. At night, families gather at the local grocery store to watch TV, which boosts business. Children study longer than before.
This is due in part to a World Bank-financed electrification project to promote off-grid electricity in rural communities. This year, the project became the first renewable energy program in Bangladesh to be issued carbon credits for lowering greenhouse gas emissions and the world's first Programme of Activities for solar home systems under the UNFCCC’s Clean Development Mechanism (CDM) to generate carbon credits.
With access to electricity, people are finding new ways to increase their income, and the word is spreading quickly across villages.
I knew there was something different about Carbon Expo this year as I looked up during the opening ceremony and noticed the room was packed, with standing room only for late arrivals.
That is when I first asked myself: I know why I am here, but why are you here? I felt like a veteran carbon warrior among a sea of young fresh-faced carbon players.
I started coming to Carbon Expo in 2004, and this year, for the first time, there are plenty of people I don’t recognize. So today I took some time to ask people what they were doing here and why there seems to be a growing interest in carbon markets.
Last week Barcelona brilliantly beat Manchester United to become the soccer Champions of Europe. This week Barcelona hosted delegates at Carbon Expo, the annual jamboree for carbon marketers organized by the World Bank and others. But sadly, the style, strength, efficiency and confidence shown by Messi, Villa, and Pedro are not much in evidence in global carbon markets today. More like my old fourth division club, Bexley United, which I believe has now ceased to exist.
- There’s certainly a lot to be gloomy about in the world of carbon trading over the past year:
- The overall size of the market worldwide shrank for the first time ever in 2010
- The primary CDM market (Clean Development Mechanism) – the principal window of carbon markets to the developing world – fell another 46% to $1.5 billion, down from $7.4 billion in 2005, and the lowest since trading began in 2005.
- Legislative disappointments in the USA, Australia and Japan, and the market have now become even more concentrated, with well over 90% of trades originating in Europe.
- Serious irregularities and fraud in the European Trading System (ETS), and suspicions of monkey business in some CDM HFC (Hydrofluorocarbon) transactions.
Above all, confidence in the post 2012 market, when the first Kyoto Protocol Commitment period comes to an end, is on the floor, and thus demand for post-2012 deliveries is close to zero.
These points are all documented in the Bank’s new State of Carbon Markets Report, 2011 launched this week. And yet 3,000 people turned up at the Carbon Expo this week, and seemed to doing deals and having a good time. Is there anything positive out there? Yes, actually.
First, the overall size of the market was still $142 billion, no small change, although overwhelmingly concentrated within the European Trading System.
Last week, I headed to Ibi Bateke plateau in the interiors of Democratic Republic Republic of Congo (DRC) to see the country’s first project approved and registered under the Kyoto Protocol. We set off on a long winding road taking us quickly from Kinshasa to the Ibi plateau – 150 kms away from the daily hustle of the over 9 million inhabitants of Kinshasa. Ibi is characteristically thinly forested, partly a result of the poor porous soils. Despite the vast lands, the majority of the land is uninhabited with villages dotting the landscape.
The community is replanting its degraded forests with trees like acacia, pines and eucalyptus that absorb carbon from the atmosphere, allowing the project to generate carbon credits which are purchased by the World Bank’s BioCarbon fund. This project is a trail blazer as some of the revenue from the sale of carbon credits is providing basic health care and schools, offering an integrated vision of development.
As we entered the village, we met a group of children walking home. Among them was one older kid who chaperoned the smaller ones - the youngest must have been about five. They chattered enthusiastically about their new school. The school was negotiated as one of the benefits for the participatory management of the plantation. Gautier Tschikaya a resident who was accompanying us told us that one day they were driving around on the plantation and found a whole bunch of kids squatting in an abandoned building so that they would not have to walk the 10+ km every day to get to school. At that point, they built a dormitory for those kids and we visited it - situated just below the school now.
If you closely read the 20-page draft decision on the Clean Development Mechanism prepared at COP16 in Cancun, you will see a tiny reference to the possibility of including ``city-wide programs’’.Those few words represent an enormous effort: mainly championed by Amman, Jordan, with support from the World Bank, the European Union, UN-HABITAT, C40 Cities, ICLEI, United Cities and Local Government(UCLG) and others.
There is reason to be excited. Cities are the every-day face of civilization, the rough and tumble, action oriented arm of government: The ones you call when you need to get things done. And in Cancun they got the call.
Making sense of the COP, the ‘Conference of the Parties’ (cities would call it a meeting, ‘fiesta’ if you added beer and a beach) is a full time job. Thousands of people jet across the planet arguing over commas and clauses while climate change waits for true political will. But that political will does not come from countries at a COP. No, first and foremost it needs to be understood, nurtured, and acted-upon in cities. Countries get their marching orders mainly from urban residents, not the other way round.