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Why so few carbon projects in Africa?

Isabel Hagbrink's picture
In Ethiopia, Humbo mountain is thriving after early regeneration efforts. Photo © World Vision

What are the obstacles to implementing carbon projects in Africa?

This was the question underlying many of the discussions at the Africa Carbon Forum, which took place in Nairobi, Kenya on March 3-5, 2010.

Over 1,000 participants attended the conference to discuss obstacles such as lack of financing, lack of experience and technical skill, land titling and monitoring challenges, and the complexity of Clean Development Mechanism (CDM) rules. These hurdles have to date resulted in low numbers of African carbon projects: only 2% of CDM projects registered by the UNFCCC are in Africa.

The continent’s relatively low greenhouse gas emissions are part of the reason. Project developers have focused on other regions with “low hanging fruit” before coming to Africa. The late start has resulted in low exposure to discussions regarding greenhouse gas emission reductions and lack of project experience. Lack of involvement from the private sector, coupled with weak initiative-taking on behalf of most African governments, and a general reluctance by local banks to provide financing because they are not familiar with evaluating the risk of carbon projects, have also hampered the development of CDM projects.

Participants also lamented the impact of “brain-drain” on the sustainability of efforts to develop carbon projects. Because of limited resources, technical assistance provided to government officials is often concentrated on one or two individuals per country who tend to leave for greater opportunities in the private sector once they have become experts in the field of carbon finance.

Many in the audience said they hoped to have overcome some of these challenges by the time the third Africa Carbon Forum is convened in Marrakesh, Morocco next year, and looked forward to presenting a new batch of projects registered with the UNFCCC. Their optimism was buoyed by the success stories that were also shared at the conference. World Vision and the World Bank, for example, presented the recently approved Ethiopian Humbo Regeneration Project, Africa’s first large-scale forestry project registered under the UNFCCC. It is expected to sequester over 880,000 metric tonnes of CO2e over 30 years, with the World Bank purchasing 165,000 metric tonnes worth of carbon credits via the BioCarbon Fund.

 

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You'll find more detail on the Humbo project's encouraging impact in this feature story: http://go.worldbank.org/04K0VZ8J20, published by the Bank's Sustainable Development network on March 12. World Vision/ Australia's CEO points out: "While the income from the carbon credits is a welcome bonus, other tangible benefits from the project come from building resilience against climate impacts." More than 2,700 hectares of degraded land have been restored and protected. In addition to creating a "carbon sink," regeneration has resulted in increased production of wood and tree products that generate income for local households, fodder for livestock, a habitat for local species, and a buffer against soil erosion and flooding. This project highlights the role of landscape restoration in addressing both poverty and climate change. There are huge opportunities for similar work elsewhere. The Bank's involvement in the restoration of the Loess Plateau in China is one famous example (http://go.worldbank.org/1YDIIWHNA0). Working with Chau Doan, a Vietnamese photographer, I did a piece once about a project that was restoring mangrove forests in southern Vietnam (http://go.worldbank.org/I70LHQDOI0). Not only were villagers better protected from extreme weather by the newly restored mangrove buffer, life was returning to the coasts, increasing fishing yields. Do you have stories of similar win-win contributions?

In Africa, the impact of climate policy on agricultural emissions is small. There are no approved CDM projects in Africa related to the reduction of agricultural GHG emissions per se. Several projects are under investigation in relation to the restoration of agriculturally-degraded lands, carbon potential of agro-forestry, and reduction in sugarcane burning. Many countries in Africa have prepared National Strategy Studies for the CDM in complying with obligations under UNFCCC. The main obstacles to implementation of CDM projects in Africa, include: limited access to finance by potential developers; financial intermediaries lack knowledge about CDM; lack of trained national CDM consultants; unfavorable investment climate; majority of potential in small projects find it difficult to attract funding; and lack of entities capable of bundling projects for the buyers. However agricultural GHG offsets could be encouraged by market-based trading schemes. Offset trading, or trading of credits which will allow farmers to obtain credits for reducing their GHG emission reductions. The primary agricultural project types include CH4 capture and destruction, and soil carbon sequestration.

CDM projects in Africa are a new subject and require the building of local communities at all levels to widen the understanding and participation of Africa. Africa's technological background is challenged and the continent has insuffient capacity to meet its growing poplution needs. For a long time, the continent has relied on 'borrowed technology' making it a dumping site for substandard technologies. The emergence of Clean Technologies is both a mitigation and adaptation strategy for Climate Change in Africa but the big questions have been the affordability, suitability to local needs and the policy to spur local innovations/inventions that are demand driven. On the other hand, CDM projects should be tailored to the African context and Africa be mentored to appreciate and respond to its potential and actual role in reducing GHG emmisions. Africa is not left behind but we need to loook for possible interventions of documenting and upscaling CDM Projects that have merits in the African scenario.

Thank you Richard for your comment. I agree, more could be done to tailor CDM methodologies to the African context. One can't always transplant technologies from one continent to another without modifications. In the same vein, perhaps it is difficult to transplant methodologies. Many people discussed this issue at the Africa Carbon Forum. Simplification of CDM rules would alleviate the costs and capacity requirements for monitoring projects and program of activities in least developed countries. Lack of infrastructure and limited institutional capacity further calls for adoption of standardized approaches and benchmarks that would greatly lower the project implementation costs, which sometimes reach into the hundreds of thousands of dollars. For example, adoption of a positive list for technology (such as renewable energy and energy efficiency) and project types (land-use and forestry) whose emissions reductions fall under a certain threshold could automatically be considered ‘additional’. Also, the registration process could be simplified. For example, community-based energy efficiency and sustainable land management initiatives, within the small scale limit set by the UNFCCC, should have access to fast track registration. These standardized baseline and default value approaches could be incorporated into the validation and verification manual to promote simplified and cost effective verification protocols. In discussions with African entrepreneurs, the idea of simplification of methodologies and regulatory procedures met with a keen audience at the Africa Carbon Forum. You can hear it in the interviews I did at the Forum: http://www.youtube.com/watch?v=VoDQ9A_Hbwg

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