Geneva, 5 May 2009 -- Climate experts, economists, and government officials discussed at a three-day UNCTAD meeting at the end of April how to expand participation by developing countries in the Clean Development Mechanism (CDM) , the international programme designed to create a market system for reducing carbon emissions into the atmosphere.
The CDM allows industrialized countries, which have emissions-reduction targets under the Kyoto Protocol, to achieve such reductions through individual projects in developing economies. Investments to generate these reductions are compensated with certified emission reductions units, or CERs (denominated in units of one ton of CO2). Currently ten developing countries account for 85% of all CDM projects. The hope is that numerous developing countries will be able to benefit from CDM, which can attract funding for projects such as industrial energy efficiency, methane capturing from urban landfills, low-emission transportation modes, and reforestation.
Among the issues discussed at the 27-29 April meeting were the state of play of the current negotiations on a climate deal for the post 2012 period (when commitments of the Kyoto Protocol expire), scenarios for the future carbon market with the participation of the European Union and the United States, and the challenges developing countries face in benefiting from the CDM.
The CDM has successfully created a vigorous "carbon market" for developing and developed countries alike. By April 2009, it had issued CERs amounting to 277 million tons of CO2, generating in just four years € 2.7 billion in CDM investment at €10 per ton of CO2 (t/CO2). By 2012, this amount will reach 1,335 million tons, or roughly € 13 billion in new investments in developing countries. At the close of April, CER prices for December 2009 were being traded at €14.
The meeting concluded that the CDM´s achievements in its four years of existence far outweigh its difficulties and flaws. UNCTAD has been asked to assist in streamlining further investments under the CDM and to supporting developing countries in developing nationally appropriate mitigation actions (NAMAs) that include innovative policy approaches related to reduced deforestation, clean energy production and use, and clean transportation options.
UNCTAD was equally invited to join efforts with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat, the United Nations Development Programme (UNDP), the United Nations Environment Programme (UNEP) Risoe Centre, and the World Bank to boost emission reduction projects in a greater number of developing economies.
