World Bank, African Development Bank, UN promote carbon credits for Africa

17 November 2006

Agencies encourage donor countries to channel more Clean Development Mechanism (CDM) projects to Africa under new "Nairobi Framework"

The twelfth session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) took place in Nairobi, Kenya over the past two weeks, culminating in the adoption of a new “Nairobi Framework,” which aims to encourage northern countries to curb global carbon emissions through stepping up support for Africa under the Kyoto Protocol’s Clean Development Mechanism (CDM).

To date, Africa has benefited little from the CDM, an initiative designed to allow industrialized countries to meet their commitments to greenhouse gas reductions by investing in carbon reduction projects in developing countries – in other words, to enable industrialized countries to “offset” their continued pollution by helping to reduce or prevent emissions in other countries that do not have their own greenhouse gas reduction targets. The nine CDM projects approved in Africa were all earmarked for South Africa, Morocco, Tunisia and Egypt. The World Bank, the African Development Bank (AfDB) and the UN have all pledged to support the Nairobi Framework to attract greater CDM investment in Africa and provide assistance in mitigating the effects of climate change, which are expected to be the most severe in Africa, despite the continent’s relatively small contribution to global carbon emissions.

Apart from general agreement to increase CDM investment in Africa, discussion of the CDM Adaptation Fund proved to be a bone of contention between developed and developing countries. The Fund, which is not yet operational, is intended to help developing countries cope with the effects of climate change. Rich countries want the Fund managed by the World Bank and UN through the Global Environment Facility (GEF), while developing countries complain that GEF criteria are too strict and procedures, too cumbersome, and that the GEF is inordinately influenced by the United States, who is not even party to the Kyoto Protocol. Details regarding the operations of the Fund, which could grow to $700 million by 2012, were left unresolved.

Participants at the conference also discussed a proposal for developing countries to qualify for carbon credits for the conservation of their rainforests, and agreed to meet next year to discuss further proposals. Under the proposal considered, the Democratic Republic of Congo could qualify for as much as $200 million per year if it halts deforestation: the country’s current deforestation rate of 319,400 hectares per year is estimated to release 45-64 million tons of carbon emissions per year.

But when all is said and done, will these initiatives lead to a real reduction in carbon emissions? Despite claims by World Bank’s new Vice President for Sustainable Development Kathy Sierra that “the cost of decreasing greenhouse gas emissions can be reduced through international carbon trading,” critics have charged that the CDM is inherently unsustainable and will not contribute toward curbing climate change. Under the CDM, industrialized countries that do not meet their carbon reduction targets under the Kyoto Protocol can essentially buy the unused carbon credits of countries that do not use up their allotment of carbon emissions. In other words, instead of cleaning up their operations, polluters in the North can pay for more air space. One observer has equated carbon trading to “a rich neighbor who wants to drive a Hummer paying his poor neighbor to ride a bike.” In the end, critics argue that the mechanism will not help reduce global emissions. Instead, they fear it may in fact enable continued climate change, to which developing countries, particularly in Africa, are most vulnerable.

Additional Resources

• Annan announces U.N. plan to draw more 'carbon credit' projects to Africa, International Herald Tribune, November 15, 2006 (IHT website)
• Press Release: State of the African Carbon Market, The World Bank, November 16, 2006 (World Bank website)
• Carbon trading: Is there a terrible cost? by Terry Slavin, The Guardian, November 21, 2006 (Taipei Times website) 
• Emissions proposal could generate $200m/year for DR Congo, Monga Bay, November 5, 2006 (Monga Bay website)
• Cash row looms at climate talks by Richard Black, BBC News, November 12, 2006 (BBC website)
• Developing world concerned over climate fund by Kimangi Chege, Nature Magazine, November 13, 2006 (Nature website) 
• Press Release: The World Bank and Climate Change, The World Bank, November 13, 2006 (World Bank website)
• Agreements at U.N. climate talks, Reuters, November 16, 2006 (Reuters website) Read a breakdown of the outcomes of the Nairobi conference at:
• Carbon Trade Watch website