Nations turn to new CO2 scheme as CDM withers: study

by Marton Kruppa | Reuters
Monday, 10 June 2013 15:56 GMT

A man eats his breakfast as he walks under solar panels at a solar power plant in Shenyang, Liaoning province, China, June 5, 2013. REUTERS/Stringer

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LONDON, June 10 (Reuters Point Carbon) – The number of emission reduction projects seeking international aid under a new U.N.-backed program to help combat global warming has almost doubled in the past six months, as developing countries increasingly seek carbon finance outside the troubled Clean Development Mechanism (CDM) offset market.

By early June, 35 countries had put forward 66 plans for so-called Nationally Appropriate Mitigation Actions (NAMAs) to seek cash for initiatives such as cutting energy use from homes or making public transport more fuel efficient, according to a paper by Dutch think tanks Ecofys and ECN. 

In late November, countries had submitted just 34 NAMAs seeking support from industrialised nations to help them meet their voluntary pledges to limit greenhouse gas output. 

“NAMAs are becoming an increasingly attractive vehicle for developing countries looking to attract climate finance for low-carbon development activities,” said the report, which was commissioned by the German government.

The increase in requests for NAMA funding comes as project ideas submitted under the CDM, the U.N.’s main carbon offsetting mechanism, hit a seven-year low last month.

The paper said the shift was mainly due to shrinking demand for carbon credits under the CDM and swelling funds available to draw up NAMAs.

The report referred to decisions at U.N. climate negotiations in Doha, Qatar last year when countries including Japan refused to extend their emission reduction targets under the Kyoto Protocol and became ineligible to use CDM credits.

At the meeting, Germany and Britain earmarked 70 million euros to help countries draw up NAMA initiatives.

Despite the increase in submissions, the report said “little progress” has been reported on implementation with no scheme yet in operation.

Over 80 percent of CDM projects have been hosted in either Brazil, China, India and Mexico, leading to criticism that the mechanism failed to help many poorer nations.

The report said NAMAs have the potential to be deployed more widely than CDM, with half of those submitted from Latin America and 25 percent from the Middle East and Africa.

By Marton Kruppa

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