Clean Development Mechanism to Generate $30B by 2012

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Wind and geothermal power projects, alongside ones promoting energy efficiency and even the preservation of onions, are emerging across the globe courtesy of the United Nation-brokered carbon markets. 

A year-end snapshot of the Clean Development Mechanism (CDM) of the Kyoto Protocol–the UN emission-reduction treaty–shows that more than 4,200 projects are up and running, or in various phases of the pipeline.

Leading are medium and small-scale hydroelectric projects; followed by biomass energy, wind power and electricity from industrial waste heat.

However the CDM is also now triggering interest in a wider range of renewable energy projects. These include solar and geothermal power and one 250-megawatt (MW) tidal project in the Republic of Korea.

One novel project is emerging from Niger where an estimated 60% of the national onion crop can be lost, leading to methane emissions as the vegetables rot.

The idea is to use solar dryers and other systems to preserve the onions so they do not rot in storage or on the way to market.

Global CDM Situation

The snap shot covers the years from 2004 up to November 2008 at the global, regional and national scale.

Brazil, China, India and Mexico continue to access the lion’s share of the projects with a total of 3,218 of which 1,557 are for China and 1,135 for India.

But regions and countries once on the periphery of such schemes are beginning to access the environmental, economic and development benefits, many for the first time.

Indeed if the numbers for China and India are excluded, the Asia and Pacific region now has close to 550 projects up from five in 2004.

And if the numbers for Brazil and Mexico are removed from the evaluation for Latin America and the Caribbean, totals here stand at nearly 290 up from 19 four years ago.

Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said: “The CDM and the carbon markets as a whole are one of the great success stories of international cooperative action on climate change. The challenge now is to streamline it and overcome some of the hurdles that are keeping back projects in areas such as the building sector and forestry”.

“By 2012 we estimate that over 8,000 CDM projects may be up and running or in the pipeline generating financial flows from North to South of well over $30 billion,” he added.

The calculation is based on the CDM generating an estimated 1.6 billion Certified Emission Reduction” carbon credits worth $20 each.

“In doing so the CDM is not only emerging as one key and creative instrument for combating climate change but an important stimulus package to developing country economies,”  Mr Steiner said.

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