[DEBATE] : (Fwd) Africa & CDMs... WB wants more

[Patrick Bond]

(This is key: "But many of these projects are speculative, as they are 
based on methodologies not yet approved by the CDM's executive." Sounds 
like there will be a push to 'help' Africa with more CDMs by lowering 
the bar on what qualifies.)

Sub-Saharan Africa lacks investment in clean energy projects
By: Reuters
Published: 3 Sep 08 - 18:04

Sub-Saharan Africa represents an untapped well of clean energy projects 
under a UN-run offsetting scheme, but factors including market 
misconceptions and regulatory gaps are hindering investment in the 
region, the World Bank said on Wednesday.

The Clean Development Mechanism (CDM) scheme under the Kyoto Protocol on 
global warming, worth $13-billion last year, allows companies and 
governments in rich nations to invest in clean energy projects in 
developing countries. In return, investors receive offsets which they 
can sell for profit or use to meet emissions targets under Kyoto.

"A common assumption ... is that (Sub-Saharan Africa's) weak CDM 
portfolio simply reflects its poverty -- that is, its countries have few 
industries, little emissions, and thus limited emission-reduction 
opportunities," the World Bank said in a report, entitled "Unveiling the 
Potential, Addressing the Barriers."

It identified some 2 750 clean energy projects in Sub-Saharan Africa 
that could be registered under the CDM, with an estimated capital cost 
of $158-billion.

These projects would reduce greenhouse gas emissions, blamed for 
potentially devastatin climate change, by the equivalent of 9,8-billion 
tons of carbon dioxide (CO2), or almost twice the emissions of the 
entire European Union.

Assuming an offset price of $10 per tonne, the World Bank said these 
projects could generate some $98-billion in revenues.

This does not include money made from selling the actual electricity 
produced.

If fully implemented, these projects could generate more than 170 
gigawatts of clean energy, or four times the region's current modern 
energy production, the report said.

But many of these projects are speculative, as they are based on 
methodologies not yet approved by the CDM's executive.

Furthermore, the report said the industry is being held back a number of 
factors including a lack of infrastructure development, an unskilled 
work force, and regulations hampering projects from accessing the energy 
market.

"Regulatory gaps in the region's energy sectors hinder or prevent clean 
energy projects from selling their energy production," the report said.

The report also contends that investors eyeing the region are 
approaching the wrong people, targetting only those in the environmental 
community.

Project developers should target decision makers from the related 
industries and local engineering consulting firms, who would help 
implement the necessary technology, the report said.

The World Bank also estimates that these projects could displace future 
Sub-Saharan emissions by 740-million tons of CO2, more than the region's 
current total of 680-million tons per year.

According to the report, only 1,4 percent, or 53 of the nearly 4 000 
projects in the CDM's pipeline, are located in Sub-Saharan Africa - nine 
times smaller than the region's global share in greenhouse gas 
emissions. China and India have dominated the CDM market thus far, and 
are home to more than two thirds of projects currently in the pipeline.