CDM in Africa: Top 3 Myths & Realities

Glenn Stuart Hodes

Energy Economist, UNEP-Risoe Center

Myth #1

Africa’s CDM project potential is low.

Reality

Fine theoretical potential, but

- risks higher (CER price compensate?)

- generally smaller

- need elbow grease

- existing methodologies poorly suited to sectors and projects that characterize Africa’s best potential

Myth #2

Africa is very far behind; the CDM is by-passing Africa.

Host country imbalance (1)

Total in the CDM PipelineLatin America 472 35,6% 302716 21,3%Asia & Pacific 800 60,3% 1012325 71,1%Europe and Central Asia 16 1,2% 4667 0,3%Sub-Sahara Africa 21 1,6% 74319 5,2%North Africa & Middle-East 18 1,4% 29440 2,1%Less developed World 1327 100% 1423468 100%

Number 2012 kCERs

Africa Number kCER2012 Egypt 5 12454 1 Landfill flaring, 1 N2O, 1 Wind, 2 Fuel switchEquatorial Guinea 1 23560 1 Fugitive CH4 from oil-wellIvory Coast 1 5661 1 Landfill powerMorocco 4 1991 2 Wind, 1 Solar, 1 EE industryNigeria 2 25026 2 Fugitive CH4 from oil-wellSouth Africa 15 19155 3 Biomass, 2 EE industry, 2 N2O, 2 Landfill power, 2 Fuel switch, Tanzania 1 672 1 Landfill flaring 1 Coal-bed, 1 Hydro, 1 EE households, 1 BiogasTunisia 2 4125 2 Landfill flaringUganda 1 245 1 HydroTotal 32 92891

Host country imbalance (2)

All CDM Projects in the Pipeline in Brazil + Mexico + India + China

as a fraction of all projects

0%10%20%30%40%50%60%70%80%90%

Q1-

04

Q2-

04

Q3-

04

Q4-

04

Q1-

05

Q2-

05

Q3-

05

Q4-

05

Q1-

06

Q2-

06

Q3-

06

Q4-

06

Pro

ject

s

Reality

Early days yet…

- Most non-Annex I countries behind and lacking capacity

- many projects in pipeline, but getting ‘stuck’ for various reasons pre-validation

- some countries had ‘wait-and-see’ strategy

Myth #3

No one is doing anything to promote CDM in Africa.

Reality

Many activities underway already but more resources and long-term view required

• UNEP Risoe working in 15+ countries, in partnership with other agencies/donors

Capacity Development for the CDM(CD4CDM) Activities

Donor: Netherlands Ministry of Foreign Affairs

$15 million, multi-year program with local partners

Africa: Côte d’Ivoire, Mozambique, Uganda, Ghana, Egypt, Morocco, Tanzania, Mauritius, Algeria

– Formalized approval process, regs.

– Training of national experts

– Promotional publications & brochures

– Pipelines of CDM projects

• Example: Kakira Sugar Co-gen

– National CDM website

– Regional Investment Forums

Carbon Finance for Sustainable Energy in Africa

Donor: United Nations Foundation, World Bank $1 million

MALI

CAMEROON

GHANA

MOZAMBIQUE

ZAMBIA

Countries Accomplishments

Assist with Kyoto process and set-up of national institutions for regulation and promotion of CDM projects

At least 3 national stakeholders workshops, development of national action plans

Pipeline of projects (8-10 per country), some already invested by CDCF or other buyers

Example:

-Félou Regional Hydropower project, will generate substantial low-cost clean power and promote energy security in Mali, Senegal, and Mauritania

New UNEP Project Forestry/Bioenergy CDM in Africa

• Meet short and long-term capacity needs and pilot existing and future eligible CDM projects in sector

• 3 Years, simultaneous execution targeting:

– Benin, Cameroon, Democratic Republic of Congo, Gabon, Madagascar, Mali, Senegal

• Implementation Agencies– UNEP-DTIE / UNEP Risoe Center

– Local Partners

– ONF-International

– CIRAD

– BioCarbon Fund, other carbon buyers

Conclusion

UNEP is responding to call to expand cooperation under “Nairobi framework”

- scale-up of Africa activities

- new UNDP-UNEP partnership

- new initiatives planned with UNFCCC Secretariat and World Bank