Energy and climate experts sought ways to help Africa grab a greater share of world carbon markets at the Africa Carbon Forum, held in Marrakech, Morocco, on 4-6 July 2011. Africa has long been under-represented in those markets, receiving only 2 percent of the $2-3 billion traded annually through the Clean Development Mechanism (CDM), the recognized broker for carbon emissions trading.
“Africa is at a stage of significant economic development with major investments in energy and infrastructure. The right mechanism needs to be in place to ensure this rapid development is undertaken along a low carbon pathway,” said Hela Cheikhrouhou, Director of the African Development Bank (AfDB)’s Energy, Environment and Climate Change Department, during her keynote address to the forum.
Ms Cheikhrouhou, like many of the 1,000 participants in the Forum, agreed that the Clean Development Mechanism has proven effective. Even though Africa has so far benefited little from the CDM, this is starting to change.
Continuing to improve Africa’s track record with the CDM was a major topic of conversation during the forum as was the uncertainty that remains over carbon markets post-2012, when the Kyoto Protocol and its emissions caps expire. Without such caps, the market for carbon offsets could be dramatically reduced, leaving little incentive for the private sector to invest in low carbon projects and fewer opportunities for Africa to benefit from carbon trading just as China, India, and Brazil did several years ago.
The AfDB has already made bold moves to address these challenges. It is designing the Africa Carbon Facility to provide post-2012 guarantees to mitigate investor uncertainty by underwriting the purchase of certified emission reductions from African projects until 2020. It has also launched the Africa Carbon Support Program to break down some of the barriers to accessing the CDM. This includes helping project developers prepare projects for the CDM, training government agencies, and raising awareness about opportunities in carbon markets. The Bank is also working on other tailored funding instruments to help Africa finance its climate change efforts.
During the forum, AfDB representatives shared these tools and other expertise in a number of sessions, including CDM monitoring and reporting, financing to mitigate CDM risks, ways for development banks to facilitate the involvement of local banks in the CDM, advice for developers of potential CDM projects, and the EU emissions trading system and its impact on demand for Africa’s carbon credits. The Bank also hosted two side events, one on national mitigation opportunities and another on promoting private sector participation in Africa’s emerging carbon markets.
The Africa Carbon Forum is a trade fair and a knowledge sharing platform for carbon investments in Africa. This year’s forum highlighted the latest developments in the carbon market and ways for the CDM to succeed in Africa.
It was fitting that this forum was held in Marrakesh as this year marks the 10th anniversary of the Marrakech Accords, which kicked off the use of the Clean Development Mechanism.