Global Year-End Snapshot of the Clean Development Mechanism 2008
Numbers of Projects World-Wide Registered or in the Pipeline at Over 4,000 up from 60 in 2004 Says UNEP
Hydro, Wind and other 'Traditional' Renewables Dominate but Some Geothermal, Energy Efficiency and Home Lighting Projects Coming Through
Poznan, 11 December 2008— 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 MW tidal project in the Republic of Korea.
One novel project is emerging from Niger where an estimated 60 per cent 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.
Lars Appelquist of UNEP's Risoe Centre in Denmark, which has compiled the end of year snap shot and who has been working with the Niger onion farmers to access the CDM, said: "Some 3,000 tonnes of onions, produced by small farmers can be lost annually".
"Support under the CDM raises the prospect of not only cutting greenhouse gas emissions but more than doubling incomes of onions farmers by boosting exports by cutting post harvest losses. It is a rather unusual but small example of the co-benefits arising from so many CDM projects".
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," said Mr Steiner.
Maryam Niamir-Fuller, Director of the UNEP's Global Environment Facility Division, said today that action was underway to try and boost the number of projects under the CDM that involve afforestation and reforestation and that capture not only carbon but 'co-benefits' such as improvements for biodiversity, soils and adaptation to climate change.
"Today we are announcing a project, in partnership with others, aimed at streamlining the methodology for assessing the carbon of such projects. This could be the key to unlocking the potential of the CDM to help re-carbonize degraded ecosystems," she said.
The other partners include WWF, the University of Michigan, the University of Colorado and World Soil Information.
Some Regional and National Highlights
While the number of registered or proposed projects in Africa remains small, the CDM is now being glimpsed across almost all countries albeit at a low level.
In 2004, only two countries across the entire Continent were accessing the CDM—Morocco and South Africa. In 2008, a large range of African countries now have projects up and running or in the pipeline.
The country with the largest slice is South Africa with just under 30 registered or in the pipeline, followed by Egypt; 12 and Morroco with nine.
Renewable energy projects at close to 40 per cent top Africa's access to the CDM followed by a quarter of projects in the methane reduction area.
Nigeria is likely to generate the greatest financial flows from just four projects worth, if all are approved, some $108 million annually under the $20 assumption; followed by South Africa at some $97 million and Egypt at over $60 million.
The Middle East had zero projects in 2004 and only one in 2005. The year end snapshot indicates that a total of 54 are either registered or in the pipeline with the United Arab Emirates emerging with 13 from zero projects in 2007.
Israel has the highest number registered or in the pipeline at 33 which annual CERs could be worth $72 million a year, followed by Qatar with one registered project potentially worth $50 million annually.
Overall the current portfolio of CDM projects in the Middle East could be worth close to $170 million a year under the $20 assumption for CERs.
Eastern Europe and Central Asia
The 11 countries in this group currently have the lowest number of CDM projects registered or in the pipeline: 42.
In 2004 these countries also had zero CDM access however since 2006 the situation has been improving if slightly with 14 projects then; 29 in 2007 and 42 by November this year.
Armenia tops the list with 8 registered or in the pipeline followed by Cyprus and Uzbekistan with 7 and Georgia with 6. Kyrgyzstan and Tajikistan have one each.
The projects are expected to generate just over $80 million.
Latin America and the Caribbean
Some 814 CDM projects are registered or in the pipeline with the figures dominated by Brazil, close to 330 projects followed by Mexico with close to 200.
However, other countries are picking up. For example Chile had just five projects in 2004 but today has well over 60 registered or in the pipeline. Colombia had zero four years ago and now has 36.
Guyana has just one and Cuba and Jamaica two while Paraguay has four and the Dominican Republic and Uruguay five apiece.
Over 50 per cent of projects registered or in the pipeline are classed as renewables with over a fifth in the agricultural sector including many tackling emissions from animal wastes.
Landfill gas accounts for over 14 per cent and over five per cent are in the area of energy efficiency. Only just over one per cent are in forestry.
The value of the CERs, based on the $20/CER assumption, could reach well over 1.5 billion of which close to $650 million generated in Brazil; around $300 million, Mexico and well over $100 million, Argentina.
Asia and the Pacific
Close to 3,250 CDM projects are registered or in the pipeline that could be worth over $9.5 billion of which some $6.5 billion relate to China.
Renewables dominate the regional CDM picture with close to 70 per cent of the projects followed by energy efficiency projects on both the 'supply and the demand-side' at 18 per cent.
Projects to cut emissions of hydrochloroflurocarbons (HFCs) and oxides of nitrogen amount to two per cent of the projects but the number have flattened out indicating that this mitigation measure under the CDM may be coming to an end.
After China and India, Malaysia comes third with 145 projects registered or in the pipeline up from one in 2004 followed by Indonesia with close to 100 including geothermal.
The countries with the least projects are Fiji, the Peoples Democratic Republic of Laos and Papua New Guinea with just one apiece.
Least Developed Countries
Among these countries there are only 39 projects registered or in the pipeline of which 16 are in the Asia and Pacific region and 23 in Africa.
The potential value of the annual CERs are close to $135 million with Bhutan estimated to generate the most revenue of over $75 million. Uganda, Cambodia and Bangladesh have the most in terms of numbers with eight, five and four respectively.
One relative new development of the CDM is called programmatic in which a large number of 'small' projects are bundled together to make a bigger project proposal that may be more attractive to investors and better in terms of economies of scale.
Ten of these, all of which are in the pipeline, are part of the year-end snap shot. These include a municipal waste composting one for Uganda; an efficient light bulb project for households in Mexico and an over 11MW solar household system project for Bangladesh.
Notes to Editors
The year-end snap shot including tables and graphs can be found at www.unep.org
UNEP Risoe Centre www.uneprisoe.org
For More Information Please Contact Nick Nuttall, UNEP Spokesperson/Head of Media, on Tel: +41 79 596 57 37 or e-mail: email@example.com