The World Bank criticized carbon market investors on Thursday for failing to fund clean energy projects in Africa and said there were many untapped opportunities on the world’s poorest continent, writes The World Bank Press Review.
The Kyoto Protocol set rich countries limits on emissions of heat-trapping greenhouse gases, but lets them meet these by paying for projects like wind and hydropower in developing nations under its Clean Development Mechanism (CDM).
But carbon credit prices in Africa were about 20 percent lower than global averages, the Bank said in a new survey, due to investors’ perception of the risk of doing business there.
– The World Bank is urging investors to buy in Africa. We believe that perception of risk is not justified, Karan Capoor, the Bank’s regional coordinator for carbon markets, told reporters at a major UN climate conference in Kenya.
– Certainly, a lot of African countries’ economies have been booming and are open for this type of transaction, he said.
The growing CDM trade was worth $5 billion (29,1 mia. kr.) in the last 20 months or so, but most funds have so far gone to China, India and Brazil.
Many African countries have limited industrial sectors, and so have comparatively limited opportunities to reduce carbon emissions. Most of the continent’s transacted projects have been in South Africa and Egypt, but Capoor said half the volume of projects in the Bank’s new CDM ‘pipeline’ was accounted for by Nigeria and Equatorial Guinea.
He said there were also substantial opportunities in the clean power sector in countries like Kenya, where he said only 15 percent of the population had access to electricity.
He said so far CDM did not adequately reward clean power projects.
– We believe this unnecessarily penalizes the poorest people in the poorest countries in the world, and we would urge policymakers to look at that, he said.
The World Bank is to buy carbon credits in Kenya to reduce gas emissions, and enable the development of clean energy in Kenya under the CDM.
The World Bank Community Development Carbon Fund will buy emission reductions at Olkaria II Geothermal Expansion project in Kenya estimated at 900,000 tons of carbon dioxide.
The project is being expanded to generate an additional 35 megawatts which would be injected to the grid in the next two years.
By using the geothermal resources of Olkaria to generate electricity, the project would displace electricity produced by fossil-fuel powered plants in the electricity grid equivalent to 150,000 tons of carbon dioxide per year. … Olkaria is the first geothermal project in Africa.
Kilde: www.worldbank.org
