HomeRegional NewsInternationalGlobal climate impasse casts shadow over clean energy financing

Global climate impasse casts shadow over clean energy financing

The Kyoto protocol
“’ supported by EU,
but other advanced
economies have balked
Panama City, Panama — ESI-AFRICA.COM — 10 October 2011 – An impasse in global climate talks is casting a shadow on clean energy financing in the developing world, with growing doubts over a programme that has funded billions of dollars in projects.

UN-led negotiations involving nearly 200 nations are struggling to come up with a framework after 2012, when the commitments of wealthy countries to cut carbon emissions blamed for climate change run out under the landmark Kyoto Protocol.

A signature feature of Kyoto is the Clean Development Mechanism “’ or CDM as it is referred to in jargon “’ which allows countries to meet their obligations by financing environmentally friendly projects in the developing world.

The European Union has supported a new round of Kyoto commitments after 2012 to avoid any gap, but other advanced economies have balked. Ramping up the pressure, developing countries have warned they would not support a continuation of the CDM without further commitments by rich nations.

“My hunch is that without having a second commitment period, there is no future for the CDM at this moment,” said Naoyuki Yamagishi, who is following the issue for the environmental group World Wildlife Fund (WWF).

CDM executive board chairman Martin Hession, acknowledged a hardening of positions during talks, but said that the programme had an ongoing mandate from the Kyoto Protocol that does not end in 2012.

He argued that the CDM “’ which forecasts its projects will reduce 2.7 billion tonnes of carbon equivalent by the end of 2012 “’ has made a massive contribution both to climate change mitigation and sustainable development.

“For me, the impact is plainly overwhelming,” he said here, where the latest talks under the UN Framework Convention on Climate Change are underway. “What the market would most like to see would be a clear sense of the direction we’re going on mitigation,” he added.

The World Bank has also urged greater clarity. In a recent study, the global lender warned that billions of dollars in private investment were at risk due to the doubts over the future.

Transactions in the CDM market have stagnated and amounted to US$1.5 billion last year “’ less than in 2005 when the Kyoto Protocol took effect, according to the World Bank study.