Africa looking into carbon market
In a hope to cash in on the global carbon market, one of the first carbon reduction initiatives in Africa is being launched in South Africa by their Central Energy Fund (CEF), encouraging investment to identify and develop carbon projects in order to cut emissions, according to Reuters.
“The CEF has a CDM [clean development mechanism] portfolio worth an estimated five million credits annually from projects involved in areas like landfill gas, wind and solar energy. CERs currently trade at around 17.50 euro ($25.30).
One hindrance for African projects has been the administration costs of up to $200,000 per CDM project plus a delay of a year or more to get official U.N. registration.
The CEF initiative could help encourage more projects in Africa, which is badly lagging Asia and Latin America in carbon trading.
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Of 47 Sub-Saharan countries, only four have projects registered under the CDM, none of which has yet to receive CERs.
South Africa leads the pack with 10 registered projects, while Nigeria, Tanzania and Uganda have one each.
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African projects represent less than two percent of the 827 projects registered globally, and are expected to generate reductions of around 3.8 million metric tons annually, a fraction of the 172 million metric tons anticipated from all registered projects to date.
CEF is initially focusing on, but not limiting itself to, the CDM market in South Africa, but it plans to expand both into the voluntary credit (VER) market and to neighboring countries, Pillay said.”