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Trading Carbon : December - January 2011
cash from the international body for similar programmes. The money will support the capacity of Nigeria's government to prepare and implement its REDD strategy with the involvement of local stakeholders, indigenous peoples and forest-reliant communities, a press release at the time said. It is hoped that the scheme will also help to prepare the countries to participate in a future REDD carbon market or a mechanism that would enable them to earn money for c urbing deforestation. Currently, carbon credits generated by REDD schemes are sold in the voluntary markets, which means their value is uncertain. "There are very few buyers of REDD credits in volume at reasonable prices" said Nedbank's Whitfield. Nedbank provided early support to the Kasigau REDD project in Kenya, which is expected to prevent the emissions of 1 million tonnes of carbon dioxide equivalent per year over 30 years. As a part of its commitment, the bank agreed to buy 1.16 million Voluntary Carbon Units from the project with the option to purchase 200,000 credits annually going forward. In December, international negotiators will meet in Durban to try to thrash out a continuation of, or successor to, the Kyoto Protocol, which sees its first commitment period expire at the end of 2012 (see supplement). One of the topics on the agenda will be the potential for new market mechanisms, which could include the forestry sector, to either replace or work alongside the CDM to ensure private sector investments schemes to c ut global emissions continue from 2013 and beyond. The three main proposals for new market mechanisms made by countries, so far, are sectoral crediting, sectoral trading and crediting of Nationally Appropriate Mitigation Actions (NAMAs), but investors are sceptical 15 COVER STORY about whether or not such schemes would be beneficial to Africa. "Generally, it would be pretty difficult for private entities to get involved in sectoral or NAMA-based schemes, as these would most likely be determined by governments," said Standard Bank's Sinclair. Funds for adaptation measures to fight the effects of climate change will also be a priority for African countries at the talks. But, with slow progress on the promised $100 billion per year by 2020 climate finance announced in Copenhagen in 2009, expectations are low. "We will have to see what is decided for the green fund at Durban. But, even after Copenhagen, when huge telephone sized numbers were pledged, we still haven't seen where the money is coming from," said UCB's Farmer. "People are certainly interested in mitigation (in Africa) but then they see the figures that were promised for adaptation and wonder where that money is," he added. l Dec 2011/Jan 2012 Some 27 percent, of all Clean Development Projects (CDM) registered, so far, in Africa have been located in the more industrialised North of the continent, while 28 percent are based in South Africa (see pages 16--18) Egypt plays host to 12, Morocco has fve and Tunisia has three. These countries boast the larger-scale industries where greater emission reductions, and, therefore, Certifed Emission Reductions (CERs), can be generated. The N2O destruction project at Abu Qir Fertilizer Co’s nitric acid plant in Egypt is the continent's largest, by far, in terms of issued credits. Some 6.9 million CERs have been doled out to the project to date, almost 75 percent of the 9.3 million awarded to projects in Africa so far. Away from the CDM, low-carbon fnance is being channelled into North Africa. Morocco is emerging as one of the world’s leaders in solar technology, and Desertec is due to begin construction on a $550 billion solar scheme in the country next year Reuters reported in November. The consortium is also drawing up plans with Tunisia to develop solar and wind projects that could eventually be linked up with European electricity grids. It is in talks with Algeria, Egypt and Morocco about developing a network of solar plants and windfarms that would export power to southern Europe through a proposed network of super-effcient transmission cables. The developers say the project could provide 15 percent of Europe's electricity needs by 2050. The Desertec scheme has a range of corporate backers from the energy, technology and construction sectors, as well as banks and a reinsurer. Shareholders include ABB, Munich Re, Abengoa, Deutsche Bank, RWE, Enel, Saint-Gobain, E.ON, HSH Nordbank, Siemens and Red Electrica. North Africa We are hopeful forestry projects like ours will be eligible for the California scheme Bill Farmer, UCB Bill Farmer, UCB: Where is the $100 billion coming from?