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Strengthening the African CDM Pipeline

(Photo by Denny Muller on Unsplash)
(Photo by Denny Muller on Unsplash)

BMU has placed particular focus on the African carbon market for a number of years. During the peak phase of the CDM, the African carbon market faced a difficult situation. In large parts of Africa, building the administrative and technical capacities needed was especially problematic – the unequal distribution of projects was repeatedly criticised during the early days of the CDM. The mechanism concentrated on only a few emerging economies in Asia and Latin America, and in many parts of Africa it was hardly used at all. It was only with tremendous difficulty and effort that the capacities needed were built. Safeguarding and securing those capacities is of key importance if Africa’s emission reduction potential is to be further exploited and the continent integrated into the Paris Agreement. Now, those technical and administrative capacities are at risk and could be lost on account of the current carbon market crisis.

To counter this trend, the Federal German Environment Ministry (BMU) supported an initiative (lifecycle 2015 to 2017) headed by Climate Focus. The aim of the project was to identify and test ways to enable Africa’s CDM capacity to be used in the medium term and for it subsequently to be integrated into the Paris Agreement structure. To address these issues, the project focused on international climate financing and attempts to link the CDM with international climate financing institutions, particularly the Green Climate Fund. To identify ways to strengthen the African CDM, activities were implemented at four different levels.

The project team developed proposals for better linkage between the CDM and the Green Climate Fund and also on ways to promote dialogue on linking market mechanisms with climate finance institutions. The proposals range from using the CDM validation process to quantify the climate action impacts of GCF projects to direct promotion of CDM activities via financing from the Green Climate Fund. Another project-related activity involves support for individual CDM pilot projects in efforts to obtain access to climate financing. The project was also designed to raise awareness to the positive contribution made by the CDM in Africa. This involved holding public events, publishing policy papers and other print and digital media. In addition, the project team supported decision-makers from government and administration by means of conceptional work on the question of how successful components of the CDM can be transferred to Article 6 of the Paris Agreement. The project team also analysed options to enable the continuation of CDM activities under the Paris Agreement’s Article 6.

During the lifecycle of the project, which has since been completed, the project team produced a number of publications and discussion papers on linking the CDM with the Green Climate Fund (GCF). In addition to the technical analysis, the project sparked dialogue with Central African stakeholders, bringing them into the international debate by means of side events and publications. At practical level, the project supported selected CDM projects in the acquisition of climate financing. This enabled identification of the opportunities available to CDM project developers in securing their investment via climate financing and also of the challenges they face in that process.