The ailing CDM should be ported into the GCF as a ready-made mitigation tool that can channel climate finance to poorer nations, observers and project developers said on Tuesday.
The link was one of several suggestions made at a side event at the UN climate negotiations in Paris, potentially securing a relevant role for the CDM, which has issued 1.6 billion CERs to date but is suffering from a dearth of investment due to a lack of fresh demand from developed countries.
“We see an architecture in the CDM that is very applicable for climate finance,” said Daniel Rossetto of advisory firm Climate Mundial.
He told the session that the GCF’s recently published guidance for projects seeking funding tied neatly with the CDM’s capabilities on verifying mitigation activities against baselines.
The GCF has received over half of the $10.2 billion pledged by mainly developed nations in its coffers, and it plans to prioritise the funding to mitigation and adaptation projects that are not adequately supported by existing climate finance mechanisms.
Earlier this month, the GCF board gave its approval to channel $168 million into eight climate mitigation and adaptation projects across Africa, Asia-Pacific and Latin America – the first award from the fund almost five years after it was set up.
Fabrice Le Sache of CDM developer Ecosur Afrique, which has developed 40 projects in 17 African countries, called on the GCF to deploy €2.5 billion to buy African CERs at a minimum €5 floor price to stimulate pre-2020 mitigation activities on the continent.
“It would be absolutely crazy not to have something that doesn’t relate somehow to the CDM and its years and years of accumulated work. I don’t understand how it would be possible that this new [GCF] instrument is not connected,” he told a separate side event at the talks.
CDM Executive Board chairman Lambert Schneider revealed that CDM regulators were talking to their GCF counterparts.
“There is contact between the agencies,” Schneider said, without giving further details.
Janos Pasztor, assistant secretary general on climate change to UN chief Ban Ki-moon, suggested that the GCF and CDM-EB should examine working more closely together.
“The UN is looking at these issues in silos. It needs to not duplicate efforts.”
VOLUNTARY LIMITS, OTHER ROUTES
The CDM-EB has been gradually trying to simplify procedures for developers to lower administrative costs under the scheme, and in September launched an online platform to voluntarily cancel CERs, hoping to provide a new source of demand while promoting wider use of voluntary offsetting.
Just 4,605 CERs have so far been cancelled out of 25 eligible projects and 555,350 available units, Schneider said, a tiny fraction of the scheme’s previous volume as a compliance market.
Other suggestions for future uses of the CDM included as a way of linking to green bond markets, and a method for expanding market-based mechanisms to other sectors.
Dirk Forrister of carbon market lobby group IETA reminded delegates that the CDM could prove “a match made in heaven” for a planned global aviation offsetting mechanism.
By Ben Garside – firstname.lastname@example.org