Over 500 delegates at the Fifth Latin American Carbon Forum reviewed activities to finance the reduction of greenhouse gases and expressed concern over barriers to carbon mitigation projects and the lack of progress in climate change negotiations.
The Carbon Forum ended on Friday, October 15 in Santo Domingo, Dominican Republic. It was carried out by Government of the Dominican Republic, the Latin American Energy Organization (OLADE), the International Emissions Trading Association (IETA), the World Bank Institute (WBI), the Inter-American Development Bank (IDB), the United Nations Conference on Trade and Development (UNCTAD) and the UNEP Risoe Centre.
After three days of lively debate, the forum concluded the following:
- The discussion revealed that there is a high level of dynamism in the region with regard to the development and financing of activities to reduce greenhouse gas emissions.
- The importance of the European carbon market (EU-ETS) was stretched, which currently represents about 95% of the demand for credits from the Clean Development Mechanism (CDM). Phase 3 of the EU-ETS (2013-2020) will be decisive for guaranteeing the continuity of the carbon market. It has been speculated that restrictions could be put in place resulting in limitations to the flow of carbon credits from Latin America and the Caribbean into the European market. Delegates stressed the importance of guaranteeing market access during Phase 3.
- Participants expressed the current lack of certainty of the potential demand for credits in North America. Should this demand materialize, it would represent significant opportunities for carbon mitigation projects in Latin America and the Caribbean.
- There are a number of barriers that must still be removed to secure an adequate level of promotion of carbon mitigation projects. Specialized finance facilities and a greater level of understanding of carbon project management are required, as well as enhanced capacities for monitoring and verifying emission reductions.
- To achieve a higher number of projects with a larger impact on sustainable development, the following measures are key:
§ Strengthening financial institutions
§ Establishing mechanisms to group small projects within larger strategic programs that reduce transaction costs and guarantee long-term emission reductions
§ Promoting and increasing capacity for projects in key sectors such as energy, transport, tourism, waste management, agriculture, and forests.
To establish the necessary framework and greater clarity for market perspectives in the post-2012 period, both within the UNFCCC and outside, the forum underlined the importance of concrete progress at the Cancun negotiations at the end of the year.
It called upon the negotiators to define emission reduction goals for developing countries, to reform the CDM mechanism, to scale up Annex 1 (developed) country finance for mitigation activities, and to discuss the potential use of nationally appropriate mitigation actions (NAMAs) as an instrument to support the implementation of mitigation measures in non-Annex 1 (developing) countries.
- Maya Hennerkes