London Market Initiative

1
London Market Initiative

• Progress on Company led facility to support
  project identification and preparation in Africa
  
• Martin Hession UK DNA

2
CDM is a Market

• Requires a Focus on Opportunities
• It is driven by competition and least cost
• CDM dependant on identification of potential -
  emissions and emission growth
• Significant Investment Barriers in Africa
• Need to focus on commercial opportunities and
  viable project opportunities

3
London and the Carbon Market

• Worth 30 billion in 2006
• EU ETS 24 billion
• CDM 5 billion
• London Accounts for 50 of Trade
• Several Funds with capitalisation in the hundreds
  of millions (Total 3 - 4billion)
• Small niche funds
• Carbon Market Big Business motivated by profit
  but Corporate Social Responsibility
• CERS used for compliance across the EU ETS
• Use of Credits Traceable to Projects
• Evidence that some companies will pay a premium
  for some classes of project

4
Government Response to Framework

• Secretary of State statements calling on industry
  to respond to Nairobi framework
• Statements of Major industry associations
• Repeat call in Autumn
• Industry lead with government support
• Support includes trade networks
• CCPO
• UKTI

5
City Initiative - Vision

• Vision
• To boost Africas sustainable development and
  share in the CDM
• Focus
• Commercial focus
• Projects that suit local conditions
• Maximise value for the host country and community
• Fair and transparent allocation to buyers

6
Africa Springboard Proposal

• The Springboard will be a for-profit sub-Saharan
  African CDM Project Development company. It will
  initially focus on developing CDM projects in
  sub-Saharan African countries where
• There is no DNA or
• There is a DNA but there are no projects
• The Springboard organization will assist CDM
  development in these countries by establishing
  CDM projects and, if necessary
• Working alongside Government agencies and
  Multilaterals to establish and resource a DNA
• Working to establish locally applicable
  Methodologies
• Completing PDDs and working them through the
  registration process
• Allocating the projects to end buyers through a
  fair and transparent allocation process that
  maximizes returns to the community that the
  project is in
• Because of the difficulty and additional cost of
  developing projects under these conditions, the
  Springboard will initially be subsidized but
  expected to reach breakeven within 3 years.

7
Africa Springboard Implementation

• Secretariat and Network of Offices
• Project Identification per quarter
• To the greatest extent possible, offices will be
  borrowed from the Springboards funding partners
  at least until the enterprise becomes cashflow
  positive.

8
Progress so far

• Core Movers
• Standard Bank, Climate Change Capital, Shell
  Trading so far
• Business Plan Developed
• Support of several others
• Interest of major foundations
• Looking for 1 million kick off
• Financial Contributions
• Secondments/Project Preparation
• In-kind Offices and Networks
• Look forward to reporting back at Bali

9
Review of Government Activities

• General
• Investment Climate Facility - 30million
  dedicated to improving investment conditions in
  Africa
• Purchasing
• Government Offsetting Fund - Offset Travel
  Emissions via CDM Contract Awarded to EEA/TEP
• Government Offsetting Standard Proposing use of
  CDM Credits for Voluntary Offsetting
  Controversial as many would prefer to pursue
  voluntary quantification

• Climate and Energy Focus
• Environmental Transformation Fund 800 million,
  Initial 50m to Forestry Congo Basin Details
  under development and negotiation.
• Support to Clean Energy Investment Frameworks of
  WB and AFDB
• Access to Energy
• Carbon Finance
• Adaptation

• Networks
• REEEP Network Renewable Energy and Energy
  Efficiency Policy Network. 11 of Projects in
  Africa
• Biofuels Partnership Brazil- SADC
  (Mozambique-South Africa) Exploring
  Methodologies
• Global Opportunities Fund FCO Support to
  Methodological Development