Manila, Sep 12, 2006 AEST (ABN Newswire) - Asian Development Bank (ASX: ATB) will help the People's Republic of China (PRC) set up a fund to help the country benefit from the potential multi billion dollar revenue from the Clean Development Mechanism (CDM), through a grant of US$600,000.
Established under the Kyoto Protocol, the CDM allows developed (or Annex 1) countries of the United Nations Framework Convention on Climate Change (UNFCCC) to fulfill their greenhouse gas emission reduction obligations through investment in emissions reduction projects in developing countries (Annex 2) such as the PRC.
By obtaining certified emission reductions (CERs) from projects in developing countries, the developed countries can meet their greenhouse gas targets at lower cost, while promoting sustainable development elsewhere.
"It is estimated that China could generate CER credits of between 150 to 225 million tons of carbon dioxide equivalent per year," says Anthony Maxwell, an ADB Environment Specialist. "This represents a potential annual revenue stream of up to $2.25 billion."
To address this opportunity, the Government will establish a specialized facility - the CDM Fund. The decree setting up the fund sets a levy on the CER revenues generated by various CDM projects in the PRC, that will be used to support domestic climate change related activities.
Supported by international agencies, the fund will manage fees collected from CDM projects and promote domestic CDM projects and other climate change-related projects and activities.
The Government requested assistance from ADB in designing the governance structure and operational mechanism for the CDM Fund, in line with international experiences and best practices. Other agencies will provide assistance, including the World Bank, which will help prepare an operational strategy and make limited seed money available.
ADB has provided previous support to the PRC for CDM activities, including successfully brokering CER credits from a loan project in Liaoning, providing grant technical assistance for CDM capacity building in the energy sector, and supporting CDM development for a coalmine methane project and Gansu Clean Energy Development. It is working on a Carbon Market Initiative that will provide innovative CDM financing for ADB-assisted projects and would complement the PRC's CDM Fund.
The Government will finance about $200,000 of the technical assistance project's total cost of $800,000. The TA will be carried out over about a year to end of July 2007.
Contact
Tsukasa Maekawa
Email: tmaekawa@adb.org
Tel:+632 632 5875; Mobile: +63 918 939-9059
Graham Dwyer
Email: gdwyer@adb.org
Tel:+632 632 5253; +632 898 3413; Mobile: +63 920 938-6487
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