Abstract
This article outlines some of the latest developments and opportunities for development finance institutions1 (DFIs) to become directly supportive of the Clean Development Mechanism (CDM2) in Africa. In striving to make development financing more environmentally friendly and sustainable, DFIs can play a key role in promoting the CDM on the African continent by providing monetary incentives through their project financing activities; encouraging and facilitating partnerships in support of sustainable development, particularly with reference to the CDM, and; providing technical advice and support to clients with regard to project design, planning and implementation.
DFIs have traditionally focused on financing infrastructure and poverty alleviation projects. However, the emergence of the CDM has brought about a shift towards investments in services and products that reduce carbon dioxide emissions and encourage investments in environmentally friendly technologies. This can be ascribed in part to the development of a “carbon market” under the auspices of the Kyoto Protocol that took effect in February 2005. The carbon market and emerging carbon funds are some of the main drivers enabling DFIs to play an increasingly important role in promoting the CDM in Africa.
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Abbreviations
- CDM:
-
Clean Development Mechanism
- CER:
-
Certified Emission Reductions
- COP:
-
Conference of Parties to the United Nations Convention on Climate Change
- DBSA:
-
Development Bank of Southern Africa
- DFI:
-
Development Finance Institution
- ET:
-
Emissions Trading
- GDP:
-
Gross Domestic Product
- GTZ:
-
Deutsche Gesellschaft für Technische Zusammenarbeit Gmbh
- IFC:
-
International Finance Corporation
- IMF:
-
International Monetary Fund
- ISO:
-
International Standard Organization
- JI:
-
Joint Implementation
- JPOI:
-
Johannesburg Plan of Implementation
- LULUCF:
-
Land-use, Land-use Change and Forestry
- NEPAD:
-
New Partnerships for African Development
- ODA:
-
Overseas Development Assistance
- PPP:
-
Public, Private, Partnerships
- UNEP:
-
United Nations Environment Programme
- UNFCCC:
-
United Nations Framework Convention on Climate Change
- UNIDO:
-
United Nations Industrial Development Organization
- WBG:
-
World Bank Group
- WSSD:
-
World Summit on Sustainable Development
- WWF:
-
World Wildlife Fund
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Karani, P., Gantsho, M. The Role of Development Finance Institutions (DFIs) in␣Promoting the Clean Development Mechanism (CDM) in Africa. Environ Dev Sustain 9, 203–228 (2007). https://doi.org/10.1007/s10668-005-9014-3
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DOI: https://doi.org/10.1007/s10668-005-9014-3