While the world awaits the fruits of the Kyoto Protocol in limiting the emission of greenhouse gases in the developed economies, there have been slight but potentially significant developments for small, economically vulnerable countries like Guyana.

Around two months ago a new fund dedicated to the reduction of carbon dioxide emissions while at the same time utilising `carbon financing’ as a development tool for countries like Guyana was launched. Created by the World Bank in association with the United Nations Climate Change Secretariat and the International Emissions Trading Association, the Community Development Carbon Fund (CDCF) will back topical Third World endeavours such as renewable energy, the efficient use of energy and the conversion of solid waste to energy.

Commitments of around US$35M have been secured for what is initially a US$100M fund. The contributors include some of the usual suspects such as Canada and The Netherlands but also a growing number of environmentally sensitive global conglomerates such as Daiwa Securities of Japan, BASF of Germany and Endesa of Spain.

The new fund will function through the Clean Development Mechanism (CDM) which had been established under the protocol in 1997. Essentially the CDM allows industrialised countries which have signed onto the protocol to fulfil some of their greenhouse gas reduction commitments through projects in developing countries.

According to the Environmental News Service, carbon market research by the World Bank has shown that 13 percent of private sector carbon reduction investment went to developing countries and zero percent to the least developed countries.

And according to a report on SolarAccess.com the CDCF projects will be developed in line with the small-scale CDM mechanism and “these will be some of the most valuable carbon emission reductions in the carbon market...because this market is responding very positively to certified emission reductions” which come with development benefits. Further, the carbon reduction credits will be transferable across various regulatory regimes including those under the protocol, the European Union, Canada and Japan. In this respect, the European Commission on July 23 adopted a draft directive linking the European Union’s (EU) new emissions trading system with the CDM and other Kyoto Protocol initiatives. This would allow European companies participating in the EU’s emissions trading regime to obtain credits from a range of projects that cut emissions outside of the Union. This could save these European companies 700M euros a year.

A framework has therefore been set for countries like Guyana to market feasible clean energy projects to companies in the industrialised countries desperate to meet their annual reduction quotas. It was therefore heartening that the government on July 23 signed an agreement with the United Nations Development Programme (UNDP) under which capacity building and demonstration projects using renewable energy would be pursued. The agreement recognises that as the system of carbon credits evolves renewable energy sources could become more attractive in comparison to fossil fuels. Among other things, it would allow Guyana to explore new financing alternatives under the CDM.

In an environment where aid streams are drying up, the CDCF and the CDM offer welcome opportunities and Guyana should seek to speed up access to the UNDP project which will in turn enable the country to seek out financing for emission-cutting projects. Already, a clutch of innovative projects have been realised with international funding. These include a landfill project in Bahia in neighbouring Brazil. The Salvador da Bahia landfill is expected to slash emissions of the greenhouse gas methane by expanding coverage of the landfill gas-capture system.

Equipment is to be installed for methane destruction via controlled burning. Another aspect of the project will see methane gas being captured to generate electricity.

How about our noxious fermenting landfill in the city which is oozing oodles of methane gas and has ignited on several occasions? Could it be a possible applicant for funding? The Bahia landfill site has been lauded as an example of measurable and verifiable greenhouse gas reduction.

While there was mention of the possible use of carbon credits for the Amaila Falls hydro project this still seems a long way off. Guyana must begin focusing on projects which could be nominated for funding such as converting sawmill and woodcutting waste and harnessing landfill gas production. Whatever scope exists for funding for Iwokrama should also be explored.

And there are other potential sources of assistance in the works. The World Bank is putting together another fund which will offer carbon finance to demonstrate and test projects which capture or remove greenhouse gases from forest and agricultural eco-systems. The BioCarbon Fund is expected to be in force later this year. According to the Environmental News Service the fund would plug environmental benefits such as conservation of biodiversity, the reduction of poverty and opportunities for adapting to climate change.

These are openings that the fullest advantage should be taken of.