CARBON CREDITS FOR SUB-SAHARAN AFRICA

CONCEPTUALIZATIONS OF SUSTAINABILITY IN THE CONTEXT OF

VOLUNTARY CARBON MARKET

by

Maryna Karavai

Supervisor Dr. Anne Jerneck

(LUCSUS)

Co-supervisor Dr. Miriam Hinostroza

(UNEP Risø Centre)

A Thesis Submitted to

Lund University

in partial fulfillment of the requirements for the degree of

MASTER OF SCIENCE

International Master’s Programme in Environmental Studies and Sustainability Science (LUMES)

Lund University Center for Sustainability Studies

LUND

May 2009

ABSTRACT In the context of climate change, carbon credit transactions in the form of GHG emission reduction projects are key in providing streams of finance to developing nations. Carbon finance for sustainable development is the core subject for global climate policy debate. One of the major challenges that market-based efforts are facing is that of engaging developing nations. African countries' participation in the global carbon market has been poor as of yet. Nonetheless, the voluntary market as a less formalized carbon market provides numerous opportunities for the African continent. The complex context of carbon development in the African regions is highlighted in this thesis. Seeking to fill information gaps on the role of carbon markets in addressing the needs of developing countries, this paper focuses on voluntary carbon market projects and aims to provide insights into development trends and the sustainable development potential they may hold for the region. Analysis is based on the evaluation of 70 projects of the voluntary market across the supply chain in 21 country, including those in the pipeline and registered. A discourse analysis of project development documents, requirements of the standards applied and organizational responses to a survey are employed to understand how sustainable development as a practical framework is conceptualized and what elements play a role in constructing the concept. From this, the report evaluates potential contribution of VCM projects to the overall aim of sustainable development in the African regional context. Key words: voluntary carbon markets, sustainable development benefits, sustainability, discourse analysis, Sub-Saharan Africa. Word Count: 15,044

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ACKNOWLEDGEMENTS I owe special thanks to so many people without whom this work could not have happened. First of all, I want to thank Anne, my supervisor, for supporting my sometimes overambitious ideas and being supportive and very nonintrusive in her guidance. Special acknowledgements are also due to all the colleagues at UNEP Risø Centre who made this journey so fascinating. I would like to express unlimited gratitude to my co-supervisor, Dr. Miriam Hinostroza, for believing that a biologist can handle a research on markets and whose understanding, and encouragement, added considerably to my work. Special thanks go to Karen Holm Olsen for her careful reading of the text and her constructive criticism. I would also like to thank Thanakvaro De Lopez for discussions on economics and taking me seriously when trying to understand my logic. And, of course, Lilly, for her great smile and keeping track of my deadlines and hot chocolate cups. I am thankful to the whole Lumes family for all those wonderful moments we shared during the last two years. I am indebted to a great number of special people who contributed indirectly to this work and who kept me going. Anna-Leena deserves her own mentioning for being that very person to say a right thing at the right moment. Thank you, Mickey, for getting me through the final weeks of writing and being there for me in difficult times. I am very grateful to my family for all the times you listened, inspired, and shared my troubles and laughs.

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LIST OF FIGURES AND TABLES Figure 1. Respondents Distribution by Organization Type. Figure 2. Discourses within Sustainability Discourse. Figure 3. Carbon Markets Volume of Transactions in 2007, 2008. Figure 4. Projects Distribution by Status. Figure 5. Projects Distribution by Country. Figure 6. Factors Defining Selection of Voluntary Market Approach. Figure 7. Projects Distribution by Type. Figure 8. Projects’ Developers Distribution by Organization Type. Figure 9. Projects distribution by Standard. Figure 10. Dominating Categories Identified at the Project Level. Figure 11. Interpretation of Sustainability on a Project Level. Table 1. Key Elements of Versions of Ecological Modernization Discourses. Table 2. Elements of Sustainability Discourses Covered by Standards.

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LIST OF ABBREVIATIONS

AFOLU Agriculture, Forestry and Land Use CCX Chicago Climate Exchange CDM Clean Development Mechanism CER Certified Emissions Reductions CSR Corporate Social Responsibility ER/ERs Emission Reduction(s) ERU Emissions Reduction Unit EU ETS European Union Emissions Trading Scheme FSC Forest Stewardship Council GHG Greenhouse Gas GS Gold Standard HCF-23 Hydrofluorocarbon-23 HDI Human Development Index ICROA International carbon Reduction and Offset Alliance JI Joint Implementation JVETS Japanese Voluntary Emissions Trading Scheme LDC Least Developed Countries LULUCF Land Use, Land Use Change, and Forestry NGO Non-governmental Organization OECD Organisation for Economic Co-operation and Development OTC Over the Counter PDD Project Design Document REDD Reducing Emissions from Deforestation and Degradation SD Sustainable Development SDD Sustainable Development Discourse SEMD Strong Ecological Modernization Discourse UN United Nations UNCSD United Nations Council on Sustainable Development UNEP United Nations Environmental Program UNFCCC United Nations Framework Convention on Climate Change VCM Voluntary Carbon Market VER Verified/Voluntary Emissions Reductions WB World Bank WEMD Weak Ecological Modernization Discourse

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TABLE OF CONTENTS ACKNOWLEDGEMENTS II LIST OF FIGURES AND TABLES III LIST OF ABBREVIATIONS IV

1. INTRODUCTION 1

1.1 PROBLEM STATEMENT 1 1.2. ANALYTICAL FRAMEWORK 4 1.2.1 RESEARCH AIM 4 1.2.2 MAIN RESEARCH QUESTION 4 1.2.3 RESEARCH SUB-QUESTIONS 4 1.3 METHODS, MATERIALS AND SELECTION 5 1.3.1 STUDY DESIGN 5 1.3.2 MATERIAL AVAILABILITY 6 1.3.3 LIMITATIONS AND SYSTEM BOUNDARIES 10 1.3.4 DISPOSITION 10

2. THEORETICAL FRAMEWORK 11

3. UNDERSTANDING CARBON FINANCE 14

3.1 ORIGIN OF CARBON MARKETS 14 3.2 CARBON MARKETS BASICS 15 3.3 VOLUNTARY MARKET 17 3.3.1 REGULATORY CONTEXT 19 3.3.2 SUPPLY, DEMAND AND ACTORS 19

4. EMPIRICAL FINDINGS 22

4.1 VOLUNTARY MARKET DEVELOPMENT TRENDS IN SUB-SAHARAN AFRICA 22 4.1.1 GEOGRAPHICAL DISTRIBUTION 22 4.1.2 PROJECT TYPES 24 4.1.3 ACTORS 26 4.1.4 CHALLENGES AND BARRIERS 28 4.2 CONCEPTUALIZING SUSTAINABLE DEVELOPMENT 28 4.2.1 A STAKEHOLDER’S PERSPECTIVE 29 4.2.2 A STANDARD’S PERSPECTIVE 30 4.2.3 A PROJECT’S PERSPECTIVE 34

5. DISCUSSION 37

5.1 SUSTAINABILITY CONTEXT OF CARBON FINANCE 37 5.2 CARBON CREDITS FOR SUSTAINABILITY OR SUSTAINABILITY FOR CARBON CREDITS? 39

6. CONCLUSIONS 40

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7. WORK CITED 42

8. APPENDICES 49

ANNEX I. LIST OF ORGANIZATIONS CONTACTED FOR THE SURVEY. 49 ANNEX II. LIST OF ORGANIZATIONS IDENTIFIED AS INVOLVED IN THE PROJECTS DEVELOPMENT OR OPERATION IN SUB-SAHARAN AFRICA. 50 ANNEX III. LIST OF INTERVIEWEES. 51 ANNEX IV. QUESTIONS FOR INTERVIEWS AND QUESTIONNAIRE. 51 ANNEX V. PROJECTS INVENTORY DATABASE 52 ANNEX VI. RESULTS OF PROJECTS DOCUMENTS ANALYSIS. 57

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1. INTRODUCTION

1.1 PROBLEM STATEMENT Climate change is a defining issue for human development in the 21st century.

In the context of climate change, carbon credit transaction in a form of GHG emission reductions projects are at the heart of low-carbon path development for the longer term. Future financing of mitigation and adaptation activities in developing countries is necessary in order to secure global action and make tighter reductions targets possible. The upfront costs of low-carbon approaches deployment and the incremental cost difference between carbon-intensive and low-carbon practices will not be met without significant investments (UNEP, 2009). Carbon credits have the potential to provide a significant stream of finance from developed countries for activities in the developing ones.

The rapid development of carbon finance raises a number of critical questions about the capacity of carbon markets to address the great challenge of climate change. On the one hand, they have a potential to make a difference in the development pathways of least developed countries. Indeed, one of the major challenges that current market-based efforts to tackle climate change are facing is that of engaging developing nations. Participation of developing countries is fundamental to climate change adaptation and mitigation successful strategies. The overwhelming majority of Least Developed Countries are located in Africa, as are most countries characterized as having “low human development” by the Human Development Index (HDI) (UNDP, 2008). Driving investments from industrialized countries to less developed ones can foster transition towards a less carbon-intensive society. Of all regions, Africa is still in the most pressing need of development. Yet the regions’ participation in carbon markets has been negligible.

On the other hand, another serious concern remaining is the contribution of existing compliance project-based mechanisms to sustainable development objectives while investing in activities aiming at GHG emission reductions. The effectiveness of Clean Development Mechanism (CDM) as a major compliance market mechanism in assisting host countries in their undertaking to promote sustainable development has been widely questioned by academics, civil society groups and practitioners (CAN, 2007; CDM Watch, 2004; Greenpeace, 2008; Ellis et al., 2007; Olsen 2007; Pearson 2007). CDM projects proponents see it as an effective tool to ensure emissions reductions and lower the cost of compliance for Annex I countries1, while providing assistance to the poorest countries to leapfrog outdated carbon-intense practices (Boer, 2008). Although detractors argue that as opposed to the cost-effective emission reductions objective of the mechanism, the sustainability aspect of CDM is rarely a

1 The industrialized countries listed in this annex to the Convention which were committed return their greenhouse-gas emissions to 1990 levels by the year 2000 as per Article 4.2 (a) and (b). They have also accepted emissions targets for the period 2008-12 as per Article 3 and Annex B of the Kyoto Protocol. They include the 24 original OECD members, the European Union, and 14 countries with economies in transition (UNFCCC, 2009).

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main driver for project development (Ellis et al., 2007) and CDM supports projects that would have happened anyway (Aldy & Stavins, 2008). Even though sustainable development is one of the two purposes of the CDM, and is of a key concern to developing countries, the CDM in most of the cases only provides monetary profit incentives for the other, the GHG-reduction purpose, and is claimed by many to produce low-cost ERs at the expense of achieving sustainable development benefits (Ellis et al., 2007; Olsen 2007; Sutter and Parreño 2007; Schneider, 2007). On a global scale Cosbey et al. (2005) argue that concentration of CDM projects in a few developing countries violates the stated overarching goal of the CDM to contribute to sustainable development, because ‘many countries are denied such benefits a priori if they are left out of the mechanism’. On a project level, Sutter and Parreño (2007) conclude, that only 1% of all the CERs generated so far ‘contribute significantly to sustainable development’. Olsen (2007) has evaluated the contribution of the CDM by reviewing close to 200 studies and concluded that ‘left to market forces, the CDM does not significantly contribute to sustainable development’. A number of authors go further and claim that CDM in its current design is fundamentally incapable of making substantial contribution to sustainable development (Sterk, W., & Wittneben, B. 2005; Pearson, 2007). So far, distribution of CDM projects as a major compliance market mechanism under Kyoto Protocol for carbon finance has been rather unequal, with projects being concentrated in a few countries in Asia and Latin America (Boyd et al., 2007; Michaelowa, 2005; UNEP Risø Centre, 2009). Despite the idea that CDM should address the role of development within the carbon markets, African countries’ participation had been poor as yet. Sub-Saharan Africa, with 11% of the world’s population, accounts for only 3.6% of global emissions of CO2eq, indicating low levels of income and of energy consumption (Collier, 2008). Meanwhile, contributing the least of any continent to global warming, Africa has been already impacted by the changing climates (IPCC, 2007). Increasing evidence of drought, fall in agricultural yields, decrease in water supplies have been observed (IPCC, 2007). Moreover, the numerous challenges Africa is dealing with will be only amplified by climate change, since widespread poverty, recurrent droughts, inequitable land distribution, and overdependence on rain-fed agriculture make it especially vulnerable to the impacts of climate change (IPCC, 2007). The consequences in Africa are likely to be severe due to the factors mentioned above, as well as its limited capacity to adapt (Collier et al., 2008). At the same time, the rate of growth in emissions from the region is above the world average (Collier et al., 2008). Africa is now accounts for 20% of world emissions from land-use and land-use change, largely deforestation (Collier, 2008). As a result of CDM’s lack of success to contribute to sustainability, and a growing class of buyers demanding ‘high quality’ credits, tendencies to go beyond compliance in order to ensure sustainable development benefits within GHG emission reductions projects have been growing with the development of carbon markets. This includes expansion of non-Kyoto based trading schemes, voluntary offsetting projects and additional standardization of CDM projects. The voluntary market, as a less formalized platform for carbon transactions, has been evolving rapidly. Apart from numerous possibilities it provides for the African continent to participate in carbon

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markets, it is considered to be able to provide better opportunities to promote sustainable development in the region (Harris, 2007). Regardless of Africa’s prospects to gain outside investment for sustainable development through the Kyoto mechanisms, the continent has thus far received an extremely low share of CDM investment with 102 projects registered in a pipeline out of total 4733 (UNEP Risø Centre, 2009). More than a half of projects are in South Africa (UNEP Risø Centre, 2009). With only 2% of total number of CDM projects African continent has not benefited from this mechanism notwithstanding its potential in biomass, renewable energy and forestry. Several barriers, including lack of available finance, lack of industrial-based economies, high dependence on agriculture and forestry, lack of strong institutional framework, high risk level for investments, lack of expertise, lack of political will, restrictions on agro-forestry projects under CDM, among other factors appear to impede participation in market-based mechanisms (Lesolle, 2008; WB, 2008). While three quarters of Sub-Saharan Africa GHG emissions come from land use and land use change (Collier, 2008; WRI, 2008) the large classes of LULUCF assets attractive from the perspective of sustainable development are constantly excluded from the regulatory markets (WB, 2008). In terms of generated volumes of projects, if compared in relation to Kyoto-based projects, Africa is, however, better positioned in the voluntary market (Ecosystem Marketplace, 2008). Although here again it lags behind other continents. VCM-based projects provide additional non-carbon benefits and have potentially more scope to invest into small-scale community-oriented land use and agro-forestry projects and, thus, have potential to fill in the gaps the compliance market does not address. This emerging carbon market offers a platform for GHG emission reductions for the private sector actors aiming to invest in ‘social good’ projects. Sub-Saharan Africa has a lot of opportunities to benefit from certain voluntary-based projects that can address the issue of engaging underrepresented developing countries into the global carbon market, providing stream of finance, and contributing to overall sustainable development objective in the region. Indeed, there is a need to assist in adaptation of development pathways that will confront major causes of GHG emissions and will utilize the opportunities African continent offers in consistency with regional and global sustainability goals (IPCC, 2007; Canadell et al., 2008). Thus, more robust understanding of the complex context of carbon development in the African regions is required if positive sustainable development benefits are expected to result from carbon finance. Moreover, much more has to be understood about the role of carbon markets in addressing the needs of developing countries, and in particular how the voluntary-based projects can contribute to channeling carbon investment to Sub-Saharan Africa and the sustainable development potential they may hold.

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1.2. ANALYTICAL FRAMEWORK

1.2.1 RESEARCH AIM

This study has twofold purpose. Firstly, it aims to enhance understanding of the current development of the voluntary market in Sub-Saharan Africa as one of the sources of investment for sustainable development. Secondly, in doing so, it intends to provide critical evaluation of the voluntary market role in contributing to sustainable development in the region.

The present research was designed to address the following questions, which are

embodied in the structure of the paper:

1.2.2 MAIN RESEARCH QUESTION

To what extent can the dual aim of providing carbon finance and delivering sustainable development benefits through investing in GHG emission reduction projects be satisfied by voluntary markets in Sub-Saharan Africa?

1.2.3 RESEARCH SUB-QUESTIONS

• What are the benefits and the potential for voluntary carbon markets in engaging underrepresented developing countries into global carbon markets and providing a source of funding for sustainable development in Sub-Saharan Africa?

• How sustainable development is interpreted as a practical framework in relation to GHG emission reduction projects in the context of voluntary market in Sub-Saharan Africa?

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1.3 METHODS, MATERIALS AND SELECTION With the overall aim and research questions in mind this section will address the methodological approaches employed by this thesis.

1.3.1 STUDY DESIGN On the whole, this study can be categorized as qualitative research, as it has served to enhance comprehension of the complexity of a problem (Mikkelsen, 2005). The general research strategy employed by this study is a mix of qualitative and quantitative forms, a cross-sectional design, and a mix of text analysis, interviews, and questionnaire methods. The need to understand the relevant aspects of the carbon markets phenomena justifies the adopted qualitative approach. The qualitative analysis is especially relevant for this study, which aims not only to describe the current state of the voluntary market-based mechanism, but also to explain future development of the carbon finance options in Sub-Saharan Africa. It was considered suitable for the current research as a strategy suggested for the exploration of the subject. Moreover it leaves room for interpretation of the studied phenomena from the perspective of agents involved. One of the distinctive characteristics of qualitative research is that it is more concerned with words, or narratives, than numbers (Bryman, 2004). Its epistemological position stresses understanding of social world through examining the interpretation of the world by its participants (Bryman, 2004). Its ontological position is described as constructionists, which implies that social properties are outcomes of the interaction between individuals. It views the studied phenomena as a social narrative and process, with an aim to show how it unfolds over time (Bryman, 2004). Hence, the application of qualitative research encouraged my ‘viewing world through the eyes’ of market agents and enhanced my perspective, by providing valuable insights into the nature of studied phenomena (Silverman, 1999). The quantitative research consisted of collecting empirical data with relevance to the subject of voluntary carbon market evolution in order to enhance understanding of the phenomena, to emphasize the role it plays and to be able to hypothesize about its future development. The analytical part of the thesis contains elements of discourse analysis. In that sense the study concentrates on details of the narratives adopted, such as differences in definitions of terms or differences in ways of addressing similar ideas (Gee, 2001; Punch, 1999; Wodak & Meyer, 2001) about sustainability in GHG ERs projects by various actors or contextual meaning of the projects and standard documents. Assuming that the conceptualization defines the outcome or in the words of Gill (cited in Bryman, 2004) this study refers to sustainability concept as “something said as being a solution to the problem”. Thus, analysis of its conceptualization provides insight into possible outcomes.

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Discourse analysis is sensitive to ‘how spoken and written languages are used and how accounts and descriptions are constructed’ (Punch 1999, p. 229). It has an aim to ascertain the contextual meaning of the documents and other information collected, as for example, the project reports, views expressed in the interviews, standards related documents, and to identify their rationale and effects. In other words, it means that different ‘world views’ are considered within this study as expressed narratives of the phenomena. They are analyzed in order to understand some common comprehensions and underlying value commitments within the sustainability discourse. As well as to gain understanding of how sustainable development as a practical framework is conceptualized and what elements play a role in constructing the concept. After the way of framing sustainable development by various actors of carbon market will be presented, I will compare it to the elements forming discourses as adopted by the study and will draw conclusion on the nature of discourse prevailing in the phenomena of voluntary carbon market in the studied region. Next, I shall turn to an elaboration upon the methods utilized by the study: of text analysis, interviews, and questionnaires and a method of discourse analysis.

1.3.2 MATERIAL AVAILABILITY

Firstly, the data on market development were obtained through published reports from international organizations, private companies and non-governmental organizations, which have examined the recent developments of the voluntary carbon market, as well as academic articles and other publications available. These materials were located primarily through search engines like Lund University’s ELIN system, Google Scholar, a union catalog of digital resources OAIster, Danish Technical University DADS system, Ecosystem Marketplace Reference Library, New Carbon Finance open resources and the UNEP publications database. It has led to the discovery of the key areas to be further analyzed and determined the choice of participants for the interviews, questionnaire respondents and projects to be included in the inventory. The choice of the empirical evidence, i.e. what information could be supplied from literature or had to be investigated empirically through questionnaires, interviews, what the alternatives under consideration are, was tentatively explored through expert consultations.

The first stage of building the inventory of voluntary market-based projects in

Sub-Saharan Africa involved a comprehensive survey of the World Wide Web and identified a total of 68 projects across the supply chain, including those in the pipeline and registered2. The retired projects were not included in the inventory due to the insufficiency of the information available. Only the projects that claimed as aiming for carbon transactions are included in the inventory. A number of projects for which not enough adequate data for evaluation was available were not included in the inventory, even though they were identified during the initial stage. There are a

2 The registry mechanism for the voluntary market is a system of VERs accounting that enables the tracking of VERs generated from issuance to retirement, basically a database. Thus registered projects here mean the project is registered under one of the voluntary standards.

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number of projects discussed in this study that were not included in the study inventory. A database of relevant and available information obtained from this preliminary web survey includes project type, project location, transaction size, crediting periods, and certification standard and is presented in the Annex V. Project co-benefits were included in the database based on information retrieved from the project documents accessible. Information on project developer, project operator is provided for the projects it was available for.

The actual projects were identified through the publicly available registries like the Gold Standard Registry, the CarbonNeutral Company Register, the VCS Registry System, TÜV SÜD "Blue Registry" certification database, the web directory of carbon offsets Carbon Catalog and project portfolios of major retailers of VERs (Annex I). 23 organizations involved in project s activities were identified (Annex II). Some data regarding existing projects were collected directly from project developers through the questionnaires disseminated. To avoid double counting after data available for projects were analyzed some projects were excluded from the inventory based on the conclusion that the projects activities and emission reductions by the projects were covered within other project. This can be explained by the absence of a unified database, which results in a number of cases when the same activity might be presented as two separated projects, based on the varying vintage period or other aspect. For instance, in case of a reforestation project, when after the project changes the owner, the new project maintainer might aim for altering a standard choice, reevaluating generated offsets volumes or performing extra-activities (enlarging tree plantation), changing thereby project characteristics, which in turn might result in uncertainty and double-counting. Sustainable development benefits and co-benefits were evaluated for the projects based on the Project Design Documents (PDDs) available; information publicly provided by the project developers and offset retailers; questionnaire results and interviews conducted. Due to a number of factors such as the nature of Over-the-Counter (OTC) markets, ascertaining offset price, and acquiring information on credit buyers and specific transactions data proved difficult to obtain. The proprietary nature of some project information, such as offsets price, data on offsets buyers was not available in most of the cases and prevented the completion of the inventory database. Moreover, documents providing comprehensive information regarding the project were available for a limited number of projects only. Though, the present study inventory covers significant amount of projects in the region, it doesn’t claim to be a complete database of all voluntary market-based projects in Sub-Saharan Africa.

Secondly, a survey was conducted among organizations identified as potentially involved in the development of voluntary market-based projects in the region. The survey instrument, a questionnaire, was e-mailed to the list of selected organizations provided in Annex I in the first week of April 2009. In order to improve response rate the reminder was sent via e-mail in the third week of April 2009 and was followed by phone reminder shortly.

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The organizations involved in the voluntary market projects were identified through the registries and based on the previous research and publications available (Bayon et al., 2008; Cruz, 2007) that were believed to have adequate knowledge about the issue as well as through the publicly available registries for the voluntary market projects (Bryman, 2004). The questionnaire was kept short as suggested by Silverman (1999), with only thirteen questions and included both open-ended and close-ended questions in ‘order to reduce the risk of ‘respondents’ fatigue’ (Silverman, 1999). Low-response rates are a disadvantage of surveys; the follow-up questions or elaborations that cannot be asked are another weakness of this method (Trochim, 2006). Moreover, the study cannot be explained in person, and a good command of English is required to complete the questionnaire (Trochim, 2006), as well as various actors may have interpreted the questions differently from what the

researcher had intended. Thus, verification of qualitative research is important as it is often accused of subjectivism (Bryman, 2004). Indeed, only 12 of the 23 organizations identified as project developers or project operators took part in the survey, which is an

approximately 52 percent response rate. However, they represent quite a good variety of organizations, with respect to the types of organization presented in the region and organization types (project developers, offset buyers and retailers) as one may see from the charts presented in the Figure 1. The outcomes of the survey were evaluated using descriptive analyses methods. Although, some facts and figures, as well as sustainable development practices and implementations surrounding the use of market-based GHG reductions approaches could be obtained from publicly available documentation, due to limited information available and in order to obtain additional input from other sources than secondary data interviews were conducted. A semi-structured interview format with an interview guide approach was used. In order to facilitate the analysis and keep the focus of the study, the questions were determined beforehand but kept open ended. This usually allows for a more flexible situational interview (Mikkelsen, 2005). According to the qualitative method, they should have been kept unstructured, whereby general issues were selected before the interviews, leading questions were predetermined but other questions were not. Notes were taken during each phone interview and compiled into a single database (Yin, 2003), and coded accordingly (Bryman, 2004.) Kvale’s (1996) principle ‘the shorter the interview’s question are and the longer interviews answers, the better’ served as a guiding principle for the interviews. Personal phone interviews proved to be an advantageous method in collecting additional data when compared to an e-mail questionnaire (Silverman, 1999). The list of interviewers and the examples of the questions asked is provided in the Annex III and Annex IV accordingly.

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Additionally, the standards’ guidance documents for eight standards and one GHG accounting protocol were reviewed. Only standards applied for the projects identified during the inventory stage were selected for the analysis. Their rationale was analyzed and comparable variables were identified for sustainable development benefits determination.

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1.3.3 LIMITATIONS AND SYSTEM BOUNDARIES

Due to the complex nature and broad regional scope of this topic, it is necessary to clarify the limitations of this research, so as to set some boundaries.

It is, thus, relevant to point out that this study attempts to assess whether VCM projects could contribute to streaming finance for climate change mitigation and adaptation efforts and provide sustainable development benefits in Africa rather than discuss whether they should. Furthermore, the study does not assess actual SD impacts of individual projects, but looks at the development of phenomena as a whole. This study covers only selected offset providers that were identified as involved in voluntary-based project for the moment of conducting a research. Eight standards were chosen based on their presence in the selected region to illustrate the standards followed by voluntary GHG ERs projects. The study does not attempt to cover all the standards employed by the VCM.

Limitations to this research manifested in primary and secondary data

collection and at the analytical stage of the research on the account of non-legally binding voluntary market being vast, non-structured and nascent. Data availability was limited due to the accessibility of projects registries, questionnaire response rates and project developers and operators availability. The study acknowledges that it was not able to obtain complete data on voluntary market-based projects in the region given that the level of cooperation from market actors was rather low. Moreover, the total number of the voluntary project in the region cannot be approximated only based on the total volume of transactions, since the total number of the voluntary-based projects is not publicly available information. This prevents from conclusions on the volume of the market covered by the current study. In terms of regional scope, the study has no intention to address the objectives through evaluating nationally distinct features of the countries of the region, but views the region as sharing common characteristics significant for evaluated phenomena.

Despite these limiting factors, the material collected allows hypothesizing on

general development trends as well as identifying main approaches to sustainable development conceptualization.

1.3.4 Disposition The paper is organized as follows: the next section discusses the theoretical framework of the study. A section 3 that introduces the general institutional structure of carbon markets follows this. Section 4 that describes the data and reveals some preliminary evidence follows it. Section 5, discussing the collected empirical material and presenting the results of the study, succeeds it. The final section concludes.

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2. Theoretical Framework The theoretical starting point as a framework for critical understanding of the phenomena (Silvermann, 1999) for this study originates from the aim to identify the principles of sustainability that the GHGs emissions market mechanisms draw upon. The initial assumption employed for this purpose is that the climate change regime can be best approximated by looking at it through the prism of the sustainability discourse, which represents a strong will of integrating economic, social, institutional and environmental aspects of development (Dryzek, 1997). The study is based on the idea that it is possible to understand some common comprehension and underlying value commitments within the discourse through studying how various actors at play interpret it and what are the dominant narratives that manifested around the issue of sustainable development on the ground. Since 1997 when Dryzek labeled sustainability ‘as a major game when it comes to environmental affairs’, (Dryzek, 1997) it has become even a more broadly accepted way to frame issues related to the environment. Yet it can be also argued that sustainable development became an ideology for the 21st

century as a policy discourse as well as development practice. Climate change regime is no exception. Definitions of sustainability and sustainable development abound. However, they tend to be abstract and thus open to diverging interpretations. Indeed sustainability nowadays is regarded as an overarching concept integrating multiple dimensions and has been extended to indicate a dynamic process entailing associated progresses, among others, in the social, economic, institutional and environmental spheres. Since the notion of sustainable development emerged in the 1980s as a desirable guiding principle for the world community, it has in many cases become a ‘buzzword largely devoid of content’ as Esty notes (cited Elliot. 2004). The present study acknowledges that the aims and meanings of the sustainable development concept in the frame of climate change regime continue to be rather vague and broad. Regardless of all operationalized definitions of sustainability, there is still a room for conceptual division between the stronger and the weaker meaning of it. In this thesis, I will explore the conceptualization of sustainability by adopting discourse analysis as a theoretical framework. As Phillips and Jorgensen (2002) vivid description shows ‘discourse analysis is not to be used as a method of analysis detached from its theoretical and methodological foundation, it is not just a method for data analysis, but a theoretical and methodological whole.’ Thus, I shall turn next to explain how it is understood in the context of the current study. In line with Dryzek’s (1997) interpretation I understand discourses as ‘a shared way of apprehending the world’, ‘embedded in language’, and ‘specific ensembles of ideas, concepts and categorization that are produced, reproduced and transformed in a particular set of practices’ as defined by Hajer (cited Bäckstrand and Lövbrand, 2006).

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Sustainability discourse is formed by a number of concurrent and interacting discourses. There are overlaps and value conflicts, as well as struggle over meaning of phenomena (Bäckstrand and Lövbrand, 2006). While recognizing the variety discourses that encompass and form sustainability discourse, for the purpose of this study, drawing on Dryzek (1997) and Bäckstrand and Lövbrand (2006), I will focus on those sustainability streams that I have judged to be more influential in the climate discourse: sustainable development and ecological modernization discourses. Sustainable development is ‘an integrating discourse’ (Dryzek 1997, p. 121) that seeks to ‘combine ecological protection, economic growth, social justice, and intergenerational equality, not just locally and immediately, but globally and in perpetuity’ (Dryzek 1997, p. 121). Sustainable development, as highlighted by Dryzek (1997, p. 129) stresses ‘nested systems, ranging from the local to global’, thus, seeking to incorporate system perspective to embody integration across level and context. This means in particular that discourse views cooperation and partnership as the opportune approaches to environmental problems, rather than competition, and emphasizes citizen participation, personal development and well-being, including education and growing awareness, and, last but not least, economical growth (Dryzek, 1997, p. 125). Ecological modernization discourse calls for changing political institutions as well, however, unlike sustainable development discourse, it only promotes diminishing the role of the state, instead of stressing the role of partnership between various institutions. However, at the same time the dominant feature of the ecological modernization discourse is reliance on active cooperation between business and other stakeholders. Thus, as Hajer (1995, p. 31) argues, it ‘uses the language of business and conceptualizes environmental pollution as a matter of inefficiency, while operating within the boundaries of cost-effectiveness and administrative efficiency’. It is focused on technological improvements (like, for instance, energy efficiency, renewable energy or material efficiency). Ecological modernization discourse aims to acquire economic and environmental benefits through improvements in technological and economic systems. This means, as noted by Hajer (1996, p. 248), that ‘economic growth and the resolution of ecological problems can be reconciled’. Moreover, ecologically modern discourse is more instrumental than sustainable development discourse and as Dryzek (1997, p. 143) argues it ‘has a much sharper focus than does sustainable development on exactly what needs to be done with the capitalist political economy’. Nevertheless, ecological modernization discourse as a perspective on sustainability is not a homogeneous view. It is a diverse discourse that represents a continuum of strategies between weak and strong ecological modernization (Bäckstrand & Lövbrand, 2006). Basically, the fundamental difference between strategies is a technocratic and neo-liberal view that doesn’t require any fundamental change in current institutions adopted for the weak approach, while strong ecological modernization advocates for greater institutional reflexivity, democratization of environmental policy and a stronger emphasis on the justice dimensions of environmental challenges (Bäckstrand & Lövbrand, 2006). The distinctive features of ‘weak ecological modernization’ and ‘strong’ version are summarized in the Table 1.

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Table 1. Key Elements of Versions of Ecological Modernization Discourses

Strong Ecological Modernization Weak Ecological Modernization Ecological Economical Institutional/Systemic Technological Communicative Instrumental Deliberative democratic Technocratic/ Neo-corporatist International National Diversifying Unitary

Source: based on Christoff (1996) The way this study considered how these three discourses interrelate within

the sustainability discourse is presented in the Figure 2. In my analysis I shall further proceed with identifying elements of various discourses at play when it comes to the phenomena of VCM, seeking to understand the underpinnings of the prevailing interpretations of sustainable development and its contribution to forming the sustainability discourse. However, before doing so, the basic principles and ideas behind carbon finance and functioning of carbon markets have to be explained.

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3. UNDERSTANDING CARBON FINANCE

3.1 ORIGIN OF CARBON MARKETS The international community is facing the challenge of establishing an effective and meaningful climate regime to address the most severe environmental threat in human history. Carbon finance is one of the market-based mechanisms designed to respond to the challenge of changing climate. The underlying principles and concepts of economic instruments for creation of markets for environmental assets originate from a logic of cost-effectiveness and, therefore, the markets are designed to ensure that emissions reductions are achieved at the lesser cost for society. The basic idea in the ecological modernization discourse is that incorporation of full cost of environmental services into economy will secure growth through ‘green economy’ and will generate wealth needed to achieve sustainability goals: eliminating poverty, tackling environmental hazards and stabilizing economy (Grist, 2008). Thus, undervaluation of carbon cost is the reason why the perceived immediate needs of economic growth still overweigh the need to restrict GHG emissions. The ‘invisible hand’ of the market has neglected so far to account indirect cost of carbon emissions. It undervalues environmental goods and services, and favors the near term gain over the long-term sustainability, demonstrating no concern for future generations. According to the market logic, if the externality has no monetary value there is no economic incentive to minimize the ‘external’ costs of pollution. On that account, to compensate for the market failure, an economic incentive for emissions reduction must be put in place. Hence, setting up a pricing regime, i.e. establishing rights or permits to pollute the atmosphere is a market response to the risk posed by climate change. Market approaches are often perceived and positioned as an alternative approach to public regulation and to cooperative approaches. Although as for the established carbon market within climate regime these mechanisms often work in combination. Bäckstrand and Lövbrand (2006) had argued that Kyoto Protocol and market mechanism is an evidence of ecological modernization discourse prominence as an approach to tackle climate change. According to them the weaker version of ecological modernization dominates current climate regime debate (Bäckstrand and Lövbrand, 2006). Flexible mechanisms of Kyoto protocol and voluntary schemes likewise rest on the Coasian solution for the tragedy of the commons, which advocates for creation of property rights for the commons, whether private, state or collective and trade of the resulting property rights (Turner et al., 1993). Potentially harmful consequences of economic activities on the environment constitute an externality, ‘an economically significant effect of an activity, the consequences of which are borne by a party or parties other than the party that controls the externality producing activity’ (Turner et

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al., 1993). The GHG emissions are a model example of negative externalities, explained by the negative impacts of production and consumption activities that are not directly reflected in the market price (Pindyck et al., 2001). Anthropogenic GHG are the externalities of economic growth and climate change consequently appears to have arisen from, as Stern review calls it, ‘the greatest market failure the world has seen’ (Stern 2006). From the economic perspective adopted for GHG offsetting practices, the issue of externalities can be addressed through command-and-control regulation, quantity-oriented market approaches, tax- or price-based regimes, or combination of all three approaches (Hepburn, 2007; Liverman and Boyd, 2008, Nordhaus, 2006). The weak version of ecological modernization shares this economic-centered view on GHG emissions. Meanwhile a wide range of scholars have raised the issues of true values of nature, problems of global inequality and inherited undemocratic nature of private ownership to manage nature among others within GHG emission market mechanisms (Liverman, 2008). Detractors of the market approach have argued that the flexible mechanisms commoditize atmosphere in a manner that allows dubious projects and the exchange of “hot air” and impede the fundamental structural change required. The opponents of market-based approaches argue that the cost and pricing of carbon is controversial. EU ETS that had almost collapsed recently is the evidence that demonstrated how present carbon market lacks transparency, homogeneity and atomicity and access to accurate information to allow all participants to make well-informed decisions, thus, contributing to unequal distribution of potential carbon trade benefits. In general, the effectiveness of market regulation can be challenged due to the inherent imperfections of the market, which functions efficiently only under perfect conditions. These arguments represent strong ecological modernization views on GHG emission markets.

3.2 CARBON MARKETS BASICS

In order to consider the effects of voluntary offsets in the region of Sub-Saharan Africa, it is useful to look at, first, how carbon finance regime is structured and what drives market demands and, secondly, how compliance and voluntary markets relate. The following section provides a brief introduction to market mechanisms and discusses the specifics of carbon market development in the region.

The term ‘carbon market’ refers to the trading of emission permits that have been either distributed by a regulatory body or generated through GHG emissions reduction or carbon sequestration projects (Bayon et al., 2008). The constant growth of the market has been recorded since the market-mechanism was introduces (WB, 2008; Ecosystem Marketplace 2008). In 2008 CDM accounted for 1,600 MtCO2e and VCM for 105 accordingly, while the remaining was split among other mechanisms (WB, 2008; Ecosystem Marketplace, 2008). Two key building elements of carbon markets are cap and trade schemes and project-based mechanisms. The regulatory-driven emissions markets are created through cap- and trade schemes. The quantity of emissions that market participants

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are permitted to release is defined or capped by the regulatory authority, which also assigns an amount of tradable allowance units equal to the cap. Actors who reduce their emissions beyond required levels can sell unused allowances to other participants of the market who did not meet emissions quotas assigned to them (Bayon et al., 2008). Actors who aim to reduce the system’s total environmental impact can purchase, and retire, meaning no longer trade, tradable allowance units (Bayon et al., 2008). Most of existing or proposed cap and trade schemes allow participants to meet their emission reductions targets through purchasing carbon credits originating from projects in sectors or regions not covered by the cap and trade scheme.

The greenhouse gases emissions market that has expanded over the last decade is divided into compliance and voluntary markets. The compliance market organized under the regulations of the Kyoto Protocol and the Marrakech accords to the UNFCCC includes three financial mechanisms: carbon trading, Joint Implementation and Clean Development Mechanism. The Kyoto Protocol’s Clean Development Mechanism was initially envisioned as the mechanism that would connect carbon finance and sustainable development objectives in developing countries. CDM has emerged as an instrument that aims to attract new financing opportunities for sustainable development in the developing world while assisting developed countries to meet their emissions targets to avert the effects of climate change (Fenhann, et. al, 2004). The basic idea of CDM is simple: developed countries can invest in abatement opportunities in developing countries where costs may be lower and receive credits for resulting emission reductions (Fenhann, et al., 2004). From a global climate perspective, it does not matter where mitigation activities are carried out. This could reduce the need for developed countries to invest in more expensive mitigation projects domestically (Fenhann, et al., 2004).

The compliance market (namely CDM and JI) and voluntary carbon market are

essentially parallel markets operating under the same conceptual basis, but with divergent regulating structures. However, the voluntary market, as a less formalized platform for carbon transactions, is rather a complimentary than alternative carbon market that in fact predates Kyoto-based mechanisms. Moreover, the regulated and voluntary markets complementary in some areas and overlapping in others. Thus, credits generated by compliance project-based mechanism (both CERs and ERUs) as well as Voluntary/Verified Emission Reductions (VERs) can be sold in the voluntary market. It also covers the areas not addressed by CDM enabling low-income communities and underrepresented regions to participate in carbon markets, providing more flexibility for channeling private investment into projects benefiting ‘carbon smart-development’. The voluntary market does not operate under a universal cap and trade scheme and most carbon credits purchased are project-based transactions (Bayon et al., 2008). In both the regulatory and voluntary markets, GHG emission reductions are traded in carbon credits, which represent the actual reduction of GHG equal to one metric ton of carbon dioxide (tCO2eq), the most common GHG. Carbon credits are the result of a specific project aimed at emissions reduction or carbon sequestration.

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The global warming potential of each gas is determined in terms of its equivalent in tons of carbon over the course of 100 years (Bayon et al., 2008).

3.3 VOLUNTARY MARKET

The voluntary market has grown in response to the increased demand for carbon credits outside the Kyoto Protocol compliance market and is more informal than the compliance one. The volume and value of credits traded on the voluntary market is far smaller than in the compliance market of the Kyoto Protocol. Even though VCMs represent a small proportion of the carbon market as a whole it is a rapidly growing market. Similarly to the compliance schemes, there are two types of transactions in the voluntary market: allowance-based and project-based transactions. The over-the-counter (OTC) market constitutes the largest portion of the voluntary market. All carbon credits purchased under OTC scheme are project-based transactions (Bayon et al., 2008). The smaller portion of the market represented by allowance-based transactions is covered by the national cap and trade developing schemes such as Chicago Climate Exchange (CCX) or Japanese Voluntary Emissions Trading Scheme (JVETS), for instance. Allowance-based sector of the VCM is not covered by the present study.

Figure 3. Carbon Markets Volume of Transactions in 2007, 2008. Source: adapted by author from Ecosystem Marketplace, New Carbon Finance, Point Carbon,

World Bank. Ecosystem Marketplace (2008) report estimates that the entire OTC market

transacted 42.1 million tCO2e at a market value of US$258.4 million in 2007, up from 2006 transaction volumes and market value of 14.2 million tCO2e and US$58.5 million, accordingly. The compliance markets also have experienced much higher transaction volumes and market value compared to the previous periods, however, in the past years OTC markets are experiencing faster growth (194%) than regulatory markets (77%) (Ecosystem Marketplace, 2008). In 2007 OTC market experienced the tripling of transactions and the trends continued for the 2008 (Ecosystem Marketplace, 2008). Thus, most of the analysis and debate to date have assumed that demand for carbon offsets will be high (Wara & Victor, 2008) and therefore developing countries that host such projects will necessarily earn useful revenues. At

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the same time as the downward trend of voluntary carbon prices and transacted volumes during January and February 2009 signifies, the OTC segment is to be affected the most by the financial downturn (New Carbon Finance, 2009). The consumer and voluntary nature of the demand that drives the market can explain it.

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3.3.1 REGULATORY CONTEXT

Unlike the compliance market, the voluntary schemes do not rely on legally mandated reductions (Bayon et al., 2008). There is no emissions cap to drive carbon credit demand, and no regulatory body attempts to unify VERs across project types, standards, prices, or transaction volumes. The voluntary market governance system is more horizontal and networked; with no central formalized regulation. The lack of standards, deficit of uniformity and transparency in the voluntary market has led to skepticism regarding credibility of the offsets produced under the voluntary offsetting schemes (Harris, 2007; Taiyab, 2006). In order to address the criticism and ‘to make market more investor-friendly’ (Bayon et al., 2008) stakeholders involved in the sector introduced over a dozen of voluntary offset standards in the past few years, designed registries and attempted to document the size of the market. There are several voluntary standards adopted so far, including the Gold Standard, which provides guidelines on sustainable development among other aspects for the CDM under Kyoto Protocol and has a parallel scheme for the voluntary market. Implementation of self-imposed standards represents a form of self-regulation as opposed to compliance market and is under development at the moment. Several studies that cover various features of standards are available (Kolmuss et al., 2008a; Kolmuss et al., 2008b; Merger, 2008). This study only considers standards applied for identified projects in the region of Sub-Saharan Africa.

3.3.2 SUPPLY, DEMAND AND ACTORS

The voluntary segment of the market is currently operated by a number of

business companies and non-profit organizations in North America and Europe (Harris, 2007; Sterk & Bunse 2004). Those companies invest in carbon-reduction projects both in industrialized and developing countries and sell the emissions credits to buyers and final consumers in the industrialized ones. The voluntary market represents purchases of carbon credits by organizations or individuals who are not legally obliged to generate any emissions reductions, or those, willing to have emission reductions above what is legally required. Therefore, being under no legal constraints governing the kind of emission offsets that they purchase, they can be flexible in deciding on the type of carbon credits they buy, source of credits or amount of credits. VCM, which is not limited by 2012 timeframe, when the Kyoto protocol expires, might be more appealing to private funds that try to avoid uncertainty of post-Kyoto regime.

Generally, the VCM is driven by consumer demand (Bayon et. al., 2008; Harris, 2007; Ecosystem Marketplace, 2007, Taiyab, 2006). Nature of the demand on VCM differs from compliance market, as purchasers are interested in projects that respond to the goals of their CSR programs or individual values (Ecosystem Marketplace, 2007). Consequently, the offsets provided through the voluntary schemes are rather driven by CSR concerns or individual intentions to reduce personal footprint, rather than necessity driven and highly dependent on consumer

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preferences. This aspect of VCM projects is an interesting counterpart to CDM projects. Investors committing to the emission reduction with the goal of benefiting their CSR programs tend to avoid large projects involving questionable technologies, like large dams or HCF-23 destruction projects and require more qualitative emission reduction credits (WB, 2008). The World Bank (2008) reports that sustainable development concerns and demand for emission credits with stronger co-benefit outcomes are greater amongst private sector investors than public sector entities. Private sector investment is driven by the need to demonstrate to shareholders and final consumers stronger sustainability outcomes. Another interesting aspect is that against the common opinion that the very nature of the voluntary markets stimulates investment in innovative and uncommon for compliance mechanisms approaches (Harris, 2007), voluntary credits buyers tend to purchase offsets that most closely resemble those of the compliance market (Ecosystem Marketplace, 2008). Carbon offsets generated by voluntary projects are referred to as VERs3 and are eligible for carbon credits in voluntary markets. Due to the unregulated and fragmented nature of the VCM, VERs sources are diverse and embrace a vast array of project types, including renewable energy, energy efficiency, agriculture, forestry and other land use (AFOLU) activities, methane capture, and geological sequestration. A major difference between the Kyoto market and the voluntary carbon market is that ex-ante credits can be generated in the voluntary market. In contrast to ex-post credits, ex-ante credits account for the future biological CO2-fixation.

On the demand side, the majority of buyers are businesses in the USA and the EU (including final purchasers, intermediaries, aggregators and investors), with additional demand from the public and NGO sectors, and from individuals (Bayon et al., 2008). VCM creates opportunities for wider engagement of various actors into carbon market. On the supply side VCM can reach project types and regions that are at the moment outside the scope of compliance market. It also allows private sector to purse more diverse projects, creating room for innovation and is attractive in the areas where high transaction costs or other factors impede project development (Bayon et al., 2008).

With respect to the opportunities VCM market offers to Sub-Saharan Africa, a

slightly higher proportion of credits sourced from Africa has been recorded: 6% vs. 3% for CDM projects (Ecosystem Marketplace, 2007). In 2007 if compared to 2006, the percentage of projects sourced in Africa declined both in market share (6% to 2%) and, which is more important, in absolute terms (Ecosystem Marketplace, 2007).

However, the advantages offered by VCM can similarly turn into the drawbacks. Lack of transparency, absence of unified standard procedures, unclear

3 The use of professional jargon can make understanding of voluntary market principles a tricky exercise. Therefore, it is important to clarify terms and definitions used in the paper. Terms such as ‘emission reductions’, ‘voluntary emission reductions’, ‘verified emission reductions’, ‘offsets’, ‘offset credits’, ‘voluntary carbon units’ and ‘verified carbon units’ are used almost synonymously in the literature. However, there are differences in the application and meaning of these terms. The term VER is used for the purpose o this study. Verified Emission Reductions (VERs): A unit of GHG emission reduction that has been verified by an independent auditor. This designates emission reductions units that are traded on the voluntary market (Bayon et al., 2008).

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baseline calculations procedures and methodologies, issues of additionality, leakage and efficiency in the emissions reductions achieved, as well as risk management are often named as factors that may restrain participation of market actors aiming to invest in projects delivering ‘high-quality” ERs. Furthermore, as the current economic decline has clearly demonstrated, the expensive credits from the projects providing additional environmental benefits or designed to benefit the living standards of communities in developing countries are the most affected by recession, with the amount of sales of credits plummeting 70% during the first two months of 2009 compared with the last two months of 2008, according to the environmental research firm New Energy Finance (2009). This indicates the risk of reliance on VERs as a source of sustainable development finance, due to the unstable demand and price volatility, as well as the political uncertainties about the future of carbon offsets.

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4. EMPIRICAL FINDINGS Before I turn to evaluating conceptualizations of sustainable development, I will devote some attention to assess and explain characteristic attributes of voluntary GHG emissions market in Sub-Saharan Africa as revealed by this study. Without going into details about findings for each of the independent projects, I will highlight the most significant details and will comment on established trends.

4.1 VOLUNTARY MARKET DEVELOPMENT TRENDS IN SUB-SAHARAN AFRICA The present study identified 68 voluntary market-based projects (Annex V). It covers projects in progress, in pipeline and under development (Figure 4). The projects are located in 21 country of the region, with a largest number of 13 located in South Africa4. 15 projects are located in Kenya, Tanzania or Uganda, indicating East Africa as another attractive destination for investment. Madagascar hosts 6 projects.

4.1.1 GEOGRAPHICAL DISTRIBUTION

In terms of geographical distribution majority of the projects (76%) are located in the countries hosting CDM projects as well. Only 16 cases were identified to be located in the countries other than for CDM projects. Currently, there are few grounds to call VCM complimentary to CDM with regards to geographical distribution in relation to

studied region. According to the survey responses, the projects located in Sub-Saharan Africa are appealing to the project developers due to the unique opportunities the location provides. As put by one of the interviewees: “ African region offers the whole spin of benefits. Additionally to green house gases removals it offers co-benefits we will not be able to find here in UK” (PC, 2009a).

4 While this study acknowledges that South Africa differs significantly from the majority of other countries in the region with respect to economical, political and institutional conditions, for the simplification of analysis it includes it in the studied region.

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Furthermore, motivation for pursuing the project in the region can be attributed to the type of project developer. As stated by another survey participant the reason for developing projects in Africa is that “this is where the greatest needs are” (PC, 2009c). It is also seen as a disadvantaged region where “there is less access [to electricity], more restrictions and more needs” (PC, 2009c). Therefore it can be claimed that this type of project developers are driven by the “do good” reasons. Equally the same reasons of greater need make Sub-Saharan Africa an attractive destination for the private company’s investments for their CSR programs purposes. Additionally, selection of individual countries might relate to the previous business connections as in case of FACE Foundation project (PC, 2009b). Thus, this means that the region is attractive for project developers looking specifically for other benefits, but not only GHG reductions.

Figure 5. Projects Distribution by Country. Source: devised by author based on own inventory. According to the survey responses the majority of the projects were deliberately developed for the voluntary market, while only 4 projects were claimed to aim for CDM initially. As survey respondents could select more than one option or “benefit” when explaining the selection of VCM approach, the results presented by the Figure 6 are the share of each option compared to the whole sample. The flexibility of the VCM mechanism, as well as the project

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size, was mentioned as major factors determining approach preference. According to the interview results VCM schemes in the context of Sub-Saharan African countries are ‘more relevant’ (PC, 2009b) and ‘softer when it comes to business, without reliance on strict regulation’ (PC, 2009c) while CDM provides more guarantees (PC, 2009b). It is also seen as a more suitable approach for small-scale projects (PC, 2009c). Moreover, 24% of responses indicate the low transaction cost of voluntary market mechanisms as an advantageous factor. However, in most of the cases respondents who mention low transaction cost among the reason of selecting voluntary approach do not apply any standard at all or apply the low-priced option. Besides that investors and project developers preferences are linked to the types of projects that Sub-Saharan Africa has to offer.

4.1.2 PROJECT TYPES

Africa, unlike Asia that dominates compliance market at present, has few industrial carbon credits to deal in, whereas it is recognized as a potentially significant source of land use, land use change, and forestry credits (WB, 2008). LULUCF5 is the area where Africa’s comparative advantage lies in the carbon markets (Ecosystem Marketplace, 2008; WB, 2008). Moreover, while the new forestry regime is being debated, the voluntary OTC markets are currently the only source of carbon finance for avoided deforestation.

In general VCM has a higher proportion of forestry credits out of total market transactions if compared to CDM (36% vs. 1% for CDM). Taking into account ecological conditions and the structure of economy in the region, it could be expected that most of the projects are constituted by LULUCF type of projects. However, based

on the current study inventory, it is only the second largest project type. 43% of the projects are covered by energy efficiency projects, with the majority aiming at domestic energy efficiency improvements and represented by various types of

improved/efficient cook stoves projects and a few lighting efficiency

5 LULUCF a greenhouse gas inventory sector that covers emissions and removals of green house gases resulting from direct human-induced land use, land-use change and forestry activities (UNFCCC, 2009).

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improvement projects. These kinds of projects, as well as forestry projects, have a strong community-based component. The amount of ERs projects claim varies tremendously from 0-200 tCO2eq generated annually to 6 mln tCO2eq generated during the project life-time. ERs volumes from energy efficiency projects are small, while volumes of ERs coming from afforestation/reforestation activities are significantly larger. Although, it is hard to draw a comparison between the project sizes and ERs volumes generated, since the credit providers apply different time-lines and there is no possibility to compare the scale based on the volumes of ERs claimed, the forestry-based project outnumber energy efficiency ones in the amount of ERs generated.

Nevertheless, an important conclusion here is that possibility to invest in projects that appeal to values of the final buyer is an important driver in the development of the market. As said by the president of Wildlife Works, on the occasion of launching the first REDD6 offset project under the Voluntary Carbon Standard in Kenya: "If you had a choice between carbon credits generated when a commercial factory pig farm reduces its toxic methane emissions, or carbon credits from a threatened natural forest that brings with them protection of elephants, lions, cheetah, giraffe and 54 other large mammal species which one would you prefer?” (Mike Korchinsky, 2009). Afforestation/Reforestation projects, differing in scale and in amount of emission reductions they claim to deliver, range from tree planting by two local school groups in Northern Namibia to several thousands hectare plantation program under the reforestation projects in Kibale National Park and Mountain Elgon in Uganda. There is evidence that carbon sequestration projects are designed with an aim to provide necessary financial assistance for forestry conservation in Africa. VERs generation for the majority of projects of this type is rather seen as a source for generating additional financial flows for the restoration or conservation activities than a primary aim. This signifies that such kind of projects can be an example of investment for sustainable development. However, one should be very accurate in claiming their contribution to local sustainable development for that reason that while contributing to environmental dimension of sustainability, they might pose a threat to other aspects of local sustainability7. Renewable Energy Projects vary from Mad'Eole 1.2 MW wind energy plant in Northern Madagascar and small-scale hydropower installation in Zambia to

6 Reducing Emissions from Deforestation and Degradation (REDD) is a mitigation mechanism for developing countries under UNFCCC. 7 Thus, for instance, reforestation project in Kibale National Park in Western Uganda has started in 1996 as collaboration between the Uganda Wildlife Authority and FACE Foundation (Netherlands). To date 415 hectares of forest have been planted. In 1998 Climate Care has joined the project, assisting in provision of carbon finance through trading VERs. However, the project has a record of violation of indigenous peoples rights. (Lang & Byakola, 2006). The people indigenous to Mount Elgon have been evicted as a result of project activities. SGS's Public Summary acknowledges that in order for the UWA-FACE project to continue, more evictions will have to be carried out. This questions the overall sustainability of the project

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community-based Microsolar Lighting project for Malawi, and providing water solar heating for the local community in Eritrea. This category of projects also includes projects providing solar-powered cook stoves for communities. These projects provide attractive environmentally sound technology options for electricity industry, however, the scale gives little grounds to talk about significant investment in renewable energy sector. The projects aim to utilize locally available resources and expertise, like for instance Jatropha oil project in Mali as well as create employment opportunities. Yet renewable energy projects require significant investment at the initial stage and expertise, their project development stage is time-consuming and, thus from this perspective they are less attractive for the investors. It has to be mentioned though, that these types of projects have a strong emphasis on social component of development.

4.1.3 ACTORS Projects generating GHG ERs are developed in various ways, but the general

scheme is the following: project idea is generated, carbon finance is acquired, project activities performed, resulting emissions verified according to one of the standards to generate carbon credits, carbon credits are sold to retailer or final buyer.

Deals may be as simple as mutually agreed upon credit transactions between

project developers, who own the credits and intermediate or final purchasers. However, the process often involves multiple actors including project developers, verifiers, aggregators/wholesalers who typically deal with bulk transactions, retailers who generally sell small amounts to final consumers represented by individuals or organizations, and brokers who facilitate transactions between sellers, buyers and other intermediaries. Credits are usually traded not through the exchange, but directly from the project developer or reseller webpage or can be purchased on eBay, for instance.

Project developers include local businesses, non-profit organizations, local NGOs and international NGOs (Figure 7). Project operators include local private companies, local governments, and international non-profit organizations, local and international NGOs. The most common pattern followed by the dominating majority of the project involves foreign project developers, who also seek to attract finance for the project activities and ensure that the credits are verified. In 12 cases project developer operates project in cooperation with local partner (private company, NGO, research or governmental institution). Local and industrialized country governments may also act as project partners (for instance, German Ministry of Environment, Eritrean Ministry of Energy and Mines) as well as local and foreign research institutions.

Finance for project activities comes from private investment (either from not-for

profit or private business) and financial resources generated through VERs trade. Quite often project developer acts as project finance provider. Evidence of requirements for financial additionally of the projects, can be observed for the majority of the projects, however, the requirements differ depending on the type of

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project developer. As stated by co2balance, for instance, the company only invests in projects that are at least 50% funded by carbon-offset payments (2009).

Generated ERs and co-benefits are subject to the third party verification in the

majority of cases. Projects are validated by UN-accredited monitoring agencies such as the SGS, TÜV or DNV or one of the voluntary standards or independent experts8. A participatory methodology on carbon assessment and monitoring program by local communities has been established within one of the projects. Corporate and individual buyers (PC, 2009b), social institutions, governmental agencies, retailers and credit aggregators purchase the credits.

Local communities act as service providers generating carbon credits through

projects and in a few cases as credit owners.

Credits in the

majority of cases studied are owned either by the international private company, NGO or non-profit who act as a project developer or retailer. A local private company was identified as 100% owner of the generated carbon credits in a single case of Tanzania Carbon project only. There has been one identified case of community owned business in a form of established micro-enterprise. Only in a few projects local communities receive direct payments originating from their project-related activities. For instance, TIST program in Kenya, Tanzania and Uganda, ensures quarterly payments to the farmers on the basis of the number of trees they manage. Monduli Forest Project in Tanzania also ensures direct payments to the communities. Such ownership model can be attributed to the relatively early stage of market development in the region. It is seen as a necessity for upfront investment, however, there are few cases indicating the early transition to the local ownership approach. Thus, for instance, co2balance, a UK-based project developer and credit owner, is currently working on establishment of micro-franchise model in Tanzania and Kenya, ensuring that carbon credits generated reward direct beneficiaries (PC, 2009a). Another example of project benefits distribution is community trust fund finance established to develop infrastructure in the community, such as schools and health posts establishment in Mozambique. Likewise, there are precedents of trust

8 There are few examples of verification accomplished by the independent panel of experts. In the case of Eritrea Efficient Wood Stoves Project (Climate Mundi) verification of reductions is done by Berkley Laboratory, projects developed by Blue Venture rely on TICOS independent verification and management service and are example of in-house verification.

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funds establishment to channel funds from the sale of carbon offsets to individual farmers, so they act as direct beneficiaries.

In terms of property rights and land tenure, there are only few cases indicating

inclination to address the issue, through ensuring robust legal tenure for the local communities, which results in project benefits distribution in the community.

4.1.4 CHALLENGES AND BARRIERS Marginal participation of Sub-Saharan Africa in the carbon markets is often seen as a consequence of a market mechanism with carbon savings as the prime mover, which attracts private capital to the projects areas where the investment risk is the lowest and regulatory stability and implementation capacity are the greatest. In addition, transactions cost per unit of VERs are considered to be higher for the smaller projects common for the region. However, there was no strong evidence found confirming this assumption. Only one survey respondent mentioned high transaction cost as a barrier in project development. Another respondent identified the lack of knowledge on operation of VCM in the region as a barrier, while the others claimed that there are no specific challenges they are facing in project implementation that can be attributed to the regional conditions. In a contrast to the various challenges CDM is facing in the region this apparent non-existence of barriers9 should suggest favoring VCM approaches in the region. However, the difficulties in obtaining initial investment are the defining factor in project development. High transaction cost pose difficult task for local project developers and result in a need for intermediaries. The price based on project location as reported by Ecosystem Marketplace (2008) survey for the VER sourced from Africa lie in the mid-range. However, the price depends on the project size and the credits sourced from the larger projects are cheaper in general for VCM projects as well (Ecosystem Marketplace, 2008). There is also a significant difference between the standards applied for projects: VERs generated by projects verified according to GS are more expensive than the ones that do not apply any standards. However, the price of VERs generated by projects located in Africa, should neither be seen as impeding projects development in the region.

4.2 CONCEPTUALIZING SUSTAINABLE DEVELOPMENT

The next section will illustrate how sustainable development is conceptualized by a number of voluntary standards and discuss how market actors interpret it, calling on the survey and interviews conducted, and project documents examined. Having differing discourses and elements that constitute them in mind, I shall discuss how project developers and operators frame ‘sustainable development’. 9 As perceived by the respondents.

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Determining narratives employed by the actors and observing how agents in the field interpret the term is highly relevant for the exploration of the meaning of definition. The fundamental dimensions of the sustainable development concept and the varying interpretations of the criteria and indicators of sustainable development can be identified within the carbon markets on the projects level. It has to be emphasized, however, that regardless of what definition of sustainable development stakeholders stated they apply or how they define co-benefits, this does not necessarily mean that it translates into the project activities or is being applied in the uniformed way, even by the same project developer but in different projects. First, I will evaluate the meaning assigned to sustainable development concept by taking a closer look at the findings related to respondents’ proclaimed organizational values and interpretation of the concept.

4.2.1 A STAKEHOLDER’S PERSPECTIVE While 27% of survey respondents perceive sustainable development benefits as more important than GHG ERs delivered, 73% accordingly, consider both ERs and co-benefits provided by the project to be of the same importance. This means that co-benefits are perceived as crucial to project development. In the survey of project developers, most respondents stated that they base their definition of sustainable development contribution on how it is defined by the standard, host country requirements were also referred to as the guiding principles for defining sustainable development framework for the project, while one respondent identified the ‘core goal of the project’ as determining potential contribution to sustainable development. Since discourse analysis places a great emphasis on language, it is interesting to see that, even though respondents refer to sustainable development as ‘essential part’ (PC, 2009c) of their project activities, however, when asked they are unable to define what constitutes sustainable development in their activities. ‘We have no definition of sustainable development or sustainable approach’, stated one of the interviewees, while still referring to the company performance, as ‘we are sustainable’ (PC, 2009b). They go on acknowledging, that at the initial stage of the project activities criteria for co-benefits ‘were very broadly defined and no explicit criteria is applied at the moment’ (PC, 2009b) and projects are, accordingly, expected ‘to be sufficient, sustainable and bring social benefits’ (PC, 2009b). The majority of project developers refer to ‘contribution to sustainable development’ in very general terms. Thus, for instance Swiss offset provider My Climate claims that all their ‘carbon offset projects are required to make a positive contribution to sustainable development in their respective regions’ (My Climate, 2009). They declare that ‘all three dimensions of sustainability – environment, economy and society - need to be taken into account’ (My Climate, 2009). However, they leave criteria definition for the standard applied. One responded, while emphasizing the social benefits and community focus of the project, mentioned that the company looks ‘for the projects that offer something more than triple-bottom line

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approach’10 (PC, 2009b). This indicates a strong social emphasis of many VCM-based projects, when compared to the corporate nature of CDM. In a number of cases ‘sustainable project’ means rather a financial sustainability, than providing sustainable development benefits in its Brundtland or any other connotation. The same respondent stated that along with ‘economic benefits’ the investment brought by the project has ‘a large influence on the region’ and sustainability is ensured through ‘continuity’ by establishing nurseries and involving local community (PC, 2009b). That being said so; it might be assumed that the temporal aspect is indirectly acknowledged as a contributing factor to sustainability of the project. While discussing the criteria employed for defining sustainable development benefits provided by the projects, respondents were referring to the host country requirements and requirements provided by the standard applied, including SD matrix provided by GS (PC, 2009a). Similar results were obtained with regards of sustainable development assessment; however, very few projects were described as conducting any assessment of sustainable development. In cases when it was accomplished, assessment was performed based on the guidelines provided by standards. One of the respondents claimed ‘an ongoing monitoring and surveys by entrepreneurs on the ground’ to be employed as an assessment tool. One respondent reported regular stakeholder consultations as an assessment tool. Two respondents stated that sustainable development benefits are not assessed. While discussing other than emission reduction benefits respondents refer to them as ‘additional benefits’ or ‘co-benefits’ which are constructed through the following categories as ‘created employment’, ‘development of local business’, ‘bringing electricity to underprivileged’, ‘improved air quality’, ‘better health’, ‘biodiversity conservation’. It is clear that the meaning of sustainable development is constructed through the concept of benefits. The elements constituting both WEMD and SEMD are witnessed in conceptualizations by project developers and operators. However, strong emphasis on technological solution in framing of VCM-based projects in developing countries of Sub-Saharan Africa signifies the prevalence of the later.

4.2.2 A STANDARD’S PERSPECTIVE As respondents and interviewees emphasized the importance of standards in framing the sustainable development concept, I shall turn now to how standards conceptualize sustainable development and its benefits. The following section presents the results of discourse analysis application to the guiding documents of 8 standards utilized for the projects included in the study inventory. The standard

10 Triple bottom line approach is a corporate approach to sustainability and as, John Elkington who originated the concept defined it is "(at) the heart of the emerging value creation concept is a recognition that for a company to prosper over the long term, it must continuously meet society's needs for goods and services without destroying natural or social capital" (cited in Norman & McDonald, 2003).

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documents where analyzed with an aim to identify key elements of the discourses. I will conclude by placing standard under one sustainability discourse or the other.

SGS, KPMG and ICROA procedures are not covered by the current analysis, since the projects that used to employ these procedures are in the transition to one of the standards described below. Forestry Stewardship Council (FSC) principles are applied for 5 projects by Prima Klima, who doesn’t follow the Kyoto Carbon accounting rules and applies its own catalogue of criteria to finance projects. FSC is not a standard for certification of GHG emission reductions in the voluntary market; therefore it is not a subject of the analysis for the present study. VCS, VER+ and WBCSD/WRI CHG Protocol Initiative focus on GHG reduction only and do not require projects to have additional environmental or social benefits. Accordingly, neither sustainable development impact nor co-benefits are defined. Due to this reason they were not included in the discourse analysis but are considered to be coming from WEMD, with a strong focus only on cost-efficiency in delivering GHG ERs. Independent verification of GHG emission reduction in most of identified cases was accomplished by a third party (an external auditing company like KPMG or SGS) or by a panel of experts invited and approved by a project developer as in case with TIST and TICOS. Sustainable development or sustainability benefits are not defined. However, community’s development is considered to be important for project approval. Nevertheless, experts do not verify the benefits, but only GHG reductions. It was not possible to identify elements constituting any sustainability discourse. Thus, this type of verification is not classified by this study.

Figure 9. Projects Distribution by Standard. Source: devised by author based on own inventory.

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Five standards out of 11 applied were judged to address sustainable development or its aspects. The results of analysis are summarized in the Table 2 and discussed below.

Source: devised by author based on own analysis. The Gold Standard is the only one standard that has a definition of sustainable development. The Gold Standard refers to the definition of sustainable development as set out by the Brundtland report (GS, 2008): ‘development that meets the needs of the present without compromising the ability of future generations to meet their own needs’. Projects aiming for GS crediting must show clear sustainable development co-benefits (GS, 2008). It emphasizes the responsibility of project developers to assist sustainable development based on the standard requirements, at the same time leaving room for defining sustainable development aspects to be included in the assessment. ‘Do no harm’ approach serves as guiding principle for sustainability assessment under Gold Standard. It refers to the Millennium Development Goals, safeguarding principles of the UNDP as leading the assessment. (GS, 2008; UNDP, 2009) Guiding questions for ‘do no harm assessment’ are provided by the standard and cover issues

VGS Plan Vivo Carbon Fix CNP CCBS

SEMDECOLOGICALINSTITUTIONAL/SYSTEMIC

COMMUNICATIVE

DEMOCRATIC

INTERNATIONAL

DIVERSIFYING

WEMDECONOMICAL

TECHOLOGICAL

INSTRUMENTAL

TECHNOCRATIC

NATIONAL

UNITARY

SDDSYSTEMS PERSPECTIVEON 3 PILLARS

SOCIAL JUSTICEINTER- AND INTRA-GENERATIONAL EQUITYCOOPERATION/PARTNERSHIP

HUMAN DEVELOPMENT

EDUCATION

NESTED SYSTEMS/LOCAL/GLOBAL

SD DEFINITION

no definition,but providescriteria

no definition,but providesguidelines

no definition,but providesguidelines

Table 2. Elements of Sustainability Discourses Covered by Standards.

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of human rights, uniqueness of indigenous people, involuntary resettlement, cultural heritage, freedoms of associations and rights to collective bargaining of employees, forced or compulsory labor, child labor, any sort of discrimination, work environments, precautionary approach, conversion or degradation of critical natural habitats and corruption (GS, 2008). The GS sustainability matrix serves as guidance for project developers and includes a set of 12 indicators that cover three dimensions of SD: environment, social development, economic and technological development (GS, 2008). Stakeholder participation and EIA are required. As one can see from the summary of the results presented in the Table 2 the elements constituting two discourses can be seen in a way GS frames sustainable development. It scores the most under SDD, and covers the elements that SEMD and SDD share. However in its nature it is instrumental, since it is rather based on idea of cost-effectiveness and other aspect serves the purpose of cost-effectiveness. Impact assessment can be considered a good example of its instrumental approach towards sustainability. SD impact is evaluated based on a sum of ‘positive, neutral, and negative impacts’ and the project has to contribute positively at least to two categories and can be neutral to the third one to be judged as beneficial for sustainable development In this way it allows a certain trade-off and can not be consider ed to have truly systems perspective view. Thus, I have categorized it as belonging to the SEMD. However, there is no evidence of truly system perspective essential for sustainable development discourse.

Likewise, Plan Vivo demonstrates elements of both SDD and SEMD and has a very strong emphasizes on delivering community benefits. Plan Vivo address the issue of land tenure and user right and implicitly emphasizes, that they must be secure ‘so that there can be clear ownership, traceability and accountability for carbon reduction or sequestration benefits’ (Plan Vivo, 2008). Plan Vivo Certificates can only be generated through activities where communities or individuals have ownership of the carbon credits, therefore, the community participation is seen as key at all project stages (Plan Vivo, 2008). Plan Vivo provides list of standards and indicators that projects must employ to provide evidence of positive environmental and community benefits through a participatory community approach (Plan Vivo, 2008). Therefore, based on these factors among others I classified it as sharing the views of SEMD with a strong emphasis on a social pillar in an interpretation more common for SDD.

Carbon Fix Standard focuses exclusively on projects on ‘land-use change which converts from “no forest” to “forest”’ (Carbon Fix, 2008). Projects aiming for the CFS should be able to concurrently deliver real and traceable CO2 certificates to the carbon market. Projects under the CFS must evidence positive impacts considering the environmental and socioeconomic parameters established within the standard framework (Carbon Fix, 2008). Even though it is claimed by the standard that ‘only through the successful integration of ecological, social, and economical values is it possible to set-up and maintain a climate forestation project certified by the CFS’ and it shows strong evidence of ecological elements, it was found to belong to WEMD. Carbon Neutral Protocol is not an offsetting standard, but rather a type of eco-labeling and is focused on small-scale community type offset projects. Neither

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sustainable development nor other benefits are defined. However, environmental impact assessment and social impact assessment are listed among technical requirements for CNP projects. CNP was attributed to WEMD. Climate Community and Biodiversity Standard accepts projects that ‘are designed to deliver robust and credible green house gas reductions” and that are ‘likely to achieve significant climate, community and biodiversity benefits’ (CCBS, 2008). It aims at the projects that ‘protect biodiversity and promote the sustainable economic and social development of communities”, and assumes that ‘such projects can bring sustainable livelihoods to local people through the diversification of agriculture, soil and water protection, direct employment, the use and sale of forest products and ecotourism’ (CCBS, 2008). Although, sustainability and sustainable development benefits are mentioned in relation to forestry management neither sustainable development nor co-benefits are defined by the standard. However, it identifies criteria and indicators to be put in place for assessment of project contribution to each section (climate section, community section, biodiversity section). Projects aiming for CCBS must demonstrate that they will ‘do not harm’ to various members of communities and stakeholders that potentially can be impacted by project activities (CCBS, 2008). To sum up, the main finding here is that only GS defines sustainable development, it frames it in conventional interpretation shared by sustainable development and ecological modernization discourses. The overlap of discourses of SDD and SEMD in relation to interpretation of sustainable development explains that 3 standards reveled elements attributed to both discourses at the same time. Two standards evidence WEMD view on sustainability. Three methodologies out of 11 examined demonstrate their conceptualization of sustainability through setting indicators and criteria for selected pillars. The other 8 methodologies have a vague interpretation and view on sustainable development, while claiming to deliver benefits other than GHG reductions. This is considered to signify the GHG emissions reductions as the main priority for the standards, and, thus indirectly reveal the association with WEMD view on sustainability. The strong version of EMD manifested also through the focus of indicators that are set by the standards. Another interesting finding is that 2 standards out of 11 have specifically stated the aim of ‘operating or planning to operate in the developing countries to promote sustainable development’ (Carbon Fix, 2008).

4.2.3 A PROJECT’S PERSPECTIVE On a project level ‘sustainability’ is likewise constructed through the concept of ‘benefits’ or ‘co-benefits’, which are framed through a set of indicators. Indicators are expressed in narratives. This section will look at the narratives employed to define the indicators. The project documents, survey results and other material available11 were analyzed. The narratives describing indicators or ‘benefits’ were accumulated and categorized. Thus, 11 categories judged to be dominating or being of an interest

11 Project web pages, publications, information presented in the registries.

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for analysis were assigned. The narratives considered to share the same meaning formed the categories 12. The results are presented in the Figure 10. It is apparent that social values expressed through ‘income generation’, ‘poverty alleviation’, ‘improved standard of living’ and ‘improved health’ are a critical elements in construction of co-benefits. However, they are viewed from perspective of contribution to national or regional economic development. Environmental values are reflected in strong focus on ‘reduced or avoided deforestation’, ‘biodiversity’ and ‘soil/water/air quality’. Although there is a valid conservational focus, this is a place where environmental values and economic values collide. Natural resources are also seen as a commodity and a source of carbon finance. Technology transfer mentioned in 7.4% of the projects signifies the technocratic approach to handling environmental problems. Capacity building is an important element for 10% of the projects indicating the institutional element characteristic of SEMD. An interesting finding is that a number of projects mentioned its contribution to women empowerment and women security as indirect co-benefit delivered by the project. Overall, the projects analysis revealed the predominant conceptualization of sustainable development and ‘co-benefits’ characteristic for WEMD. However, elements attributed to SEMD are also present to

a lesser extent. SSD manifested itself in an emphasis for human development, well-being and education. Nevertheless, its presence is marginal. In addition to the analysis of co-benefits conceptualization, projects were further analyzed with an aim to define their affiliation with one or another sustainability discourse. Scores were assigned to a project based on the number of discourse elements reveled in the project related documents. 13 For 25% of the projects covered by the inventory it proved to be impossible to identify affiliation with any

discourse due. The results of the analysis are presented in the Figure 1114. Figure 10. Dominating Categories Identified at the Project Level. Source: devised by author based on own analysis. The 46% of the projects revealed elements characteristic of WEMD (Annex VI), which confirms with the conclusion on dominance of WEMD view on sustainability on a project level presented above. Strong reliance on market

12 For instance, category ‘income’ includes ‘economic well-being’, ‘benefits for low-income communities’, ‘reduced expenditure on fuels’, ‘income generation’, ‘additional income’, ‘regular incomes for the poor communities’, ‘household income increase’ and etc. 13 As summarized in the Table 1 for ecological modernization discourses and as described by Dryzek (1997) for sustainable development discourse. 14 Based on Annex VI.

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mechanism, technological solutions and no attention paid to institutional change would imply that project solidly reflect the WEMD understanding of sustainability.

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5. DISCUSSION

5.1 SUSTAINABILITY CONTEXT OF CARBON FINANCE

The recent development in a number of GHG emission reduction approaches has inevitably led to a debate around several issues, including additionality of reductions, fairness and inequality. Contribution of GHG emission reduction project-based activities to sustainable development is at the centre of debate. This section turns from explaining the undermining principles of carbon finance mechanism and describing critical features of emission reduction projects in Sub-Saharan Africa to discussion on the issue of sustainability in relation to market mechanisms. In the context of climate change regime, the Kyoto Protocol does not specify what ‘sustainable development’ stands for. Moreover, the differences between South and North interests in relation to the development and growth translate into contrasting views on the goals and objectives of the global climate regime. This hinders the progress in creating an all-inclusive definition of sustainability that can be broadly agreed upon both on macro- and micro-level of the regime. In this way two prevailing interpretations of sustainable development based on market and regulation cooperatively converge within the climate debate. When it comes to the market-based mechanisms of climate regime there is no commonly accepted definition for sustainability on specific project level either. The argument for not precisely defining “sustainable development” stems from the fact that it is individual host countries’ prerogative to assess whether proposed CDM project meets national SD objectives, as well as to develop nationally appropriate CDM approval procedures with regards to sustainable development. Thus, each country can choose own specific criteria for sustainable development. This way of interpretation can be explained by the fact that the concept originated from Brundtland report cannot be transferred directly to a practical level, as well as by the lack of clarity about the underlying values and perspectives of the notion of SD when applied to the climate change regime (Grist, 2008). Nevertheless, it is implied that if the project contributes to sustainable development on a micro-level, it will have a marginal effect on sustainable development at a macro-level in accordance with the criteria set (Olhoff et al, undated). However, on a mechanism’s level several authors identify an inevitable trade-off between cheap emission reductions and sustainable development as one of the main problems with the CDM (Ellis et al., 2007; Olsen 2007; Olsen and Fenhann, 2008; Pearson, 2007; Sutter and Parreño, 2007; Schneider, 2007). This has its implications for defining sustainable development within the VCM, as it to a great extent follows the practices set by CDM.

Significantly less attention has been paid to the VCM contribution to sustainable development if compared to the research on CDM. Yet VCM-based projects perceived level of integrity includes GHG emission reductions, reduced adverse environmental impacts, and socio-economic benefits delivered to local communities and host countries. This perception is mainly based on assumption that

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voluntary markets enable more direct finance for small community-oriented projects and address underrepresented markets in terms of project types and regions. It is claimed that VCM allows for a greater participation from African countries (particularly through LULUCF projects) (WB, 2008). However, with the large USA share of the market (Ellis et al., 2007) and still rather marginal participation of African countries, it is difficult to claim that the voluntary market is in fact promoting an equitable distribution of project across the world at the moment. It is often argued that environmental integrity and provision of co-benefits are more likely to be attributed to the smaller projects (Bayon et al., 2008). Indeed, this generalization does not always hold true and the views on contribution to sustainability vary greatly depending on the criteria set for assessment. In contrast to the rather common idea, the size of the project is not the exclusive advantage of VCM-based project in terms of contribution to sustainable development. Small-scale projects, often assumed to reach communities and small landowners in developing countries and provide greater sustainable development benefits, happen almost in the same proportion in both schemes, but in absolute terms the CDM supports more of these projects (Ellis et al., 2007). Therefore, it cannot be claimed, that size of the project is definitive for the actors seeking for the greater sustainability benefits and that the smaller scale inevitably ensures better sustainability performance. In this way, the main arguments for better performance of VCM-based projects in terms of contribution to SD are more likely to be linked to the drivers of the market, since consumers define the quality of the provided offsets and, thus, indirectly define the co-benefits.

In fact, VCM aims to deliver ERs at the lesser cost in a first place and co-

benefits are seen as a marketing tool adding value to the VERs generated. In other words, co-benefits provide the offset retailer with a competitive advantage and bring more profit. As seen from the analysis presented, about 70% of project developers invest in projects for the purpose of their CSR policy. Importantly, there is evidence of other type of project developers who utilize VCM opportunity to generate finance for conservation and community development activities. Thus, for them VCM is a source of carbon finance for development. The question that remains is if VCM projects financing is capable of delivering sustainable development to the region.

The impact of VCM projects and their effective contribution to sustainable development are greatly influenced by sustainability conceptualization, evaluation and assessment instruments applied. Thus, the absence of operationalized criteria or indicators for sustainability or definition of co-benefits results in ungrounded claims of delivering additional benefits. It is fundamental that project developers claiming to deliver additional benefits or sustainable development co-benefits have sustainability guidelines and approval procedures to follow. However, as this study reveals there is an overall lack of understanding among project developers of the concept of sustainability. It has been witnessed that meaning of sustainable development is foremost constructed through the set of indicators or criteria for three dimensions of sustainability. Indicators and criteria are ill-defined in the majority of cases, with a few exceptions. The project developer reliance on provision of definition by standard, another set of problems arises, since as it can be seen from the analysis above the majority of standards translate the values of WEMD. Institutional dimension, as well as temporal and spatial dimension, is very rarely operationalized on the project level.

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However, very few standards provide clear guidance on the indicators of sustainability and assessment of sustainable development benefits. It seems to be indisputable that one’s interpretation of sustainability is value judged. Thus, identifying whether particular project meets the objectives of sustainable development becomes difficult, if not impossible task. Since the very concept of sustainable development is based on needs, its definition in ecologically modern understanding encourages individuals to project their own values and needs into the concept. As emphasized by Dryzek ‘actors recognize that the terms of this discourse should be cast in terms favorable to them’ (1997, p. 124). In the case of VCM in Africa the actors present on the market define the sustainability, and dominantly translate values of WEMD. The local business elites and northern organizations determine the types of projects they invest in, own generated credits, while claming it to be a win-win solution, thus, are determinant for an existing view on sustainability. Regardless the findings reflecting strong social focus and encouragement of stakeholder participation, we should be careful to additionally consider the impact that it might have on actual translation of local views on sustainability. Given these facts, it becomes evident that as long as there is flexibility in defining sustainability and sustainable development co-benefits, the actors will adopt the SD definition based on their currents needs.

5.2 CARBON CREDITS FOR SUSTAINABILITY OR SUSTAINABILITY FOR CARBON CREDITS? The interpretation of sustainability has its implications for the very idea of carbon finance. Until the VCM promotes economic and technocratic centered version of sustainability, ignoring institutional change needed, the carbon finance will not be sustainable itself and will be dependent on outside investment and technology transfer. There is a strong need for institutional transformation, capacity building and human development in order for African continent to change its role from limited role of service provider to an active market participant. Indeed, giving the ownership to the projects and credits to local stakeholders is not enough. As it has been already discussed before the capital for initial investments for project development is difficult for local actors to obtain. Financial system in the majority countries of the region is inadequate; access to financial services on the continent is very limited (ADBG, 2009). Thus, there is a need for obtaining carbon finance form other sources, which are likely to come in a form of foreign private investment. This holds true for both types of projects, those seeking to gain profit from carbon credits and those who use carbon trade for generating additional finance for biodiversity conservation and community development activities. The existence of global market for GHG emissions does not necessarily translate into the financial flow for the countries of South. First, positive development outcome depends on how the market is structured and how it operates, at international, national and local levels. Secondly, it is hard to judge upon the volumes of transaction and estimate the volumes of carbon development investments;

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therefore, there I have little grounds to say that VCM can be a sizable source of private finance for carbon development. I relate it to the fact that that the carbon market in general, and voluntary based carbon offset transaction, represent relatively new development. One of the promising findings is that the nature of offsets generated by VCM-based projects in the region is different from those of CDM. They are strongly focused on social development, employ small-scale community-oriented approach with an aim of self-reliance and attract private investment from social institutions and individuals. Thus, they can be considered as finance aiming for high quality of development. Even though, the participation of African countries in current VCM is limited so far, it represents one of the sources of private investment for development in the region. VCM is providing an opportunity for Africa to enhance flow of carbon finance from private sector to the continent, but it has to develop.

6. CONCLUSIONS In this thesis I aimed to uncover how the voluntary market-based projects can contribute to channeling carbon investment to Sub-Saharan Africa and the sustainable development potential they claim. Several conclusions follow from the observations and data. The first conclusion is that there is very little evidence to say that there are significant financial flows originating from VCM for Sub-Saharan Africa. With regards to geographical distribution VCM can hardly be called supplementary to CDM. Even though countries in Sub-Saharan Africa are attractive for the project developers aiming for the delivery of ancillary co-benefits, the region is unlikely to fully benefit from carbon market through VCM due to the limited role of service provider it plays at the moment. Nonetheless, there appears to be significant amount of projects that are generating finance for conservation activities and community development through carbon finance opportunities provided by VCM. The types of projects and types of project developers prevalent in the region revealed strong social and recourse conservation focus suggests that it has considerable potential to attract private investment through carbon finance for poverty alleviation and natural resource conservation initiatives. Large proportion of forestry projects indicates that expertise and experience needed for utilizing the opportunities the region has in relation to LULUCF and potentially REDD initiatives exists. Secondly, despite the reveled tendencies of strong emphasis on resource conservation and social dimension of sustainable development, as well as trends in promoting community-based approaches, this study suggests that the current VCM in Africa can mainly provide sustainable development benefits rooted in the views of weak ecological modernization. At present the economical benefit outweighs environmental and social values. There is very little tendency for institutional change. The study has not identified evidence of truly systems perspectives within the current VCM approaches. While there are some signs of integrating principles of SEMD and SSD, it is still unclear whether these efforts will scale up. Regardless of

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revealed importance of such aspects of stronger ecological modernization discourse, as stakeholder participation and solid ecological focus, I have doubts that this signifies more equitable terms of benefits distribution and institutional change needed. It seems to be unavoidable conclusion that with respect to understanding and translating sustainability into practice, VCM is dominated by the weak ecological modernization approach. Finally, voluntary market for GHG emission reductions is essentially an emerging market, but not a mechanism for financing sustainable development. Thus, only countries that have capacity to benefit from it will be able to exploit this opportunity. This also means that those that lack financial capital and institutional capacity might be left aside.

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49

8. APPENDICES

ANNEX I. List of Organizations Contacted for the Survey. # Company Name1 Action Carbone

2 ADES

3 American Forests

4 Atmosfair

5 Bäume für Menschen - Trees for the World

6 Blue Ventures Carbon Offset

7 C Level

8 Carbon Clear

9 Carbon Footprint

10 Carbon Impacts

11 Carbon Me

12 Carbon Neutral

13 Carbon Offsets Ltd

14 Carbon Positive

15 Carbon Tanzania

16 Cleaner Climate

17 Climactis

18 Climat Mundi

19 Climate Care

20 Climate Neutral Group

21 Climate Stewards

22 co2balance

23 CO2OL

24 CO2Solidaire

25 Ecotrust

26 Envirotrade

27 First Climate

28 Flying Forest

29 Good Planet

30 Grow a Forest

31 Live Climate

32 Love Trees

33 My Climate

34 Offsetters

35 PACE

36 Planetair

37 Prima Klima

38 Project Preparation Trust of Kwazulu-Natal

39 ProNatura

40 Pure Trust

41 Reforest the Tropics

42 SKG Sangha

43 Solar Aid

44 Solar electric fund

45 Stiftung Natur- und Artenschutz in den Tropen

46 Sunfire

47 Sunseed Tanzania

48 Sustainable travel international

49 Target Neutral

50 TerraPass

51 The Climate Trust

52 The Greenbelt Movement

53 The Hunter Foundation Rwanda gov

54 The Nature Concervancy

55 TIST The International Small group

56 TreeBanking

57 Treeflights

58 Trees for cities

59 Trees for the future

60

Trees for travel/

Face foundation

61 World Land Trust

50

ANNEX II. LIST OF ORGANIZATIONS IDENTIFIED AS INVOLVED IN THE PROJECTS DEVELOPMENT OR OPERATION IN SUB-SAHARAN AFRICA. # Organization1 Atmosfair

2 Action Carbone

3 Blue Ventures Carbon Offset

4 Carbon Clear

5 Carbon Impacts

6 Carbon Me

7 Carbon Neutral

8 Carbon Positive

9 Carbon Tanzania

10 Climat Mundi

11 Climate Care

12 Climate Stewards

13 co2balance

14 Envirotrade

15 FACE Foundation

16 First Climate

17 Flying Forest

18 My Climate

19 Pace

20 Primaklimaweltweit

21 Reforest the Tropics

22 Solair Aid

23 Climactis

51

ANNEX III. LIST OF INTERVIEWEES. PC – Personal Communication (2009a, April 20). Phone Interview with Mark Rigby, Global Sales Director, co2balance, UK PC – Personal Communication (2009b, April 21). Phone Interview with Martejn Snop, FACE Foundation, Projects Manager, The Netherlands PC – Personal Communication (2009c, April 21). Phone Interview with Katie Bliss, Project Manager, Solar Aid, UK PC – Personal Communication (2009d, May 11). Phone Interview with Dr. Karl Peter Hasenkamp, Prima Klima Weltweit, Germany

ANNEX IV. QUESTIONS FOR INTERVIEWS AND QUESTIONNAIRE.

1. What motivated you to develop a project in the region of Africa? What made it

attractive for your company/organization? Did you have any particular reason?

2. Why the voluntary market scheme was selected?

3. What standard do you apply for monitoring, verification and certification of

generated credits?

4. Did you experience any challenges/difficulties in project

development/implementation in Africa? Anything that you can attribute to the

specifics of the region? What are the barriers you can identify?

5. Who is a project developer?

6. Who owns the credits generated by the project?

7. Who are the buyers of your credits?

8. How is it important for you that the project provides co-benefits?

9. Are co-benefits defined for your projects? If so, please, describe how.

10. Is sustainable development defined for your projects?

11. What criteria (if any) are employed for identifying/assessing/describing sustainable

development benefits in your projects?

12. Is sustainable development impact assessed for your project?

52

ANNEX V. PROJECTS INVENTORY DATABASE

# Project Title

Host Country

Project Type

Project Start/Project Period

Quantity Emission Reductions

Pproject Developer/Operator

Standard Stage

1Efficient cookstoves inBenin

Benin Energy Efficiency n/a n/a CLIMACTIS (France) Gold

StandardUnder Development

2Green Powerfrom cropresidues

Burkina Faso Renewable Energy 10 years

5,000 tC02eq perannum

Project Partner: GermanMinistry of Environment,Atmosfair (Germany)

Gold Standard

Under Development

3Northwest Cameroon Reforestation

Cameroon Afforestation &Reforestation n/a n/a

Youth Outreach -localpartner, Carbon Me(UK), CEPIC(Cameroon)

n/a In progress

4 Côte d'Ivoire Afforestation &Reforestation n/a

200,000–500,000 tonCO2eq perannum

Sunshine Technology/Carbon Positive (Int)

VCS (intended)/FSC

Under Development

5Congo KikwitReforestation DR Congo Afforestation &

Reforestation 50 years180

tCO2eq perannum

PrimaKlima-Weltweit (Germany) n/a In progress

6Energy Efficient CookStoves

DR Congo Energy Efficiency

2009-2011

29,500 tCO2eq total

Direct provider ofcarbon finance: CarbonClear Limited (UK),Project proponent:Mercy Corp (UK)

Gold Standard

In pipeline,listed under GS

7Kinchella Solar Stoves DR Congo Renewable

Energy 2007 51,720 tCO2eq total

Carbon Impacts (UK)previously supported n/a In progress

8Eritrea efficient woodstoves

Eritrea Energy Efficiency 2003

30.000 tC02eq perannum

Climate Mundi (France),Berkley lab - verificationof reductions

VER (independent verifyer)

In progress

9

Dissemination of ImprovedStove (Mogogo) inDebub Zonein Eritrea

Eritrea Energy Efficiency

2008-2018

8,680 tCO2eq total

MyClimate (Switzerland), NGOVision (Eritrea) - projectdeveloper; Schweizerisches

Eritrea (SUKE) -Project investor

Gold Standard In progress

10 Eritrea Energy Efficiency

2002-2009

2.100.000 tons tC02eq(8,200 contracted)

Carbon Neutral (UK),Ministry of Energy andMines (Eritrea) - projectpartner

CarbonNeutral Protocol In progress

11

Solar WaterHeating inEritrea

Eritrea Renewable Energy

2004-2024

1,725 tCO2eq total

Supported by:Ökozentrum Langenbruck(Switzerland), My Climate(Switzerland). TheEritrean companyTesinma Sh. Co

VER - expertpanel In progress

12 Ethiopia Afforestation &Reforestation 2007 n/a Carbon Me (Int) n/a n/a

13

Climate Stewards Tree PlantingProject ARocha Ghana

Ghana Afforestation &Reforestation

2006-2010

400,000 tCO2eq total

A Rocha Ghana,Climate Stewards (UK) CCBA In progress

14

Improved Household Charcoal Stoves inGhana

Ghana Energy Efficiency

2007-2017

655,629 tCO2eq

222, TÜV SÜD IndustrieService GmbH, ToyolaEnergy Limited (TEL)(Ghana), E+Carbon(USA)

Gold Standard

In pipeline,listed under GS

15

Gyapa Improved Stoves inGhana

Ghana Energy Efficiency n/a 89,804

tCO2eq

TUV Rheinland JapanLtd. ClimateCare JPMorgan

Gold Standard

In pipeline,listed under GS

16Sustainable Community Tree Planting

Kenya Afforestation &Reforestation

2004-2018

100,000+ tCO2eq

TIST (USA), CarbonClear (UK)

TIST "Quantifiers", VER - meetthe requirements of CDM

In progress

53

17

Sustainable

Community

Tree Planting,

Kenya

KenyaAfforestation &

Reforestation

(1999-

2004 -

started

by TIST)

Credit

period

2004-

2018

100,000+

tCO2eq

(f2004-2018)

Carbon Clear (UK),

TIST (USA)

TIST

"Quantifiers",

VER - meet

the

requirements

of CDM

In progress

18Dakatcha

WoodlandsKenya

Afforestation &

Reforestation

6,000,000

tCO2eq totalClimate Stewards (UK)

CCBA

(iunder

evaluation)

In pipeline,

listed under

CCBA

19 Biogas kenya KenyaEnergy

Efficiencyn/a n/a

Carbon Clear (UK)-

previously supported

VCS, GS,

CCB, CDMIn progress

20

Kenyan

Energy

Efficient

Stoves

KenyaEnergy

Efficiencyn/a n/a co2balance (UK)

ICROA

standard,

Gold

Standard

(intended)

In progress

21Dragon Tree

RainforestMadagascar

Afforestation &

Reforestation50 years

560 tCO2eq

per annum

Supported by:

PrimaKlima-Weltweit

(Germany), Operator:

Natur- und Artenschutz

in den Tropen

n/a In progress

22

Madagascar

stove

programme

MadagascarEnergy

Efficiencyn/a

0-2 kton

tCO2eq per

annum

Blue Ventures Carbon

Offset, ssociation pour

le Développement de

l'Energie Solaire

(ADES) and the

University of Tulear,

Madagascar.

TICOS

independent

verification/m

anagement

service

In progress

23

Efficient home

stoves in

Spiny Forest

MadagascarEnergy

Efficiencyn/a

24,000

tCO2eq per

annum

ClimateCare (UK)

sponsor, Operator:

Andrew Lees Trust

not specific

(VCS, VER,

or GS VER )

In progress

24

Household

waste in

Madagascar

Madagascar Landfill gas n/a120,000

tCO2eq total

Operator: Gevalor,

Supported by: Action

carbon (France)

VER+ In progress

25

Mad'Eole 1.2

MW Wind

Energy Plant

in Northern

Madagascar

MadagascarRenewable

Energy

2010-

2017

12,530

tCO2eqMad'Eole (Madagaskar)

Gold

Standard

In pipeline,

listed under GS

26

Solar and

efficient

stoves in

Southwest

Madagascar

MadagascarRenewable

Energy

2008-

2014

93,870

tCO2eq

Association pour le

Développement de

l’Energie Solaire, NGO

(CH) - project developer,

myclimate Foundation

(INT)

Gold

StandardIn progress

27

Integrated

Biomass

Energy

Conservation

Malawi

MalawiBiomass

Energyn/a

250,000

tCO2eq

Hestian Innovation (UK)

- project developer

Gold

Standard

In pipeline,

listed under GS

28

SolarAid

Microsolar

Lanterns

Project for

Malawi

MalawiRenewable

Energy

2009-

2018

2700

tCO2eqACG, SolarAid (UK)

Gold

StandardIn progress

29 Cook Stoves MaliEnergy

Efficiencyn/a

15 – 60

tCO2eq per

annum

First Climate

(International, US,

France, Switzerland)

Gold

Standard

Under

Development

30Jatropha oil in

MaliMali

Renewable

Energyn/a CLIMACTIS (France)

Gold

Standard

Under

Development

31

Zambezi

Delta Carbon

Livelihoods

MozambiqueAfforestation &

Reforestation

2007-

2017

25,722,707

tCO2eq totalEnvirotrade (UK) Plan Vivo In progress

32Gorongosa

National ParkMozambique

Afforestation &

Reforestation

2001

(pilot

start) -

2006

(credits

registred)-

2104

50,000

tCO2eq per

annum

Operator: Sofala

Provincial Government,

Supported by:

CarbonNeutral (UK),

Envirotrade (UK), Plan

Vivo (UK), Edinburgh

University, Europeaid

(2003-2008). Credits

Purchasers:

Envirotrade, The

CarbonNeutral

Company.

Plan Vivo In progress

54

33

Quirimbas

Carbon

Livelihoods

Project

MozambiqueAfforestation &

Reforestation

Operatio

nal since

2003

A total of ~1

369 397

VERs to be

generated by

the1st year.

5th ~ 11 680

357; 10th ~

25 722 707.

Mozambique

Government

Departments,

Traditional communities

living in the national

park, Envirotrade Ltd

(UK)– an investor and

project developer

responsible for project

management and the

marketing and sale. .

Envirotrade Ltd

(Mozambique)

responsible for all

project delivery in the

community. Bioclimate,

Research and

Development .

Plan Vivo In progress

34

Ondangwa

Namibia

Reforestation

NamibiaAfforestation &

Reforestation50 years

42 tCO2eq

per annum

PrimaKLima_Weltweit,

Bäume Menschen -

operator

n/a In progress

35

Planting in

Schools in

Northern

Namibia

NamibiaAfforestation &

Reforestationn/a n/a

Operator:

Okangororosa

Combined School,

Omuthiya and Omboto

Primary School,

Supported by: Flying

Forest (UK)

n/a In progress

36Efficient Fuel

Wood StovesNigeria

Energy

Efficiency10 years

~ 30.000

tC02eq per

annum

Lernen Helfen Leben

(DE) -developer, DARE

(Nigeria), Atmosfair -

funding

Gold

StandardIn pipeline

37 SenegalAfforestation &

Reforestationn/a n/a TREE n/a In progress

38

Green

charcoal in

Senegal

SenegalBiomass

Energyn/a

5,000

tCO2eq total

Operator: Pro Natura

International, Supported

by: Action Carbone

(France)

Gold

StandardIn progress

39 Cook Stoves SenegalEnergy

Efficiencyn/a

15 – 60

tCO2eq per

annum

First Climate

(International, US,

France, Switzerland)

Gold

Standard

Under

Development

40

Improved

Cookstoves in

Fatick Redion

SenegalEnergy

Efficiencyn/a

2300

tCO2eq totalCLIMACTIS (France)

Gold

Standard

In pipeline,

listed under GS

41

Optimised

Solar Drying

In Senegal

SenegalRenewable

Energyn/a n/a CLIMACTIS (France)

Gold

StandardIn progress

42

Qwa-Qwa

Royal Natal

National Park

South AfricaAfforestation &

Reforestation50 years

150 tCO2eq

per annumPrimaKLima_Weltweit n/a In progress

43

Ferncliffe-

Tshalanimithi

Nature

Reserve

South AfricaAfforestation &

Reforestationn/a

9,000

tCO2eq total

Supported by: Climate

Stewards (UK), Climate

Stewards Carbon Bank,

Ferncliffe -

Tshalanimithi. Operator:

A Rocha South Africa

CCBA In progress

44 South AfricaAfforestation &

Reforestationn/a n/a

The Sindisa Foundation

on behalf of Flying

Forest.

n/a In progress

45

Letaba

Biomass to

Energy

Project

South AfricaBiomass

Energy

2007-

2021

225,579

tCO2eq

BioTherm SPV2 (Pty)

Ltd - private company,

project developer and

sponsor, myclimate

foundation represented

by South Pole

Carbon Asset

Management Ltd * –

private entity

Gold

StandardIn progress

46

Efficient

Lighting

Durban, Kwa-

Zulu Natal,

South AfricaEnergy

Efficiencyn/a

4,000,000

tCO2eq total

Philips Lighting South

Africa, Cleaner Climate

(UK)

n/a In progress

55

47Efficient Lighting

South AfricaEnergy Efficiency

20055,000 tCO2eq perannum

ClimateCare (UK)sponsor

not specific(VCS, VER,or GS VER )

n/a

48

Clean Electricity inSebokeng

South AfricaEnergy Efficiency

2008-2018

58,000 tCO2eq total

MyClimate (Switzerland)Planetair (Canada)Sustainable TravelInternational (USA)

Gold Standard

In progress

49

Low-carbonliving inBenoni

South AfricaEnergy Efficiency

10 years n/aPACE (SA) - projectdevelopers

n/a In progress

50

Efficient Home HeatingProject

South AfricaEnergy Efficiency

n/a n/aNova ResearchOrganisation - projectdeveloper,

VER-KPMG audits

In progress

51Basa MagogoGranny Fire

South AfricaEnergy Efficiency

n/a n/a Carbon Impacts (UK)

WBCSD/WRI verified(previously verified byKPMG). VCSverification process pending.

In progress

52

South AfricaHeat-Retention Cookers

South AfricaEnergy efficiency

n/a n/a CO2Balance (UK)

ICROA standard, Gold Standard (intended)

In progress

53Light Up TheWorld

South AfricaEnergy Efficiency

n/a n/a FEDUP - NGO (SA) n/a In progress

54

South AfricaStove Programme/SunFire efficient andsolar stoves

South Africa Energy Efficiency

n/a0-200 tCO2eq perannum

Operator: SunFireSolutions, Supportedby: Blue VenturesCarbon Offset (UK)

TICOS independent verification/management service

In progress

55

Darfur Efficient Cook-stoves

SudanEnergy Efficiency

2008-2014

180,000 tCO2eq total

Carbon Clear (UK) VGS In progress

56

Monduli Forest PilotProject

TanzaniaAfforestation &Reforestation

n/a> 500,000tCO2eq perannum

Carbon Tanzania (TNZ)CCBA (in theprocess ofapplying for)

In progress

57

Afforestation in grasslandareas ofUchindile, Kilombero, Tanzania &Mapanda, Mufindi, Tanzania

TanzaniaAfforestation &Reforestation

(1996)-2000-2019

6,359,693 tCO2eq total

Green Resources Ltd,subsidiary of TreeFarmsA/S (Republic ofTanzania); TreeFarmsA/S (Norway)

CCBA (VERby SGS till2005)

In progress

58

Kikonda Forest Reserve

UgandaAfforestation &Reforestation

2002-213,368 tCO2eq total

Project developer:Global Woods AG,Certifier: TÜV SÜDIndustrie Service GmbH(TÜV-SÜD)

CarbonFix, CCBA (applied for)

In progress

59Mount ElgonReforestation

UgandaAfforestation &Reforestation

1996-2046

750 tonsCO2e peryear

PrimaKlima-Welweit (Germany), FACE(Netherlands), C Level(UK)

n/a In progress

56

60

Reforestation

in Kibale

National Park

UgandaAfforestation &

Reforestation

1996-

2096

~16,600,000

tCO2eq itotal

FACE Foundation

(Netherlands) project

sposnor at the initial

stage, Climate Care

(UK)

SGS (In a

process of

conversion

to VCS)

In progress

61

Trees For

Global

Benefits

(TGB)

Program in

Uganda

UgandaAfforestation &

Reforestation2003 n/a

ECOTRUST, BR&D and

Rainforest AlliancePlan Vivo

In pipeline,

listed under

Plan Vivo

62

Uganda

efficient

stoves

UgandaEnergy

Efficiency

2006-

2008

1,500

tCO2eq total

Urban Community

Development

Association (UCODEA,

Uganda), ClimateCare

(UK)

Gold

Standard

Crediting

Period

completed

63

Uganda

efficient

stoves

UgandaEnergy

Efficiency2009

74,083

tCO2eq total

Centre for

Entrepreneurship in

International Health and

Development, JP

Morgan, TUV Rheinland

Japan Ltd.

Gold

StandardIn progress

64

Uganda

Efficient Wood

Cook Stoves

UgandaEnergy

Efficiencyn/a n/a

Climate Care (UK),

Centre for

Entrepreneurship in

International

Health and

Development (CEIHD)

and Uganda Stoves

Manufacturers Ltd -

project implemenattors

Gold

Standard

In pipeline,

listed under GS

65

Uganda

Energy

Efficient

Stoves

UgandaEnergy

Efficiencyn/a n/a co2balance

ICROA

standard,

Gold

Standard

(intended)

In progress

66Kawaza

VillageZambia

Afforestation &

Reforestationn/a n/a Flying Forest n/a In progress

67

Zengamina

Mini Hydro

Scheme

ZambiaRenewable

Energy

2008 -

2023

2,924

tCO2eq

ClimateCare JP

Morgan, North West

Development Trust

(Zambia) - host, Pioneer

Carbon Ltd (UK), North

West Development

Trust (Zambia) - host,

Pioneer Carbon Ltd

(UK)

Gold

StandardIn progress

68

SolarAid

Microsolar

Lighting

Project for

Zambia

ZambiaRenewable

Energy

2008-

2018

3,600

tC02eq

SolarAid (UK),

University of Zambia’s

Energy and

Environmental

Research Group

People’s Action Forum

(NGO),

HODI (NGO)

Gold

StandardIn progress

57

ANNEX VI. RESULTS OF PROJECTS DOCUMENTS ANALYSIS.

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