The Use of Carbon Credit Mechanisms to Finance Transportation Improvements in the Developing World

The United Nation’s Convention on Climate Change sets an overall framework for intergovernmental efforts to tackle the challenge posed by climate change.  It recognizes that the climate system is a shared resource whose stability can be affected by industrial and other emissions of carbon dioxide and other greenhouse gases. 

After 10 years of operation the program lists 4,372 active projects and claims 11 billion tonnes of current and future carbon emission reductions (ERs), making it the world’s largest generator of carbon offset credits.   A wide range of projects qualify through more than 150 methodologies approved to quantify the carbon reductions.  Of the 4,372 registered projects, 16 projects are identified in the transport sector, generating 49 million total current and future tonnes of carbon credits and an estimated 403 million euros of funding for the project development.

This paper by David Nelson, Nels Nelson and Eline Bakker to presented at CODATU XV: “The Role of Urban Mobility in (Re)Shaping Cities”  (African Union Headquarters, Addis Ababa, Ethiopia  Tuesday 24 October 2012) provides some background on the CDM program, then reviews the 19 approved methodologies and 16 accredited transport projects that comprise the program.  Registered projects include Bus Rapid Transit investments, Metros, freight initiatives and an alternative fuels project.  The paper focuses on the quantified emissions impacts to demonstrate the range of outcomes that have been, and can be, financed with carbon credits.  The authors then discuss factors that may be contributing to the relatively thin participation of the transport sector in CDM finance and suggest strategies to possibly enhance transport participation in the program. 

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