The United Nations Development Program (UNDP) has signed an agreement with Belgian-Dutch financial group Fortis to finance environmentally friendly projects in developing countries.
The two-year pilot project will focus on projects harnessing renewable energy sources such as wind and hydropower, reforestation, and similar plans mostly in China, India, and Brazil, UNDP and Fortis officials said June 5. The projects are to yield tradable carbon emissions certificates that will be sold to customers in the European Union looking to purchase further allowances for carbon dioxide emissions, Fortis officials said.
According to UNDP’s director of energy and environment, Olav Kjorven, the plan will help battle poverty and spur sustainable development, and eventually will be expanded to include other developing countries.
“It’s about bringing the private sector more into the center of this equation, of climate change and poverty reduction,” he said.
The two-year pilot project should produce 15 million CO2 emission certificates, which translates into 15 million tons of CO2 emissions, the officials said. They said it was a small amount but a good start for a pilot project.
Since 2005, about 12,000 large energy-consuming plants in the European Union (EU) have been able to buy and sell permits that allow them to emit carbon dioxide. Companies exceeding individual limits can buy unused permits from firms that have come under their emission allowance.
That is how the EU has been meeting its obligations under the United Nations’ Kyoto Protocol, a multinational agreement to reduce CO2 emissions, which expires in 2012.
“All the (Kyoto) credits that will be generated will be eligible under the EU emissions trading scheme, so they can be used for compliance by our corporate clients,” said Seb Walhain, director of environmental markets at Fortis.