Fortis, UN Ink Deal on Financing "Green" Projects
Date: 06-Jun-07
Country: GERMANY
Author: Louis Charbonneau
The two-year pilot project will focus on projects like development plants harnessing renewable energy sources such as wind and water, reforestation and similar plans mostly in China, India and Brazil, according to UNDP and Fortis officials.
The projects will then yield tradable carbon emissions certificates that will be sold to customers in the European Union looking to purchase further allowances for carbon dioxide (CO2) 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 will eventually be expanded to include other developing countries.
"It's about bringing the private sector more into the centre 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 tonnes 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 have been able to buy and sell permits that allow them to emit carbon dioxide (CO2).
Companies exceeding individual limits can buy unused permits from firms that have come under their emission allowance. This 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.
"America is gearing up, and there will be a post-Kyoto framework," he said, adding that this was a market with a great deal of future potential as companies are under pressure to become "greener".
Sounding out the possibilities of a post-Kyoto deal on CO2 emissions reductions is one of the key topics on the agenda of the summit of the Group of Eight industrialised nations in the German Baltic resort of Heiligendamm, which begins on Wednesday.