Wednesday, July 1, 2009

CDM projects opportunities: Focus on Colombia

CDM projects opportunities: Focus on Colombia
written by Natalia Garavito - CDM/JI Broker

Like most countries in Latin America, Colombia has submitted only one National Communication to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2001.

The country is working on the Second National Communication and it is scheduled to be completed by 2010. It will include an update of the National GHG Inventory for 2000 and 2004, the vulnerability and adaptation studies for various sectors, including water resources, and a chapter on mitigation measures.

Colombia has a potential of 29, 9 million tons of CO2 emissions reduction per year under optimum conditions of information, risk and international and national institutions. By now, the quantity of CERs issued for a period of 8 years is equal to 295.200 CERs from the potential of 29.9 million CERs to be issued, it means that Colombia has seized only a 0.90% of its Emissions Reductions potential.

There are 109 projects in various stages of the CDM project cycle; 37 projects approved by the DNA-Environment Ministry (with 7.855.473 tonCO2e/year); 13 projects registered with the Convention Executive Board (with 1.928.865 tonCO2e/year); 5 projects have issued 295,200 CERs; and 8 agreements to purchase CERs by 37.4 million dollars. As shown in the graphic on the right, the 32% of the projects are developed in the energy sector, 24% represents waste projects,18% belongs to industry projects, 12% represents Forestry projects, 11% are Transport projects and only 1% represents the agricultural projects.

The emission reduction potential of the agricultural sector (including land use change and forestry) is significant and not yet sufficiently explored in the country. Around 40% of Colombia’s land is used for agriculture (37% for pasture and 3% for cultivation), with forestry occupying 60% of the land in the country.

The REDD (Reduced Emissions from Deforestation and Forest Degradation), is another project type to reduce carbon emissions well-known as “Avoided Deforestation”. These projects are now under negotiations to be implemented for the second Kyoto Protocol period as a CDM projects. If REDD projects are included (as predicted), it would represent a great opportunity to countries with extensive areas of forests Like Colombia. Actually various REDD projects initiatives are carrying out in the country, but none of them has been registered with the Convention Executive Board, as it is expecting the approval within the Kyoto Protocol. However there are examples at the regional level, like Brazil, where this kind of certificates has been negotiated through the voluntary markets.

Colombia produces less than 1% of the global emissions. The energy sector, the transport sector, and the construction sector, all together represent 42% of total emissions in Colombia, the Industry sector and waste only represents 4%, and 3% respectively, and the agriculture sector with 40% and the deforestation sector with 11%, represent the largest emissions in Colombia.

In Colombia there is a large amount of land suitable to develop CDM projects (particularly forestry, agriculture and energy); Tax incentives for CDM projects are implemented; New methodologies for CDM projects have been developed (i.e. Transmilenio); Better prices for CERs are expected; and programmatic projects and Bundling Projects arise as a good option for the small projects in the country.

A recent study by the Inter-American Development Bank shows that if Colombia continues to consolidate its CDM projects portfolio, the country would be able to expect around U.S. $ 85 million income per year, which would lead the CDM industry in the 22nd line of Colombian’s exports.

DNA: Ministerio de Ambiente, Vivienda y
Desarrollo Territorial

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