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13 - 15 JULY 1998, NAIROBI - KENYA


1.0 Introduction


CDM is one of the flexible mechanisms for North-South Cooperation in the

Kyoto Protocol of the UNFCCC with the dual objective of mitigating the

impacts of climate change through funding of projects that reduce

greenhouse gas emissions while simultaneously promoting sustainable

development in developing countries. The concept of Clean Development

Mechanism (CDM) is embodied in Article 12 of the Kyoto Protocol.


The primary concern of Developing Countries particularly African Countries

in the construction of CDM is the creation of a mechanism that would ensure

that the stated objectives converge with a measure of equity not previously

achieved with the other flexible mechanisms e.g the pilot phase of the AIJ

and JI. The aim of this workshop was therefore to lay a rational basis for

the synthesis of a common position among African countries cognizant of

their sustainable development interests to be articulated during the

forthcoming COP4 in Buenos Aires, Argentina. Presentations and the

deliberations were directed towards that concern.


2.0 Presentations and Discussions:-


After the official opening by Kenya's Minister for Environmental

Conservation, presentations were made on topical areas designed to elicit

pertinent issues, provoke vibrant discussions and build consensus that will

inform and hopefully influence the African position at the forthcoming

negotiations. The presentations addressed CDM related issues such as:

Institutional arrangements; CDM: The African Case on Flexible Mechanisms;

Scientific and Social obstacles with Sink Projects; Role of various

stakeholders e.g. Private Sector, NGOs and Regional Organizations;

Challenges and Opportunities for Africa; Capacity Building; Equity

Considerations- Concerns of Developing Countries; Global Partnership in

Addressing Climate Change - How can Africa be involved on an equitable

basis; Potential CDM Projects in Africa; and strategies for COP4, among

other issues. In summary the issues that emerged and which form the basis

of the recommendations were as follows:


2.1) An overview of the UNFCCC and the Kyoto Protocol


It was suggested that the protocol was remiss to the extent that it left

certain issues unaddressed like designating the COP to govern the CDM

through an executive Board under Article 12 (4) without prescribing the

institutional entities linking the Board and the COP.


- Article 12 (5) provides for certification of operational entities but

modalities and certificational criteria is also required.


- Mechanisms and institutions to build capacity in order to realise

sustainable development are needed.


- There is need to be establish an index for quantifying sustainable


- The constitution of the Executive Board, criteria for membership, ratio

of Annex 1 and Non-Annex 1 country membership should be spelt out.


- The extent of Annex 1 countries commitments under the UNFCCC to be met

under the CDM should be determined


- The basis for deciding vulnerability under Article 12 (8) of the

Protocol also needs to be set.


- The methodology of measuring sinks and other emissions reductions should

be developed as well as that of addressing concerns of Article 12

(5) (b).


The entire governance structure of CDM should be properly contextualised in

order to render it relevant to achieve sustainable development. The

participants emphasized the need for:


- Increased awareness of CDM issues among African state parties and their



- Participants in negotiations to be competent and have capacity to

participate in the deliberations effectively


- Commitment


- Coordination in pre-negotiation preparations in order to formulate

harmonized positions.


2.2 An overview of CDM


A number of salient points were isolated:


- Since Africa's priority is sustained economic growth, CDM projects

should focus on "avoided emissions" rather than emissions reduction.

Meaningful projects capable of creating impact in sustainable

development will be in infrastructure development.


- CDM should address sustainable development and technology transfer


- There should be equity in terms of the benefits and access to the CDM


- Governance issues should be addressed particularly the structure and

design of the CDM


- Operational and methodological issues (including certification and

verification criteria of CDM projects and (activities) should be



- As a funding mechanism, CDM should not replace Official Development

Assistance (ODA) drastically


- Focus should be on regional projects


- competent NGOs should be allowed to participate in the verification



It was observed that if Annex 1 countries do not comply with their

obligations under the UNFCCC, that is, technology transfer and financial

assistance, Non-Annex 1 countries, will not be able to meet their

obligations. Constrains and bureaucratic bottlenecks in accessing

financing through mechanisms like the Global Environmental Facility (GEF),

the skewed concept of incremental costs, etc made it even more difficult

for non-Annex I countries, particularly Africa, to access those resources.


2.3 The Kyoto Protocol: Flexible Mechanisms and Equity Considerations -

Concerns of the Developing Countries.


- It was stated that the Kyoto Protocol falls short of preventing serious

damage attributed to global warming; and is not socially just or

equitable enough for the benefit of future generations.


The protocol was deemed inequitable by creating "entitlement" to developed

countries to bank or trade their amounts while no rights are conferred upon

countries of the South. This may compromise the ultimate objective of the



- As a mechanism for technology transfer the project approach of the

flexible mechanisms has not been very successful as only

product-oriented technology seem to be set up.


- There was criticism of the developing countries' role as set out in

Article 12, that is, assisting Annex 1 parties and the question begs

whether there is no other role for the developing countries.


- Certain governance issues were also raised e.g operation and composition

of the Executive Board, modalities of certification.


2.4 CDM: The African Case on Flexible Mechanisms:


Africa's interests in the Protocol were seen as:-


- Pursuing economic growth without being subjected to numerous rules

relating to the UNFCCC


- Real and meaningful technological transfer to enable the region enjoy

real economic growth


- CDM and other related mechanisms such as JI and Emissions Trading are to

be used to facilitate economic growth in the region.


2.5 CDM: Perspectives of G77 and China:


The arguments proceeded on the four cooperative implementation mechanisms

in the protocol; Joint Fullfilment (Bubbling, Article 4), Joint

Implementation (JI) Clean Development Mechanism (CDM, Article 12) and

International Emissions Trading (Article 17).


The paper reaffirmed issues from G77 and China on the CDM as follows:-


- That overseas mechanisms should be supplemental to domestic actions by

developed countries towards emission reduction.


- That the use of flexible mechanisms should lead to real and verifiable

limitation and reduction of emission.


- Specific roles of SBSTA and SBI with regard to these mechanisms should

be spelt out.


- Systems for ensuring auditing, verification and accountability of the

mechanisms should be put in place before projects begin.


C D M:


- Criteria for ensuring a balance for achieving the stated objective in

each project should be put in place.


- CDM should be subject to the authority and guidance of COP/MOP


- That the Executive Board of the CDM should function under authority and

guidance of COP/MOP


- Constitution, character and functions of the Executive Board are

required ahead of projects


- Criteria for certifying emission reductions of a CDM Project should be

put in place ahead of projects


- Quantification of emissions


- Determining responsibility and role of governments of each country in

CDM Projects


- Ensuring operational entity of CDM and separation of its governance from

the existing institutions


- Criteria for arranging due funding


- Ensuring independent auditing and verification


- Criteria for deciding baselines


- Determination of when benefits of CDM projects should accrue to

developing countries


- Action for non-compliance with the CDM criteria should be agreed on


- Definition of a share of proceeds should be agreed on


- Ensuring equitable distribution of CDM projects


- Ensuring that financing for CDM projects is additional to other funding


- Reporting of CDM projects to COP/MOP




2.6 Possible Functions Modalities, Procedures and Methods


It was stated that the functions of the CDM as defined under Article 12(2):


- to enable Non-Annex I Parties achieve sustainable development


- to assist Annex I Parties achieve their commitments


- Within the context of Africa, it was argued that CDM should contribute

to poverty eradication, elimination of foreign debt and sustained

economic growth


- Additional financial resources, transfer of technology and capacity

building would be vital to achieve sustainable development


- It is suggested that the projects should be in form of Foreign Direct

Investment and selection of these projects should rest with the host



- Issues of transparency and accountability should be addressed


- Needs of developing countries should be taken into account

The "assistance" as referred to in Article 12 of the Kyoto Protocol

could result in a shift of responsibilities of Parties and this

could be curtailed by:-


- Ensuring that only a small percentage of emission reduction is through



- A reasonable percentage of investment in CDM projects is allocated

towards sustainable development


- Methods should be based on transparency and accountability


- Criteria for certification and verification be established before any

project starts


- CDM Projects be limited to CO2 reduction and limitation


- Methodological issues be considered by SBSTA and IPCC.


2.7 Verification and Certification: (Presentation paper to be integrated



The key issues identified were as follows:-


i) Whether verification and certification are necessary and if so why?


ii) What will be the process?


iii) What methodology will be adopted?


It was recognized that CDM may encounter problems in the forms listed below :-


- Potential of parties exaggerating the benefit of their involvement in

the mechanism so as to claim additional credits


- Danger of unverifiable claims being made in the absence of baselines e.g

uncertainty in the accuracy of carbon sequestration estimates


- Conceptually diffuse issues like sustainable development


- Difficulty in distinguishing actions taken in pursuit of CDM and

activities that would have taken place anyway i.e additionality


- Danger of monitoring and reporting procedures under the UNFCCC limiting

participation in emission trading.


These possibilities create the need for:-


- defining and measuring sustainable development by universally

agreed indicators such as the United Nations Development

Programme's Human Development Index.


- establishing mechanisms for measuring additionality


- quantification of emission reductions


- addressing leakage/translocation within CDM projects.


It was opined that the desirable approach in addressing these issues would

be as follows, bearing in mind the underlying principle of employing

market based instrument to meet an environmentally regulatory goal:-


- It was stressed that developing countries and Africa in particular

should lay emphasis on sustainable development otherwise there would

be no gains for them in CDM


- Countries must set and define baselines or threshold tests to determine

whether a project not only reduces ghg emission but also satisfies

sustainable development objectives of the developoing country.


- Scientific verification of the certified project once implemented so as

to evaluate ghg reduction


- Crediting of units of ghgs which also involves certification


- Auditing to check on both sustainable development as well as to evaluate

reduction achieved


Elaborate guidelines will need to address:-


- certification criteria


- internationally agreed standard figures for costs of CERUS


- sustainable development indicators


- development of universally agreed verification principles



2.8 Capacity Building - Special Regional/National Needs for Africa for the

Effective Implementation of the Kyoto Protocol Flexible Mechanisms


- Capacity building is the creation and/or maintenance of institutions,

properly coordinated, effective and efficient to perform the defined

functions. Departing from this premise, it was stated that:-


- Government policy makers must realise that development programmes hinge

on climatic considerations and climate change ought to be integrated

into national development plans


- Public awareness is an important tool if the objectives of the

Convention and the Kyoto Protocol are to be realised.


The following were proposed:-


- Creation of a national climate change institution to oversee, advise and

coordinate the activities. These institutions should not be

required to implement the projects in order to ensure transparency

and accountability through separation of roles.


- African countries should allocate funding for capacity building to avoid

over-reliance on donors.


- Capacity building on climate change should extend to relevant

institutions which may lack required expertise.


- the role of national regional and multilateral institutions in capacity

building should be explored. The institutions include universities,

tertiary institutions and private sector.


2.9 AIJ/JI Experiences in Africa: The Burkina Faso Model, Advantages and

Disadvantages, Possible Differences/Similarities with the CDM


- Problems faced by African countries in AIJ implementation ensue from

lack of participation by the African countries in:-


- Concept and design of AIJ/JI


- lack of clear benefits to African countries


- Lack of mechanism of shared credits




- Division of accrued carbon offset; who decides ratio of division of



- Projects should be able to attract multilateral funding as opposed to

bilateral funding as in AIJ


- Role of Executive Board in Carbon offsets marketed - what role will the

Executive Board play?



2.10 Global Partnership in Addressing Climate Change: Opportunities in

Tackling Environmental Challenges - How can Africa be Involved on an

Equitable Basis.


In considering partnership, questions to be addressed should include:


- What are the obstacles?


- What is partnership?


- What is equity?




- Common objectives


- Mutual respect


- Sharing benefits


- Sharing problems




- Private sector


- Labour


- NGOs


- CBOs




- Access to basic services


- Cleaner production technology


- Reduction of vulnerability to climate change


- Adaptation strategies



Sustainable Development Agenda 21 states that Developing Countries should

have access to:


- Environmentally sound technology


- Additional financial resources




- Establish sound business sense


- Lower production costs


- Finances to developing countries


The new paradigm in sustainable development involves:


- Eradication of poverty


- Fulfillment of basic needs


- Sustainable consumption




- Representation on various bodies


- Equal opportunities to participate


- Resource constraints should be addressed


- Economic development


- Regulatory approach


- The argument advanced is that equity not only involves numbers and

people, but also how these people are empowered and other aspects

that contribute to positive moves to ensure equity.



The potentials of a positive mechanism (CDM)


- increased awareness in Africa of the need to act

- increased self-sufficiency


- increased willingness to participate


- commitment to contribute


- greater regional cooperation




- Mutual Mistrust


- Conflicting national agendas


- Range of capacities


- Lack of common understanding


- No common agenda


Possible Solutions


- Increased regional sharing of information


- Improved intercessional communication


- Build greater regional consensus


- Hold more meetings in Africa


- Strengthen less capacitated parties




- Strengthen relationships in Africa


- Prepare sound African position


- Develop African agenda and Strategy


Practical Suggestions


- Seek funding for workshop to prepare an African agenda and strategy

- Task team to arrange workshops and prepare draft documents for



- Coordinate existing initiatives


Way Forward


- Together



2.11 Role of Regional Organizations e.g African Development Bank, East

Africa Cooperation, SADC, COMESA etc, in the Implementation of the UNFCCC

and other Post Rio Conventions: Prospects for participation.


Under Article 22 (2) of the UNFCCC, it is open to any regional economic

integration organisations like COMESA to become a party thereto.


- This means African countries have a large voting bank which as yet is

unutilized and which must be harnessed towards realization of their

common interests in environmental issues


- This may be done through an extension of regional cooperation to cover

the area of environment


- Regional Organisations can play a crucial role in the development of

consensus among countries and formulation of a common agenda since

African countries share similar problems


The principle of cooperation by regional organizations is already being

used to develop common positions on say the WTO negotiations, or the

African economic initiatives


- It was suggested that this approach be institutionalised through

regional groupings whose members' responsibilities will include:-


a) Setting up of an environmental plan


b) developing strategies using regional approaches


c) developing proper legal framework for mandating and negotiating these



d) ensuring information availability e.g on websites,



This, it was argued, would lead to the following achievements:


- Coordination of national positions to be extended regionally


- assistance in networking and regional information


- fostering negotiation on a regional basis


- provision of advice on signature or ratification of certain conventions,

instruments and protocols


- improvement of post entry into force implementation of ratified



2.12 Private sector engagement: Role of private sector in Kenya and East

Africa in the Implementation of Environmental Conventions, Priorities and



It was recognized that the private sector has a significant role to play in

environmental matters, particularly those covered under various Conventions

since industries cause a lot of environmental degradation.


- It was asserted that the private sector is ready to play its role

provided it gets recognition and is accorded facilitation from other

partners in the public sector.


- The major fear entertained by the private sector though, is whether it

stands to lose in participating in Convention matters.


- It was pointed out that the private sector has a positive role to play in

the concept of eco tourism. Since there is also now a global trend towards

discouragement of trade which countenances production of environmentally

unfriendly goods, the manufacturers within the private sector will in

future be required to be more sensitive to clean production technology.


- It also emerged that funds are available within the business community

for UNFCCC activities provided the said community is appropriately

approached and prospects of tangible returns demonstrated.


- It was proposed that business and environment fora be organized in future

among different countries, as these could be good awareness dissemination



Overall, it was recognized that huge potential exists for partnerships

between NGOs and the private sector on CDM projects from initiation so as

to reach a mutual understanding of the criteria for cooperation.


2.13 Scientific and Social Obstacles with Sink projects and how to overcome




Three major Greenhouse Gases and their sinks


- Sinks for carbon dioxide


i) Ocean


ii) Terrestrial ecosystems (soil vegetation)


- Sinks for Methane


i) Atmospheric removals (photolysis)


ii) Removals by sinks


- Sinks for Nitrous Oxide


i) Atmospheric removals


ii) removals by soils


Scientific problems with sinks


- Data availability


- Data collection is an enormous task


- Data variability


- Inadequate analytical tools


i) Few models, hardwares, softwares


ii) Large error margins for GCMs


iii) Methodology lacking for sinks such as wetlands, lakes, rivers


iv) Initial expenditure could be enormous



2.14 Flexible Mechanisms and Training Opportunities for Developing Countries


- Recognising the need to provide knowledge and ideas


- Article 12 does not involve the issue of training


- Article 10 (e) points to the fact of training and a programme should be

set by Parties.


- Article 11 addresses the need for additional resources to be provided

for anything provided for under Article 10.


- Negotiators will have to identify capacity need and mechanisms.


- Programmes on training and capacity building needs should be designed

and implemented.



2.15 Potential for "Cool Air" Emissions Trade in Developing Countries


Dangers and Benefits


- Regarding the UNFCCC, the responsibility paradigm was not used;

leadership paradigm dictated the process and there now exists a limping



- The South therefore has the following options:-


- Opt out

- react defensively

- react constructively


Reacting Defensively


- Developing countries had a handicapped negotiating power:-


- Not enough research is done


- Very limited resources


- Political, social problems


Handicapped negotiating power leads to:-


- no ideas introduced

- the ideas are opposed

- funding creates doubts in approach or may lead to broken unity.

the North defines the agenda and takes charge of the process. The South

gets steamrolled.


React Constructively


The South could either choose to stay together in the G77 or hide behind it.


- This ensures that there is less vulnerability to divide and rule.




- Is most vulnerable


- Potential of damage is high from impacts and from ecolabelling by the North



CDM (what should happen)


CDM calls for funding to be set aside and provides:


- Potential for unilateral credits


- Unilaterally acquired credits or credit sharing arrangements can be

traded or banked.


The "Cool Air" approach


Countries emitting less than a per capita minimum:-


i) have no commitments


ii) should think about trading the unused part in the international market



iii) get points by receiving funds for adaptation mechanism for the CDM


Offer reports on:


- existing percentage of GDP spent on adaptation measures


- existing phase out of of subsidies in percentage terms


- All stakeholders and particularly the private sector as key players need

to be considered in the process


- Technology transfer should ensure that the Third World does not become a

dumping ground


Profit motive as a driving factor in private sector does not sit well with

environmental concerns. Profit motive could however be synthesized with



- The issues of profit vis-vis morality can be reconciled if all players

took up their roles in the meetings of the subsidiary bodies and other

fora. Education and creation awareness could also ensure shared




2.16 Potential CDM Projects in Africa: Addressing Sustainable Development;

Country Presentations


Presentations identified critical areas suitable for CDM Project:

Implementation which would lead to appreciable reduction in emissions while

fostering sustainable development. The common thrust of these

presentations were as summarised below:-


- The project must lead to;


- Sustained economic growth


- Social development


- Poverty eradication


- Meeting basic needs


- reduction/elimination of foreign debt


- real and meaningful technology transfer


- awareness and capacity building


- intra and inter generational equity


A number of opportunities were seen to exist in the following sectors:-


i) Energy sector


Renewable energy development projects may be undertaken to sustain

household and economic activities e.g


- solar based rural electrification


- substituting wind power for fossil fuel electricity generation


- Bio-waste energy recovery project


- Geothermal power projects


ii) Transport Sector projects


- Community urban transport


- improved railway transport network


- improved mass transit in cities



iii) Waste Management


iv) Reafforestation


v) Infrastructure, in particular regional projects


There is need for capacity building projects on CDM both nationally and



Ecological aspects of all CDM Projects must be determined in advance


These should be done through socially acceptable and sustainable approaches

with institutional, community and enterprise involvement.


3.0 Action Plan to Take the Issues Identified by the Workshop Forward


Three base documents will be prepared by countries as set out below. These

drafts will be consolidated into a single document by South Africa and sent

to Climate Network Africa for circulation to one participant per country

for comment. Comments will be submitted to Laurraine for collation and

resubmitted to Climate Network Africa for final circulation to countries.

Countries should use the document as they wish to assist them in negotiations.



Governance and institutions: Uganda


Contact person: Mr. Philip Gwage


Sustainable development: South Africa


Contact person: Dr. Laurraine Lotter


Vertification and certification: Kenya


Contact person: Mr. Peter Orao


Consolidation: South Africa


Circulation of documents: Climate Network Africa (Kenya)







Completion of base documents: 6 August


Consolidation of document 13 August


Circulation to 1 participant per country 18 August

Comments returned to South Africa 3 September


Collation of comments 10 September


Circulation of draft 14 September