The U.N. Clean Development Mechanism plans to open two new offices to promote carbon trading in Latin America and Southeast Asia and stimulate interest in the scheme in developing countries.
According to documents posted on the U.N. Climate Change Convention’s website, the new CDM branches will be located in Colombia and the Philippines, and will complement others similar regional offices already operating in Africa (Togo and Uganda) and another recently set up in Grenada for the Caribbean.
“The choice was to drop anchor or stay the course. We ultimately decided to take this time to maintain and improve the CDM and seek opportunities where they might be found … This meant engaging with stakeholders through partnerships in key locations, especially in underserved areas showing interest and potential,” CDM chief Peer Stiansen said during an executive board meeting last week at the UNFCCC headquarters in Bonn.
Stiansen added that setting up the new offices is “required a leap of faith” but CDM feels strongly about implementing the carbon trading mechanism where it is needed.
The scheme allows developed nations to offset their emissions by investing in low-carbon projects in poorer parts of the world.
However and according to data compiled by ICE Futures Europe, the prices of CDM-certified emission reductions fell by 80 percent in 2013 to around €0.55 per unit, sparking fears that this market — established in 2008 to reduce greenhouse emissions in developing countries — is not working out as well as UNFCCC expected. Possible causes are an oversupply of CERs, weak economic growth and disappointing national policies to fight climate change.
CDM currently operates in 88 countries and claims to have initiated over $215 billion worth of low-carbon investment in developing countries, issued CERs equivalent to 1.3 billion tons of carbon dioxide and added more than 110,000 megawatts of renewable energy to global electricity grids.
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