CARBON CREDITS FOR SUB-SAHARAN AFRICA - lumes

LIST OF ABBREVIATIONSAFOLU Agriculture, Forestry and Land UseCCX Chicago Climate ExchangeCDM Clean Development MechanismCER Certified Emissions ReductionsCSR Corporate Social ResponsibilityER/ERs Emission Reduction(s)ERU Emissions Reduction UnitEU ETS European Union Emissions Trading SchemeFSC Forest Stewardship CouncilGHG Greenhouse GasGS Gold StandardHCF-23 Hydrofluorocarbon-23HDI Human Development IndexICROA International carbon Reduction and Offset AllianceJI Joint ImplementationJVETS Japanese Voluntary Emissions Trading SchemeLDC Least Developed CountriesLULUCF Land Use, Land Use Change, and ForestryNGO Non-governmental OrganizationOECD Organisation for Economic Co-operation and DevelopmentOTC Over the CounterPDD Project Design DocumentREDD Reducing Emissions from Deforestation and DegradationSD Sustainable DevelopmentSDD Sustainable Development DiscourseSEMD Strong Ecological Modernization DiscourseUN United NationsUNCSD United Nations Council on Sustainable DevelopmentUNEP United Nations Environmental ProgramUNFCCC United Nations Framework Convention on Climate ChangeVCM Voluntary Carbon MarketVER Verified/Voluntary Emissions ReductionsWB World BankWEMD Weak Ecological Modernization Discourseiv

TABLE OF CONTENTSACKNOWLEDGEMENTSLIST OF FIGURES AND TABLESLIST OF ABBREVIATIONSIIIIIIV1. INTRODUCTION 11.1 PROBLEM STATEMENT 11.2. ANALYTICAL FRAMEWORK 41.2.1 RESEARCH AIM 41.2.2 MAIN RESEARCH QUESTION 41.2.3 RESEARCH SUB-QUESTIONS 41.3 METHODS, MATERIALS AND SELECTION 51.3.1 STUDY DESIGN 51.3.2 MATERIAL AVAILABILITY 61.3.3 LIMITATIONS AND SYSTEM BOUNDARIES 101.3.4 DISPOSITION 102. THEORETICAL FRAMEWORK 113. UNDERSTANDING CARBON FINANCE 143.1 ORIGIN OF CARBON MARKETS 143.2 CARBON MARKETS BASICS 153.3 VOLUNTARY MARKET 173.3.1 REGULATORY CONTEXT 193.3.2 SUPPLY, DEMAND AND ACTORS 194. EMPIRICAL FINDINGS 224.1 VOLUNTARY MARKET DEVELOPMENT TRENDS IN SUB-SAHARAN AFRICA 224.1.1 GEOGRAPHICAL DISTRIBUTION 224.1.2 PROJECT TYPES 244.1.3 ACTORS 264.1.4 CHALLENGES AND BARRIERS 284.2 CONCEPTUALIZING SUSTAINABLE DEVELOPMENT 284.2.1 A STAKEHOLDER’S PERSPECTIVE 294.2.2 A STANDARD’S PERSPECTIVE 304.2.3 A PROJECT’S PERSPECTIVE 345. DISCUSSION 375.1 SUSTAINABILITY CONTEXT OF CARBON FINANCE 375.2 CARBON CREDITS FOR SUSTAINABILITY OR SUSTAINABILITY FOR CARBON CREDITS? 396. CONCLUSIONS 40v

7. WORK CITED 428. APPENDICES 49ANNEX I. LIST OF ORGANIZATIONS CONTACTED FOR THE SURVEY. 49ANNEX II. LIST OF ORGANIZATIONS IDENTIFIED AS INVOLVED IN THE PROJECTSDEVELOPMENT OR OPERATION IN SUB-SAHARAN AFRICA. 50ANNEX III. LIST OF INTERVIEWEES. 51ANNEX IV. QUESTIONS FOR INTERVIEWS AND QUESTIONNAIRE. 51ANNEX V. PROJECTS INVENTORY DATABASE 52ANNEX VI. RESULTS OF PROJECTS DOCUMENTS ANALYSIS. 57vi

1. INTRODUCTION1.1 PROBLEM STATEMENTClimate change is a defining issue for human development in the 21 st century.In the context of climate change, carbon credit transaction in a form of GHG emissionreductions projects are at the heart of low-carbon path development for the longerterm. Future financing of mitigation and adaptation activities in developing countriesis necessary in order to secure global action and make tighter reductions targetspossible. The upfront costs of low-carbon approaches deployment and the incrementalcost difference between carbon-intensive and low-carbon practices will not be metwithout significant investments (UNEP, 2009). Carbon credits have the potential toprovide a significant stream of finance from developed countries for activities in thedeveloping ones.The rapid development of carbon finance raises a number of critical questionsabout the capacity of carbon markets to address the great challenge of climate change.On the one hand, they have a potential to make a difference in the developmentpathways of least developed countries. Indeed, one of the major challenges thatcurrent market-based efforts to tackle climate change are facing is that of engagingdeveloping nations. Participation of developing countries is fundamental to climatechange adaptation and mitigation successful strategies. The overwhelming majority ofLeast Developed Countries are located in Africa, as are most countries characterizedas having “low human development” by the Human Development Index (HDI)(UNDP, 2008). Driving investments from industrialized countries to less developedones can foster transition towards a less carbon-intensive society. Of all regions,Africa is still in the most pressing need of development. Yet the regions’ participationin carbon markets has been negligible.On the other hand, another serious concern remaining is the contribution ofexisting compliance project-based mechanisms to sustainable development objectiveswhile investing in activities aiming at GHG emission reductions. The effectiveness ofClean Development Mechanism (CDM) as a major compliance market mechanism inassisting host countries in their undertaking to promote sustainable development hasbeen widely questioned by academics, civil society groups and practitioners (CAN,2007; CDM Watch, 2004; Greenpeace, 2008; Ellis et al., 2007; Olsen 2007; Pearson2007). CDM projects proponents see it as an effective tool to ensure emissionsreductions and lower the cost of compliance for Annex I countries 1 , while providingassistance to the poorest countries to leapfrog outdated carbon-intense practices(Boer, 2008). Although detractors argue that as opposed to the cost-effective emissionreductions objective of the mechanism, the sustainability aspect of CDM is rarely a1The industrialized countries listed in this annex to the Convention which were committed return theirgreenhouse-gas emissions to 1990 levels by the year 2000 as per Article 4.2 (a) and (b). They have also acceptedemissions targets for the period 2008-12 as per Article 3 and Annex B of the Kyoto Protocol. They include the 24original OECD members, the European Union, and 14 countries with economies in transition (UNFCCC, 2009).1

main driver for project development (Ellis et al., 2007) and CDM supports projectsthat would have happened anyway (Aldy & Stavins, 2008). Even though sustainabledevelopment is one of the two purposes of the CDM, and is of a key concern todeveloping countries, the CDM in most of the cases only provides monetary profitincentives for the other, the GHG-reduction purpose, and is claimed by many toproduce low-cost ERs at the expense of achieving sustainable development benefits(Ellis et al., 2007; Olsen 2007; Sutter and Parreño 2007; Schneider, 2007). On aglobal scale Cosbey et al. (2005) argue that concentration of CDM projects in a fewdeveloping countries violates the stated overarching goal of the CDM to contribute tosustainable development, because ‘many countries are denied such benefits a priori ifthey are left out of the mechanism’. On a project level, Sutter and Parreño (2007)conclude, that only 1% of all the CERs generated so far ‘contribute significantly tosustainable development’. Olsen (2007) has evaluated the contribution of the CDM byreviewing close to 200 studies and concluded that ‘left to market forces, the CDMdoes not significantly contribute to sustainable development’. A number of authors gofurther and claim that CDM in its current design is fundamentally incapable ofmaking substantial contribution to sustainable development (Sterk, W., & Wittneben,B. 2005; Pearson, 2007).So far, distribution of CDM projects as a major compliance marketmechanism under Kyoto Protocol for carbon finance has been rather unequal, withprojects being concentrated in a few countries in Asia and Latin America (Boyd et al.,2007; Michaelowa, 2005; UNEP Risø Centre, 2009). Despite the idea that CDMshould address the role of development within the carbon markets, African countries’participation had been poor as yet. Sub-Saharan Africa, with 11% of the world’spopulation, accounts for only 3.6% of global emissions of CO2eq, indicating lowlevels of income and of energy consumption (Collier, 2008). Meanwhile, contributingthe least of any continent to global warming, Africa has been already impacted by thechanging climates (IPCC, 2007). Increasing evidence of drought, fall in agriculturalyields, decrease in water supplies have been observed (IPCC, 2007). Moreover, thenumerous challenges Africa is dealing with will be only amplified by climate change,since widespread poverty, recurrent droughts, inequitable land distribution, andoverdependence on rain-fed agriculture make it especially vulnerable to the impactsof climate change (IPCC, 2007). The consequences in Africa are likely to be severedue to the factors mentioned above, as well as its limited capacity to adapt (Collier etal., 2008). At the same time, the rate of growth in emissions from the region is abovethe world average (Collier et al., 2008). Africa is now accounts for 20% of worldemissions from land-use and land-use change, largely deforestation (Collier, 2008).As a result of CDM’s lack of success to contribute to sustainability, and agrowing class of buyers demanding ‘high quality’ credits, tendencies to go beyondcompliance in order to ensure sustainable development benefits within GHG emissionreductions projects have been growing with the development of carbon markets. Thisincludes expansion of non-Kyoto based trading schemes, voluntary offsetting projectsand additional standardization of CDM projects. The voluntary market, as a lessformalized platform for carbon transactions, has been evolving rapidly. Apart fromnumerous possibilities it provides for the African continent to participate in carbon2

markets, it is considered to be able to provide better opportunities to promotesustainable development in the region (Harris, 2007).Regardless of Africa’s prospects to gain outside investment for sustainabledevelopment through the Kyoto mechanisms, the continent has thus far received anextremely low share of CDM investment with 102 projects registered in a pipeline outof total 4733 (UNEP Risø Centre, 2009). More than a half of projects are in SouthAfrica (UNEP Risø Centre, 2009). With only 2% of total number of CDM projectsAfrican continent has not benefited from this mechanism notwithstanding its potentialin biomass, renewable energy and forestry. Several barriers, including lack ofavailable finance, lack of industrial-based economies, high dependence on agricultureand forestry, lack of strong institutional framework, high risk level for investments,lack of expertise, lack of political will, restrictions on agro-forestry projects underCDM, among other factors appear to impede participation in market-basedmechanisms (Lesolle, 2008; WB, 2008). While three quarters of Sub-Saharan AfricaGHG emissions come from land use and land use change (Collier, 2008; WRI, 2008)the large classes of LULUCF assets attractive from the perspective of sustainabledevelopment are constantly excluded from the regulatory markets (WB, 2008). Interms of generated volumes of projects, if compared in relation to Kyoto-basedprojects, Africa is, however, better positioned in the voluntary market (EcosystemMarketplace, 2008). Although here again it lags behind other continents. VCM-basedprojects provide additional non-carbon benefits and have potentially more scope toinvest into small-scale community-oriented land use and agro-forestry projects and,thus, have potential to fill in the gaps the compliance market does not address. Thisemerging carbon market offers a platform for GHG emission reductions for theprivate sector actors aiming to invest in ‘social good’ projects. Sub-Saharan Africahas a lot of opportunities to benefit from certain voluntary-based projects that canaddress the issue of engaging underrepresented developing countries into the globalcarbon market, providing stream of finance, and contributing to overall sustainabledevelopment objective in the region.Indeed, there is a need to assist in adaptation of development pathways thatwill confront major causes of GHG emissions and will utilize the opportunitiesAfrican continent offers in consistency with regional and global sustainability goals(IPCC, 2007; Canadell et al., 2008). Thus, more robust understanding of the complexcontext of carbon development in the African regions is required if positivesustainable development benefits are expected to result from carbon finance.Moreover, much more has to be understood about the role of carbon markets inaddressing the needs of developing countries, and in particular how the voluntarybasedprojects can contribute to channeling carbon investment to Sub-Saharan Africaand the sustainable development potential they may hold.3

1.2. ANALYTICAL FRAMEWORK1.2.1 RESEARCH AIMThis study has twofold purpose. Firstly, it aims to enhance understanding ofthe current development of the voluntary market in Sub-Saharan Africa as one of thesources of investment for sustainable development. Secondly, in doing so, it intendsto provide critical evaluation of the voluntary market role in contributing tosustainable development in the region.The present research was designed to address the following questions, which areembodied in the structure of the paper:1.2.2 MAIN RESEARCH QUESTIONTo what extent can the dual aim of providing carbon finance and deliveringsustainable development benefits through investing in GHG emission reductionprojects be satisfied by voluntary markets in Sub-Saharan Africa?1.2.3 RESEARCH SUB-QUESTIONS• What are the benefits and the potential for voluntary carbon markets inengaging underrepresented developing countries into global carbon marketsand providing a source of funding for sustainable development in Sub-SaharanAfrica?• How sustainable development is interpreted as a practical framework inrelation to GHG emission reduction projects in the context of voluntarymarket in Sub-Saharan Africa?4

1.3 METHODS, MATERIALS AND SELECTIONWith the overall aim and research questions in mind this section will addressthe methodological approaches employed by this thesis.1.3.1 STUDY DESIGNOn the whole, this study can be categorized as qualitative research, as it hasserved to enhance comprehension of the complexity of a problem (Mikkelsen, 2005).The general research strategy employed by this study is a mix of qualitative andquantitative forms, a cross-sectional design, and a mix of text analysis, interviews,and questionnaire methods.The need to understand the relevant aspects of the carbon markets phenomenajustifies the adopted qualitative approach. The qualitative analysis is especiallyrelevant for this study, which aims not only to describe the current state of thevoluntary market-based mechanism, but also to explain future development of thecarbon finance options in Sub-Saharan Africa. It was considered suitable for thecurrent research as a strategy suggested for the exploration of the subject. Moreover itleaves room for interpretation of the studied phenomena from the perspective ofagents involved. One of the distinctive characteristics of qualitative research is that itis more concerned with words, or narratives, than numbers (Bryman, 2004). Itsepistemological position stresses understanding of social world through examining theinterpretation of the world by its participants (Bryman, 2004). Its ontological positionis described as constructionists, which implies that social properties are outcomes ofthe interaction between individuals. It views the studied phenomena as a socialnarrative and process, with an aim to show how it unfolds over time (Bryman, 2004).Hence, the application of qualitative research encouraged my ‘viewing world throughthe eyes’ of market agents and enhanced my perspective, by providing valuableinsights into the nature of studied phenomena (Silverman, 1999).The quantitative research consisted of collecting empirical data with relevanceto the subject of voluntary carbon market evolution in order to enhance understandingof the phenomena, to emphasize the role it plays and to be able to hypothesize aboutits future development.The analytical part of the thesis contains elements of discourse analysis. Inthat sense the study concentrates on details of the narratives adopted, such asdifferences in definitions of terms or differences in ways of addressing similar ideas(Gee, 2001; Punch, 1999; Wodak & Meyer, 2001) about sustainability in GHG ERsprojects by various actors or contextual meaning of the projects and standarddocuments. Assuming that the conceptualization defines the outcome or in the wordsof Gill (cited in Bryman, 2004) this study refers to sustainability concept as“something said as being a solution to the problem”. Thus, analysis of itsconceptualization provides insight into possible outcomes.5

Discourse analysis is sensitive to ‘how spoken and written languages are usedand how accounts and descriptions are constructed’ (Punch 1999, p. 229). It has anaim to ascertain the contextual meaning of the documents and other informationcollected, as for example, the project reports, views expressed in the interviews,standards related documents, and to identify their rationale and effects. In otherwords, it means that different ‘world views’ are considered within this study asexpressed narratives of the phenomena. They are analyzed in order to understandsome common comprehensions and underlying value commitments within thesustainability discourse. As well as to gain understanding of how sustainabledevelopment as a practical framework is conceptualized and what elements play arole in constructing the concept. After the way of framing sustainable development byvarious actors of carbon market will be presented, I will compare it to the elementsforming discourses as adopted by the study and will draw conclusion on the nature ofdiscourse prevailing in the phenomena of voluntary carbon market in the studiedregion.Next, I shall turn to an elaboration upon the methods utilized by the study: oftext analysis, interviews, and questionnaires and a method of discourse analysis.1.3.2 MATERIAL AVAILABILITYFirstly, the data on market development were obtained through publishedreports from international organizations, private companies and non-governmentalorganizations, which have examined the recent developments of the voluntary carbonmarket, as well as academic articles and other publications available. These materialswere located primarily through search engines like Lund University’s ELIN system,Google Scholar, a union catalog of digital resources OAIster, Danish TechnicalUniversity DADS system, Ecosystem Marketplace Reference Library, New CarbonFinance open resources and the UNEP publications database. It has led to thediscovery of the key areas to be further analyzed and determined the choice ofparticipants for the interviews, questionnaire respondents and projects to be includedin the inventory. The choice of the empirical evidence, i.e. what information could besupplied from literature or had to be investigated empirically through questionnaires,interviews, what the alternatives under consideration are, was tentatively exploredthrough expert consultations.The first stage of building the inventory of voluntary market-based projects inSub-Saharan Africa involved a comprehensive survey of the World Wide Web andidentified a total of 68 projects across the supply chain, including those in the pipelineand registered 2 . The retired projects were not included in the inventory due to theinsufficiency of the information available. Only the projects that claimed as aimingfor carbon transactions are included in the inventory. A number of projects for whichnot enough adequate data for evaluation was available were not included in theinventory, even though they were identified during the initial stage. There are a2 The registry mechanism for the voluntary market is a system of VERs accounting that enables the tracking ofVERs generated from issuance to retirement, basically a database. Thus registered projects here mean the project isregistered under one of the voluntary standards.6

number of projects discussed in this study that were not included in the studyinventory. A database of relevant and available information obtained from thispreliminary web survey includes project type, project location, transaction size,crediting periods, and certification standard and is presented in the Annex V. Projectco-benefits were included in the database based on information retrieved from theproject documents accessible. Information on project developer, project operator isprovided for the projects it was available for.The actual projects were identified through the publicly available registrieslike the Gold Standard Registry, the CarbonNeutral Company Register, the VCSRegistry System, TÜV SÜD "Blue Registry" certification database, the web directoryof carbon offsets Carbon Catalog and project portfolios of major retailers of VERs(Annex I). 23 organizations involved in project s activities were identified (Annex II).Some data regarding existing projects were collected directly from project developersthrough the questionnaires disseminated. To avoid double counting after dataavailable for projects were analyzed some projects were excluded from the inventorybased on the conclusion that the projects activities and emission reductions by theprojects were covered within other project. This can be explained by the absence of aunified database, which results in a number of cases when the same activity might bepresented as two separated projects, based on the varying vintage period or otheraspect. For instance, in case of a reforestation project, when after the project changesthe owner, the new project maintainer might aim for altering a standard choice,reevaluating generated offsets volumes or performing extra-activities (enlarging treeplantation), changing thereby project characteristics, which in turn might result inuncertainty and double-counting.Sustainable development benefits and co-benefits were evaluated for theprojects based on the Project Design Documents (PDDs) available; informationpublicly provided by the project developers and offset retailers; questionnaire resultsand interviews conducted.Due to a number of factors such as the nature of Over-the-Counter (OTC)markets, ascertaining offset price, and acquiring information on credit buyers andspecific transactions data proved difficult to obtain. The proprietary nature of someproject information, such as offsets price, data on offsets buyers was not available inmost of the cases and prevented the completion of the inventory database. Moreover,documents providing comprehensive information regarding the project were availablefor a limited number of projects only. Though, the present study inventory coverssignificant amount of projects in the region, it doesn’t claim to be a complete databaseof all voluntary market-based projects in Sub-Saharan Africa.Secondly, a survey was conducted among organizations identified aspotentially involved in the development of voluntary market-based projects in theregion. The survey instrument, a questionnaire, was e-mailed to the list of selectedorganizations provided in Annex I in the first week of April 2009. In order to improveresponse rate the reminder was sent via e-mail in the third week of April 2009 andwas followed by phone reminder shortly.7

The organizations involved in the voluntary market projects were identifiedthrough the registries and based on the previous research and publications available(Bayon et al., 2008; Cruz, 2007) that were believed to have adequate knowledgeabout the issue as well as through the publicly available registries for the voluntarymarket projects (Bryman, 2004). The questionnaire was kept short as suggested bySilverman (1999), with only thirteen questions and included both open-ended andclose-ended questions in ‘order to reduce the risk of ‘respondents’ fatigue’(Silverman, 1999). Low-response rates are a disadvantage of surveys; the follow-upquestions or elaborations that cannot be asked are another weakness of this method(Trochim, 2006). Moreover, the study cannot be explained in person, and a goodcommand of English is required to complete the questionnaire (Trochim, 2006), aswell as various actors may have interpreted the questions differently from what theresearcher had intended.Thus, verification ofqualitative research isimportant as it is oftenaccused of subjectivism(Bryman, 2004). Indeed,only 12 of the 23organizations identified asproject developers orproject operators took partin the survey, which is anapproximately 52 percent response rate. However, they represent quite a good varietyof organizations, with respect to the types of organization presented in the region andorganization types (project developers, offset buyers and retailers) as one may seefrom the charts presented in the Figure 1. The outcomes of the survey were evaluatedusing descriptive analyses methods.Although, some facts and figures, as well as sustainable development practicesand implementations surrounding the use of market-based GHG reductionsapproaches could be obtained from publicly available documentation, due to limitedinformation available and in order to obtain additional input from other sources thansecondary data interviews were conducted. A semi-structured interview format withan interview guide approach was used. In order to facilitate the analysis and keep thefocus of the study, the questions were determined beforehand but kept open ended.This usually allows for a more flexible situational interview (Mikkelsen, 2005).According to the qualitative method, they should have been kept unstructured,whereby general issues were selected before the interviews, leading questions werepredetermined but other questions were not. Notes were taken during each phoneinterview and compiled into a single database (Yin, 2003), and coded accordingly(Bryman, 2004.) Kvale’s (1996) principle ‘the shorter the interview’s question are andthe longer interviews answers, the better’ served as a guiding principle for theinterviews. Personal phone interviews proved to be an advantageous method incollecting additional data when compared to an e-mail questionnaire (Silverman,1999). The list of interviewers and the examples of the questions asked is provided inthe Annex III and Annex IV accordingly.8

Additionally, the standards’ guidance documents for eight standards and oneGHG accounting protocol were reviewed. Only standards applied for the projectsidentified during the inventory stage were selected for the analysis. Their rationalewas analyzed and comparable variables were identified for sustainable developmentbenefits determination.9

1.3.3 LIMITATIONS AND SYSTEM BOUNDARIESDue to the complex nature and broad regional scope of this topic, it isnecessary to clarify the limitations of this research, so as to set some boundaries.It is, thus, relevant to point out that this study attempts to assess whether VCMprojects could contribute to streaming finance for climate change mitigation andadaptation efforts and provide sustainable development benefits in Africa rather thandiscuss whether they should. Furthermore, the study does not assess actual SDimpacts of individual projects, but looks at the development of phenomena as awhole. This study covers only selected offset providers that were identified asinvolved in voluntary-based project for the moment of conducting a research. Eightstandards were chosen based on their presence in the selected region to illustrate thestandards followed by voluntary GHG ERs projects. The study does not attempt tocover all the standards employed by the VCM.Limitations to this research manifested in primary and secondary datacollection and at the analytical stage of the research on the account of non-legallybinding voluntary market being vast, non-structured and nascent. Data availabilitywas limited due to the accessibility of projects registries, questionnaire response ratesand project developers and operators availability. The study acknowledges that it wasnot able to obtain complete data on voluntary market-based projects in the regiongiven that the level of cooperation from market actors was rather low. Moreover, thetotal number of the voluntary project in the region cannot be approximated only basedon the total volume of transactions, since the total number of the voluntary-basedprojects is not publicly available information. This prevents from conclusions on thevolume of the market covered by the current study. In terms of regional scope, thestudy has no intention to address the objectives through evaluating nationally distinctfeatures of the countries of the region, but views the region as sharing commoncharacteristics significant for evaluated phenomena.Despite these limiting factors, the material collected allows hypothesizing ongeneral development trends as well as identifying main approaches to sustainabledevelopment conceptualization.1.3.4 DispositionThe paper is organized as follows: the next section discusses the theoreticalframework of the study. A section 3 that introduces the general institutional structureof carbon markets follows this. Section 4 that describes the data and reveals somepreliminary evidence follows it. Section 5, discussing the collected empirical materialand presenting the results of the study, succeeds it. The final section concludes.10

2. Theoretical FrameworkThe theoretical starting point as a framework for critical understanding of thephenomena (Silvermann, 1999) for this study originates from the aim to identify theprinciples of sustainability that the GHGs emissions market mechanisms draw upon.The initial assumption employed for this purpose is that the climate change regimecan be best approximated by looking at it through the prism of the sustainabilitydiscourse, which represents a strong will of integrating economic, social, institutionaland environmental aspects of development (Dryzek, 1997). The study is based on theidea that it is possible to understand some common comprehension and underlyingvalue commitments within the discourse through studying how various actors at playinterpret it and what are the dominant narratives that manifested around the issue ofsustainable development on the ground.Since 1997 when Dryzek labeled sustainability ‘as a major game when itcomes to environmental affairs’, (Dryzek, 1997) it has become even a more broadlyaccepted way to frame issues related to the environment. Yet it can be also arguedthat sustainable development became an ideology for the 21 st century as a policydiscourse as well as development practice. Climate change regime is no exception.Definitions of sustainability and sustainable development abound. However,they tend to be abstract and thus open to diverging interpretations. Indeedsustainability nowadays is regarded as an overarching concept integrating multipledimensions and has been extended to indicate a dynamic process entailing associatedprogresses, among others, in the social, economic, institutional and environmentalspheres. Since the notion of sustainable development emerged in the 1980s as adesirable guiding principle for the world community, it has in many cases become a‘buzzword largely devoid of content’ as Esty notes (cited Elliot. 2004). The presentstudy acknowledges that the aims and meanings of the sustainable developmentconcept in the frame of climate change regime continue to be rather vague and broad.Regardless of all operationalized definitions of sustainability, there is still a room forconceptual division between the stronger and the weaker meaning of it.In this thesis, I will explore the conceptualization of sustainability by adoptingdiscourse analysis as a theoretical framework. As Phillips and Jorgensen (2002) vividdescription shows ‘discourse analysis is not to be used as a method of analysisdetached from its theoretical and methodological foundation, it is not just a methodfor data analysis, but a theoretical and methodological whole.’ Thus, I shall turn nextto explain how it is understood in the context of the current study. In line withDryzek’s (1997) interpretation I understand discourses as ‘a shared way ofapprehending the world’, ‘embedded in language’, and ‘specific ensembles of ideas,concepts and categorization that are produced, reproduced and transformed in aparticular set of practices’ as defined by Hajer (cited Bäckstrand and Lövbrand,2006).11

Sustainability discourse is formed by a number of concurrent and interactingdiscourses. There are overlaps and value conflicts, as well as struggle over meaning ofphenomena (Bäckstrand and Lövbrand, 2006). While recognizing the varietydiscourses that encompass and form sustainability discourse, for the purpose of thisstudy, drawing on Dryzek (1997) and Bäckstrand and Lövbrand (2006), I will focuson those sustainability streams that I have judged to be more influential in the climatediscourse: sustainable development and ecological modernization discourses.Sustainable development is ‘an integrating discourse’ (Dryzek 1997, p. 121)that seeks to ‘combine ecological protection, economic growth, social justice, andintergenerational equality, not just locally and immediately, but globally and inperpetuity’ (Dryzek 1997, p. 121). Sustainable development, as highlighted byDryzek (1997, p. 129) stresses ‘nested systems, ranging from the local to global’,thus, seeking to incorporate system perspective to embody integration across leveland context. This means in particular that discourse views cooperation andpartnership as the opportune approaches to environmental problems, rather thancompetition, and emphasizes citizen participation, personal development and wellbeing,including education and growing awareness, and, last but not least, economicalgrowth (Dryzek, 1997, p. 125).Ecological modernization discourse calls for changing political institutions aswell, however, unlike sustainable development discourse, it only promotesdiminishing the role of the state, instead of stressing the role of partnership betweenvarious institutions. However, at the same time the dominant feature of the ecologicalmodernization discourse is reliance on active cooperation between business and otherstakeholders. Thus, as Hajer (1995, p. 31) argues, it ‘uses the language of businessand conceptualizes environmental pollution as a matter of inefficiency, whileoperating within the boundaries of cost-effectiveness and administrative efficiency’. Itis focused on technological improvements (like, for instance, energy efficiency,renewable energy or material efficiency). Ecological modernization discourse aims toacquire economic and environmental benefits through improvements in technologicaland economic systems. This means, as noted by Hajer (1996, p. 248), that ‘economicgrowth and the resolution of ecological problems can be reconciled’. Moreover,ecologically modern discourse is more instrumental than sustainable developmentdiscourse and as Dryzek (1997, p. 143) argues it ‘has a much sharper focus than doessustainable development on exactly what needs to be done with the capitalist politicaleconomy’.Nevertheless, ecological modernization discourse as a perspective onsustainability is not a homogeneous view. It is a diverse discourse that represents acontinuum of strategies between weak and strong ecological modernization(Bäckstrand & Lövbrand, 2006). Basically, the fundamental difference betweenstrategies is a technocratic and neo-liberal view that doesn’t require any fundamentalchange in current institutions adopted for the weak approach, while strong ecologicalmodernization advocates for greater institutional reflexivity, democratization ofenvironmental policy and a stronger emphasis on the justice dimensions ofenvironmental challenges (Bäckstrand & Lövbrand, 2006). The distinctive features of‘weak ecological modernization’ and ‘strong’ version are summarized in the Table 1.12

Table 1. Key Elements of Versions of Ecological Modernization DiscoursesStrong Ecological ModernizationEcologicalInstitutional/SystemicCommunicativeDeliberative democraticInternationalDiversifyingWeak Ecological ModernizationEconomicalTechnologicalInstrumentalTechnocratic/ Neo-corporatistNationalUnitarySource: based on Christoff (1996)The way this study considered how these three discourses interrelate withinthe sustainability discourse is presented inthe Figure 2.In my analysis I shall furtherproceed with identifying elements ofvarious discourses at play when it comesto the phenomena of VCM, seeking tounderstand the underpinnings of theprevailing interpretations of sustainabledevelopment and its contribution toforming the sustainability discourse.However, before doing so, the basicprinciples and ideas behind carbon financeand functioning of carbon markets have tobe explained.13

3. UNDERSTANDING CARBON FINANCE3.1 ORIGIN OF CARBON MARKETSThe international community is facing the challenge of establishing aneffective and meaningful climate regime to address the most severe environmentalthreat in human history. Carbon finance is one of the market-based mechanismsdesigned to respond to the challenge of changing climate.The underlying principles and concepts of economic instruments for creationof markets for environmental assets originate from a logic of cost-effectiveness and,therefore, the markets are designed to ensure that emissions reductions are achieved atthe lesser cost for society. The basic idea in the ecological modernization discourse isthat incorporation of full cost of environmental services into economy will securegrowth through ‘green economy’ and will generate wealth needed to achievesustainability goals: eliminating poverty, tackling environmental hazards andstabilizing economy (Grist, 2008). Thus, undervaluation of carbon cost is the reasonwhy the perceived immediate needs of economic growth still overweigh the need torestrict GHG emissions. The ‘invisible hand’ of the market has neglected so far toaccount indirect cost of carbon emissions. It undervalues environmental goods andservices, and favors the near term gain over the long-term sustainability,demonstrating no concern for future generations. According to the market logic, if theexternality has no monetary value there is no economic incentive to minimize the‘external’ costs of pollution. On that account, to compensate for the market failure, aneconomic incentive for emissions reduction must be put in place. Hence, setting up apricing regime, i.e. establishing rights or permits to pollute the atmosphere is a marketresponse to the risk posed by climate change. Market approaches are often perceivedand positioned as an alternative approach to public regulation and to cooperativeapproaches. Although as for the established carbon market within climate regimethese mechanisms often work in combination.Bäckstrand and Lövbrand (2006) had argued that Kyoto Protocol and marketmechanism is an evidence of ecological modernization discourse prominence as anapproach to tackle climate change. According to them the weaker version ofecological modernization dominates current climate regime debate (Bäckstrand andLövbrand, 2006).Flexible mechanisms of Kyoto protocol and voluntary schemes likewise reston the Coasian solution for the tragedy of the commons, which advocates for creationof property rights for the commons, whether private, state or collective and trade ofthe resulting property rights (Turner et al., 1993). Potentially harmful consequences ofeconomic activities on the environment constitute an externality, ‘an economicallysignificant effect of an activity, the consequences of which are borne by a party orparties other than the party that controls the externality producing activity’ (Turner et14

al., 1993). The GHG emissions are a model example of negative externalities,explained by the negative impacts of production and consumption activities that arenot directly reflected in the market price (Pindyck et al., 2001). Anthropogenic GHGare the externalities of economic growth and climate change consequently appears tohave arisen from, as Stern review calls it, ‘the greatest market failure the world hasseen’ (Stern 2006). From the economic perspective adopted for GHG offsettingpractices, the issue of externalities can be addressed through command-and-controlregulation, quantity-oriented market approaches, tax- or price-based regimes, orcombination of all three approaches (Hepburn, 2007; Liverman and Boyd, 2008,Nordhaus, 2006). The weak version of ecological modernization shares thiseconomic-centered view on GHG emissions.Meanwhile a wide range of scholars have raised the issues of true values ofnature, problems of global inequality and inherited undemocratic nature of privateownership to manage nature among others within GHG emission market mechanisms(Liverman, 2008). Detractors of the market approach have argued that the flexiblemechanisms commoditize atmosphere in a manner that allows dubious projects andthe exchange of “hot air” and impede the fundamental structural change required. Theopponents of market-based approaches argue that the cost and pricing of carbon iscontroversial. EU ETS that had almost collapsed recently is the evidence thatdemonstrated how present carbon market lacks transparency, homogeneity andatomicity and access to accurate information to allow all participants to make wellinformeddecisions, thus, contributing to unequal distribution of potential carbon tradebenefits. In general, the effectiveness of market regulation can be challenged due tothe inherent imperfections of the market, which functions efficiently only underperfect conditions. These arguments represent strong ecological modernization viewson GHG emission markets.3.2 CARBON MARKETS BASICSIn order to consider the effects of voluntary offsets in the region of Sub-SaharanAfrica, it is useful to look at, first, how carbon finance regime is structured and whatdrives market demands and, secondly, how compliance and voluntary markets relate.The following section provides a brief introduction to market mechanisms anddiscusses the specifics of carbon market development in the region.The term ‘carbon market’ refers to the trading of emission permits that have beeneither distributed by a regulatory body or generated through GHG emissions reductionor carbon sequestration projects (Bayon et al., 2008). The constant growth of themarket has been recorded since the market-mechanism was introduces (WB, 2008;Ecosystem Marketplace 2008). In 2008 CDM accounted for 1,600 MtCO 2 e and VCMfor 105 accordingly, while the remaining was split among other mechanisms (WB,2008; Ecosystem Marketplace, 2008).Two key building elements of carbon markets are cap and trade schemes andproject-based mechanisms. The regulatory-driven emissions markets are createdthrough cap- and trade schemes. The quantity of emissions that market participants15

are permitted to release is defined or capped by the regulatory authority, which alsoassigns an amount of tradable allowance units equal to the cap. Actors who reducetheir emissions beyond required levels can sell unused allowances to otherparticipants of the market who did not meet emissions quotas assigned to them(Bayon et al., 2008). Actors who aim to reduce the system’s total environmentalimpact can purchase, and retire, meaning no longer trade, tradable allowance units(Bayon et al., 2008). Most of existing or proposed cap and trade schemes allowparticipants to meet their emission reductions targets through purchasing carboncredits originating from projects in sectors or regions not covered by the cap and tradescheme.The greenhouse gases emissions market that has expanded over the last decadeis divided into compliance and voluntary markets. The compliance market organizedunder the regulations of the Kyoto Protocol and the Marrakech accords to theUNFCCC includes three financial mechanisms: carbon trading, Joint Implementationand Clean Development Mechanism. The Kyoto Protocol’s Clean DevelopmentMechanism was initially envisioned as the mechanism that would connect carbonfinance and sustainable development objectives in developing countries. CDM hasemerged as an instrument that aims to attract new financing opportunities forsustainable development in the developing world while assisting developed countriesto meet their emissions targets to avert the effects of climate change (Fenhann, et. al,2004). The basic idea of CDM is simple: developed countries can invest in abatementopportunities in developing countries where costs may be lower and receive creditsfor resulting emission reductions (Fenhann, et al., 2004). From a global climateperspective, it does not matter where mitigation activities are carried out. This couldreduce the need for developed countries to invest in more expensive mitigationprojects domestically (Fenhann, et al., 2004).The compliance market (namely CDM and JI) and voluntary carbon market areessentially parallel markets operating under the same conceptual basis, but withdivergent regulating structures. However, the voluntary market, as a less formalizedplatform for carbon transactions, is rather a complimentary than alternative carbonmarket that in fact predates Kyoto-based mechanisms. Moreover, the regulated andvoluntary markets complementary in some areas and overlapping in others. Thus,credits generated by compliance project-based mechanism (both CERs and ERUs) aswell as Voluntary/Verified Emission Reductions (VERs) can be sold in the voluntarymarket. It also covers the areas not addressed by CDM enabling low-incomecommunities and underrepresented regions to participate in carbon markets, providingmore flexibility for channeling private investment into projects benefiting ‘carbonsmart-development’. The voluntary market does not operate under a universal cap andtrade scheme and most carbon credits purchased are project-based transactions(Bayon et al., 2008).In both the regulatory and voluntary markets, GHG emission reductions aretraded in carbon credits, which represent the actual reduction of GHG equal to onemetric ton of carbon dioxide (tCO2eq), the most common GHG. Carbon credits arethe result of a specific project aimed at emissions reduction or carbon sequestration.16

The global warming potential of each gas is determined in terms of its equivalent intons of carbon over the course of 100 years (Bayon et al., 2008).3.3 VOLUNTARY MARKETThe voluntary market has grown in response to the increased demand forcarbon credits outside the Kyoto Protocol compliance market and is more informalthan the compliance one. The volume and value of credits traded on the voluntarymarket is far smaller than in the compliance market of the Kyoto Protocol. Eventhough VCMs represent a small proportion of the carbon market as a whole it is arapidly growing market. Similarly to the compliance schemes, there are two types oftransactions in the voluntary market: allowance-based and project-based transactions.The over-the-counter (OTC) market constitutes the largest portion of the voluntarymarket. All carbon credits purchased under OTC scheme are project-basedtransactions (Bayon et al., 2008). The smaller portion of the market represented byallowance-based transactions is covered by the national cap and trade developingschemes such as Chicago Climate Exchange (CCX) or Japanese Voluntary EmissionsTrading Scheme (JVETS), for instance. Allowance-based sector of the VCM is notcovered by the present study.Figure 3. Carbon Markets Volume of Transactions in 2007, 2008.Source: adapted by author from Ecosystem Marketplace, New Carbon Finance, Point Carbon,World Bank.Ecosystem Marketplace (2008) report estimates that the entire OTC markettransacted 42.1 million tCO2e at a market value of US$258.4 million in 2007, upfrom 2006 transaction volumes and market value of 14.2 million tCO2e and US$58.5million, accordingly. The compliance markets also have experienced much highertransaction volumes and market value compared to the previous periods, however, inthe past years OTC markets are experiencing faster growth (194%) than regulatorymarkets (77%) (Ecosystem Marketplace, 2008). In 2007 OTC market experienced thetripling of transactions and the trends continued for the 2008 (EcosystemMarketplace, 2008). Thus, most of the analysis and debate to date have assumed thatdemand for carbon offsets will be high (Wara & Victor, 2008) and thereforedeveloping countries that host such projects will necessarily earn useful revenues. At17

the same time as the downward trend of voluntary carbon prices and transactedvolumes during January and February 2009 signifies, the OTC segment is to beaffected the most by the financial downturn (New Carbon Finance, 2009). Theconsumer and voluntary nature of the demand that drives the market can explain it.18

3.3.1 REGULATORY CONTEXTUnlike the compliance market, the voluntary schemes do not rely on legallymandated reductions (Bayon et al., 2008). There is no emissions cap to drive carboncredit demand, and no regulatory body attempts to unify VERs across project types,standards, prices, or transaction volumes. The voluntary market governance system ismore horizontal and networked; with no central formalized regulation. The lack ofstandards, deficit of uniformity and transparency in the voluntary market has led toskepticism regarding credibility of the offsets produced under the voluntary offsettingschemes (Harris, 2007; Taiyab, 2006). In order to address the criticism and ‘to makemarket more investor-friendly’ (Bayon et al., 2008) stakeholders involved in thesector introduced over a dozen of voluntary offset standards in the past few years,designed registries and attempted to document the size of the market. There areseveral voluntary standards adopted so far, including the Gold Standard, whichprovides guidelines on sustainable development among other aspects for the CDMunder Kyoto Protocol and has a parallel scheme for the voluntary market.Implementation of self-imposed standards represents a form of self-regulation asopposed to compliance market and is under development at the moment. Severalstudies that cover various features of standards are available (Kolmuss et al., 2008a;Kolmuss et al., 2008b; Merger, 2008). This study only considers standards applied foridentified projects in the region of Sub-Saharan Africa.3.3.2 SUPPLY, DEMAND AND ACTORSThe voluntary segment of the market is currently operated by a number ofbusiness companies and non-profit organizations in North America and Europe(Harris, 2007; Sterk & Bunse 2004). Those companies invest in carbon-reductionprojects both in industrialized and developing countries and sell the emissions creditsto buyers and final consumers in the industrialized ones. The voluntary marketrepresents purchases of carbon credits by organizations or individuals who are notlegally obliged to generate any emissions reductions, or those, willing to haveemission reductions above what is legally required. Therefore, being under no legalconstraints governing the kind of emission offsets that they purchase, they can beflexible in deciding on the type of carbon credits they buy, source of credits oramount of credits. VCM, which is not limited by 2012 timeframe, when the Kyotoprotocol expires, might be more appealing to private funds that try to avoiduncertainty of post-Kyoto regime.Generally, the VCM is driven by consumer demand (Bayon et. al., 2008;Harris, 2007; Ecosystem Marketplace, 2007, Taiyab, 2006). Nature of the demand onVCM differs from compliance market, as purchasers are interested in projects thatrespond to the goals of their CSR programs or individual values (EcosystemMarketplace, 2007). Consequently, the offsets provided through the voluntaryschemes are rather driven by CSR concerns or individual intentions to reducepersonal footprint, rather than necessity driven and highly dependent on consumer19

preferences. This aspect of VCM projects is an interesting counterpart to CDMprojects. Investors committing to the emission reduction with the goal of benefitingtheir CSR programs tend to avoid large projects involving questionable technologies,like large dams or HCF-23 destruction projects and require more qualitative emissionreduction credits (WB, 2008). The World Bank (2008) reports that sustainabledevelopment concerns and demand for emission credits with stronger co-benefitoutcomes are greater amongst private sector investors than public sector entities.Private sector investment is driven by the need to demonstrate to shareholders andfinal consumers stronger sustainability outcomes. Another interesting aspect is thatagainst the common opinion that the very nature of the voluntary markets stimulatesinvestment in innovative and uncommon for compliance mechanisms approaches(Harris, 2007), voluntary credits buyers tend to purchase offsets that most closelyresemble those of the compliance market (Ecosystem Marketplace, 2008).Carbon offsets generated by voluntary projects are referred to as VERs 3 andare eligible for carbon credits in voluntary markets. Due to the unregulated andfragmented nature of the VCM, VERs sources are diverse and embrace a vast array ofproject types, including renewable energy, energy efficiency, agriculture, forestry andother land use (AFOLU) activities, methane capture, and geological sequestration. Amajor difference between the Kyoto market and the voluntary carbon market is thatex-ante credits can be generated in the voluntary market. In contrast to ex-post credits,ex-ante credits account for the future biological CO 2 -fixation.On the demand side, the majority of buyers are businesses in the USA and the EU(including final purchasers, intermediaries, aggregators and investors), with additionaldemand from the public and NGO sectors, and from individuals (Bayon et al., 2008).VCM creates opportunities for wider engagement of various actors into carbonmarket. On the supply side VCM can reach project types and regions that are at themoment outside the scope of compliance market. It also allows private sector to pursemore diverse projects, creating room for innovation and is attractive in the areaswhere high transaction costs or other factors impede project development (Bayon etal., 2008).With respect to the opportunities VCM market offers to Sub-Saharan Africa, aslightly higher proportion of credits sourced from Africa has been recorded: 6% vs.3% for CDM projects (Ecosystem Marketplace, 2007). In 2007 if compared to 2006,the percentage of projects sourced in Africa declined both in market share (6% to 2%)and, which is more important, in absolute terms (Ecosystem Marketplace, 2007).However, the advantages offered by VCM can similarly turn into thedrawbacks. Lack of transparency, absence of unified standard procedures, unclear3 The use of professional jargon can make understanding of voluntary market principles a tricky exercise.Therefore, it is important to clarify terms and definitions used in the paper. Terms such as ‘emission reductions’,‘voluntary emission reductions’, ‘verified emission reductions’, ‘offsets’, ‘offset credits’, ‘voluntary carbon units’and ‘verified carbon units’ are used almost synonymously in the literature. However, there are differences in theapplication and meaning of these terms. The term VER is used for the purpose o this study. Verified EmissionReductions (VERs): A unit of GHG emission reduction that has been verified by an independent auditor. Thisdesignates emission reductions units that are traded on the voluntary market (Bayon et al., 2008).20

aseline calculations procedures and methodologies, issues of additionality, leakageand efficiency in the emissions reductions achieved, as well as risk management areoften named as factors that may restrain participation of market actors aiming toinvest in projects delivering ‘high-quality” ERs. Furthermore, as the current economicdecline has clearly demonstrated, the expensive credits from the projects providingadditional environmental benefits or designed to benefit the living standards ofcommunities in developing countries are the most affected by recession, with theamount of sales of credits plummeting 70% during the first two months of 2009compared with the last two months of 2008, according to the environmental researchfirm New Energy Finance (2009). This indicates the risk of reliance on VERs as asource of sustainable development finance, due to the unstable demand and pricevolatility, as well as the political uncertainties about the future of carbon offsets.21

4. EMPIRICAL FINDINGSBefore I turn to evaluating conceptualizations of sustainable development, Iwill devote some attention to assess and explain characteristic attributes of voluntaryGHG emissions market in Sub-Saharan Africa as revealed by this study. Withoutgoing into details about findings for each of the independent projects, I will highlightthe most significant details and will comment on established trends.4.1 VOLUNTARY MARKET DEVELOPMENT TRENDS IN SUB-SAHARANAFRICAThe present study identified 68 voluntary market-based projects (Annex V). Itcovers projects in progress, in pipeline and under development (Figure 4). Theprojects are located in 21 country of the region, with a largest number of 13 located inSouth Africa 4 . 15 projects are located in Kenya, Tanzania or Uganda, indicating EastAfrica as another attractive destination for investment. Madagascar hosts 6 projects.4.1.1 GEOGRAPHICAL DISTRIBUTIONstudied region.In terms ofgeographical distributionmajority of the projects (76%)are located in the countrieshosting CDM projects as well.Only 16 cases were identifiedto be located in the countriesother than for CDM projects.Currently, there are fewgrounds to call VCMcomplimentary to CDM withregards to geographicaldistribution in relation toAccording to the survey responses, the projects located in Sub-Saharan Africaare appealing to the project developers due to the unique opportunities the locationprovides. As put by one of the interviewees:“ African region offers the whole spin of benefits. Additionally to green house gasesremovals it offers co-benefits we will not be able to find here in UK” (PC, 2009a).4 While this study acknowledges that South Africa differs significantly from the majority of other countries in theregion with respect to economical, political and institutional conditions, for the simplification of analysis itincludes it in the studied region.22

Furthermore, motivation for pursuing the project in the region can beattributed to the type of project developer. As stated by another survey participant thereason for developing projects in Africa is that “this is where the greatest needs are”(PC, 2009c). It is also seen as a disadvantaged region where “there is less access [toelectricity], more restrictions and more needs” (PC, 2009c). Therefore it can beclaimed that this type of project developers are driven by the “do good” reasons.Equally the same reasons of greater need make Sub-Saharan Africa an attractivedestination for the private company’s investments for their CSR programs purposes.Additionally, selection of individual countries might relate to the previous businessconnections as in case of FACE Foundation project (PC, 2009b). Thus, this meansthat the region is attractive for project developers looking specifically for otherbenefits, but not only GHG reductions.Figure 5. Projects Distribution by Country.Source: devised by author based on own inventory.According to the survey responses the majority of the projects weredeliberately developed for the voluntary market, while only 4 projects were claimedto aim for CDM initially. As survey respondents could select more than one option or“benefit” whenexplaining theselection of VCMapproach, theresults presentedby the Figure 6 arethe share of eachoption compared tothe whole sample.The flexibility ofthe VCMmechanism, aswell as the project23

size, was mentioned as major factors determining approach preference. According tothe interview results VCM schemes in the context of Sub-Saharan African countriesare ‘more relevant’ (PC, 2009b) and ‘softer when it comes to business, withoutreliance on strict regulation’ (PC, 2009c) while CDM provides more guarantees (PC,2009b). It is also seen as a more suitable approach for small-scale projects (PC,2009c). Moreover, 24% of responses indicate the low transaction cost of voluntarymarket mechanisms as an advantageous factor. However, in most of the casesrespondents who mention low transaction cost among the reason of selectingvoluntary approach do not apply any standard at all or apply the low-priced option.Besides that investors and project developers preferences are linked to thetypes of projects that Sub-Saharan Africa has to offer.4.1.2 PROJECT TYPESAfrica, unlike Asia that dominates compliance market at present, has fewindustrial carbon credits to deal in, whereas it is recognized as a potentially significantsource of land use, land use change, and forestry credits (WB, 2008). LULUCF 5 is thearea where Africa’s comparative advantage lies in the carbon markets (EcosystemMarketplace, 2008; WB, 2008). Moreover, while the new forestry regime is beingdebated, the voluntary OTC markets are currently the only source of carbon financefor avoided deforestation.In general VCM has a higher proportion of forestry credits out of total markettransactions if compared to CDM (36% vs. 1% for CDM). Taking into accountecological conditions and the structure of economy in the region, it could be expectedthat most of the projects are constituted by LULUCF type of projects. However, basedon the current studyinventory, it is onlythe second largestproject type. 43%of the projects arecovered by energyefficiency projects,with the majorityaiming at domesticenergy efficiencyimprovements andrepresented byvarious types ofimproved/efficientcook stovesprojects and a fewlighting efficiency5 LULUCF a greenhouse gas inventory sector that covers emissions and removals of green house gases resultingfrom direct human-induced land use, land-use change and forestry activities (UNFCCC, 2009).24

improvement projects. These kinds of projects, as well as forestry projects, have astrong community-based component. The amount of ERs projects claim variestremendously from 0-200 tCO 2 eq generated annually to 6 mln tCO 2 eq generatedduring the project life-time. ERs volumes from energy efficiency projects are small,while volumes of ERs coming from afforestation/reforestation activities aresignificantly larger. Although, it is hard to draw a comparison between the projectsizes and ERs volumes generated, since the credit providers apply different time-linesand there is no possibility to compare the scale based on the volumes of ERs claimed,the forestry-based project outnumber energy efficiency ones in the amount of ERsgenerated.Nevertheless, an important conclusion here is that possibility to invest inprojects that appeal to values of the final buyer is an important driver in thedevelopment of the market. As said by the president of Wildlife Works, on theoccasion of launching the first REDD 6 offset project under the Voluntary CarbonStandard in Kenya:"If you had a choice between carbon credits generated when a commercialfactory pig farm reduces its toxic methane emissions, or carbon credits from athreatened natural forest that brings with them protection of elephants, lions, cheetah,giraffe and 54 other large mammal species which one would you prefer?” (MikeKorchinsky, 2009).Afforestation/Reforestation projects, differing in scale and in amount ofemission reductions they claim to deliver, range from tree planting by two localschool groups in Northern Namibia to several thousands hectare plantation programunder the reforestation projects in Kibale National Park and Mountain Elgon inUganda. There is evidence that carbon sequestration projects are designed with an aimto provide necessary financial assistance for forestry conservation in Africa. VERsgeneration for the majority of projects of this type is rather seen as a source forgenerating additional financial flows for the restoration or conservation activities thana primary aim. This signifies that such kind of projects can be an example ofinvestment for sustainable development. However, one should be very accurate inclaiming their contribution to local sustainable development for that reason that whilecontributing to environmental dimension of sustainability, they might pose a threat toother aspects of local sustainability 7 .Renewable Energy Projects vary from Mad'Eole 1.2 MW wind energy plant inNorthern Madagascar and small-scale hydropower installation in Zambia to6 Reducing Emissions from Deforestation and Degradation (REDD) is a mitigation mechanism for developingcountries under UNFCCC.7 Thus, for instance, reforestation project in Kibale National Park in Western Uganda has started in 1996 ascollaboration between the Uganda Wildlife Authority and FACE Foundation (Netherlands). To date 415 hectaresof forest have been planted. In 1998 Climate Care has joined the project, assisting in provision of carbon financethrough trading VERs. However, the project has a record of violation of indigenous peoples rights. (Lang &Byakola, 2006). The people indigenous to Mount Elgon have been evicted as a result of project activities. SGS'sPublic Summary acknowledges that in order for the UWA-FACE project to continue, more evictions will have tobe carried out. This questions the overall sustainability of the project25

community-based Microsolar Lighting project for Malawi, and providing water solarheating for the local community in Eritrea. This category of projects also includesprojects providing solar-powered cook stoves for communities. These projectsprovide attractive environmentally sound technology options for electricity industry,however, the scale gives little grounds to talk about significant investment inrenewable energy sector. The projects aim to utilize locally available resources andexpertise, like for instance Jatropha oil project in Mali as well as create employmentopportunities. Yet renewable energy projects require significant investment at theinitial stage and expertise, their project development stage is time-consuming and,thus from this perspective they are less attractive for the investors. It has to bementioned though, that these types of projects have a strong emphasis on socialcomponent of development.4.1.3 ACTORSProjects generating GHG ERs are developed in various ways, but the generalscheme is the following: project idea is generated, carbon finance is acquired, projectactivities performed, resulting emissions verified according to one of the standards togenerate carbon credits, carbon credits are sold to retailer or final buyer.Deals may be as simple as mutually agreed upon credit transactions betweenproject developers, who own the credits and intermediate or final purchasers.However, the process often involves multiple actors including project developers,verifiers, aggregators/wholesalers who typically deal with bulk transactions, retailerswho generally sell small amounts to final consumers represented by individuals ororganizations, and brokers who facilitate transactions between sellers, buyers andother intermediaries. Credits are usually traded not through the exchange, but directlyfrom the project developer or reseller webpage or can be purchased on eBay, forinstance.Project developers include local businesses, non-profit organizations, localNGOs and international NGOs (Figure 7). Project operators include local privatecompanies, local governments, and international non-profit organizations, local andinternational NGOs. The most common pattern followed by the dominating majorityof the project involves foreign project developers, who also seek to attract finance forthe project activities and ensure that the credits are verified. In 12 cases projectdeveloper operates project in cooperation with local partner (private company, NGO,research or governmental institution). Local and industrialized country governmentsmay also act as project partners (for instance, German Ministry of Environment,Eritrean Ministry of Energy and Mines) as well as local and foreign researchinstitutions.Finance for project activities comes from private investment (either from not-forprofit or private business) and financial resources generated through VERs trade.Quite often project developer acts as project finance provider. Evidence ofrequirements for financial additionally of the projects, can be observed for themajority of the projects, however, the requirements differ depending on the type of26

project developer. As stated by co2balance, for instance, the company only invests inprojects that are at least 50% funded by carbon-offset payments (2009).Generated ERs and co-benefits are subject to the third party verification in themajority of cases. Projects are validated by UN-accredited monitoring agencies suchas the SGS, TÜV or DNV or one of the voluntary standards or independent experts 8 .A participatory methodology on carbon assessment and monitoring program by localcommunities has been established within one of the projects. Corporate and individualbuyers (PC, 2009b), social institutions, governmental agencies, retailers and creditaggregators purchase the credits.Local communities act as service providers generating carbon credits throughprojects and in afew cases ascredit owners.Credits in themajority of casesstudied areowned either bythe internationalprivate company,NGO or nonprofitwho act asa projectdeveloper orretailer. A localprivate company was identified as 100% owner of the generated carbon credits in asingle case of Tanzania Carbon project only. There has been one identified case ofcommunity owned business in a form of established micro-enterprise. Only in a fewprojects local communities receive direct payments originating from their projectrelatedactivities. For instance, TIST program in Kenya, Tanzania and Uganda,ensures quarterly payments to the farmers on the basis of the number of trees theymanage. Monduli Forest Project in Tanzania also ensures direct payments to thecommunities. Such ownership model can be attributed to the relatively early stage ofmarket development in the region. It is seen as a necessity for upfront investment,however, there are few cases indicating the early transition to the local ownershipapproach. Thus, for instance, co2balance, a UK-based project developer and creditowner, is currently working on establishment of micro-franchise model in Tanzaniaand Kenya, ensuring that carbon credits generated reward direct beneficiaries (PC,2009a). Another example of project benefits distribution is community trust fundfinance established to develop infrastructure in the community, such as schools andhealth posts establishment in Mozambique. Likewise, there are precedents of trust8 There are few examples of verification accomplished by the independent panel of experts. In the case of EritreaEfficient Wood Stoves Project (Climate Mundi) verification of reductions is done by Berkley Laboratory, projectsdeveloped by Blue Venture rely on TICOS independent verification and management service and are example ofin-house verification.27

funds establishment to channel funds from the sale of carbon offsets to individualfarmers, so they act as direct beneficiaries.In terms of property rights and land tenure, there are only few cases indicatinginclination to address the issue, through ensuring robust legal tenure for the localcommunities, which results in project benefits distribution in the community.4.1.4 CHALLENGES AND BARRIERSMarginal participation of Sub-Saharan Africa in the carbon markets is oftenseen as a consequence of a market mechanism with carbon savings as the primemover, which attracts private capital to the projects areas where the investment risk isthe lowest and regulatory stability and implementation capacity are the greatest. Inaddition, transactions cost per unit of VERs are considered to be higher for thesmaller projects common for the region.However, there was no strong evidence found confirming this assumption.Only one survey respondent mentioned high transaction cost as a barrier in projectdevelopment. Another respondent identified the lack of knowledge on operation ofVCM in the region as a barrier, while the others claimed that there are no specificchallenges they are facing in project implementation that can be attributed to theregional conditions. In a contrast to the various challenges CDM is facing in theregion this apparent non-existence of barriers 9 should suggest favoring VCMapproaches in the region. However, the difficulties in obtaining initial investment arethe defining factor in project development. High transaction cost pose difficult taskfor local project developers and result in a need for intermediaries.The price based on project location as reported by Ecosystem Marketplace(2008) survey for the VER sourced from Africa lie in the mid-range. However, theprice depends on the project size and the credits sourced from the larger projects arecheaper in general for VCM projects as well (Ecosystem Marketplace, 2008). There isalso a significant difference between the standards applied for projects: VERsgenerated by projects verified according to GS are more expensive than the ones thatdo not apply any standards. However, the price of VERs generated by projects locatedin Africa, should neither be seen as impeding projects development in the region.4.2 CONCEPTUALIZING SUSTAINABLE DEVELOPMENTThe next section will illustrate how sustainable development is conceptualizedby a number of voluntary standards and discuss how market actors interpret it, callingon the survey and interviews conducted, and project documents examined.Having differing discourses and elements that constitute them in mind, I shalldiscuss how project developers and operators frame ‘sustainable development’.9 As perceived by the respondents.28

Determining narratives employed by the actors and observing how agents in the fieldinterpret the term is highly relevant for the exploration of the meaning of definition.The fundamental dimensions of the sustainable development concept and the varyinginterpretations of the criteria and indicators of sustainable development can beidentified within the carbon markets on the projects level. It has to be emphasized,however, that regardless of what definition of sustainable development stakeholdersstated they apply or how they define co-benefits, this does not necessarily mean that ittranslates into the project activities or is being applied in the uniformed way, even bythe same project developer but in different projects.First, I will evaluate the meaning assigned to sustainable development conceptby taking a closer look at the findings related to respondents’ proclaimedorganizational values and interpretation of the concept.4.2.1 A STAKEHOLDER’S PERSPECTIVEWhile 27% of survey respondents perceive sustainable development benefitsas more important than GHG ERs delivered, 73% accordingly, consider both ERs andco-benefits provided by the project to be of the same importance. This means that cobenefitsare perceived as crucial to project development.In the survey of project developers, most respondents stated that they basetheir definition of sustainable development contribution on how it is defined by thestandard, host country requirements were also referred to as the guiding principles fordefining sustainable development framework for the project, while one respondentidentified the ‘core goal of the project’ as determining potential contribution tosustainable development. Since discourse analysis places a great emphasis onlanguage, it is interesting to see that, even though respondents refer to sustainabledevelopment as ‘essential part’ (PC, 2009c) of their project activities, however, whenasked they are unable to define what constitutes sustainable development in theiractivities. ‘We have no definition of sustainable development or sustainableapproach’, stated one of the interviewees, while still referring to the companyperformance, as ‘we are sustainable’ (PC, 2009b). They go on acknowledging, that atthe initial stage of the project activities criteria for co-benefits ‘were very broadlydefined and no explicit criteria is applied at the moment’ (PC, 2009b) and projectsare, accordingly, expected ‘to be sufficient, sustainable and bring social benefits’ (PC,2009b). The majority of project developers refer to ‘contribution to sustainabledevelopment’ in very general terms. Thus, for instance Swiss offset provider MyClimate claims that all their ‘carbon offset projects are required to make a positivecontribution to sustainable development in their respective regions’ (My Climate,2009). They declare that ‘all three dimensions of sustainability – environment,economy and society - need to be taken into account’ (My Climate, 2009). However,they leave criteria definition for the standard applied. One responded, whileemphasizing the social benefits and community focus of the project, mentioned thatthe company looks ‘for the projects that offer something more than triple-bottom line29

approach’ 10 (PC, 2009b). This indicates a strong social emphasis of many VCM-basedprojects, when compared to the corporate nature of CDM.In a number of cases ‘sustainable project’ means rather a financialsustainability, than providing sustainable development benefits in its Brundtland orany other connotation. The same respondent stated that along with ‘economicbenefits’ the investment brought by the project has ‘a large influence on the region’and sustainability is ensured through ‘continuity’ by establishing nurseries andinvolving local community (PC, 2009b). That being said so; it might be assumed thatthe temporal aspect is indirectly acknowledged as a contributing factor tosustainability of the project.While discussing the criteria employed for defining sustainable developmentbenefits provided by the projects, respondents were referring to the host countryrequirements and requirements provided by the standard applied, including SD matrixprovided by GS (PC, 2009a). Similar results were obtained with regards ofsustainable development assessment; however, very few projects were described asconducting any assessment of sustainable development. In cases when it wasaccomplished, assessment was performed based on the guidelines provided bystandards. One of the respondents claimed ‘an ongoing monitoring and surveys byentrepreneurs on the ground’ to be employed as an assessment tool. One respondentreported regular stakeholder consultations as an assessment tool. Two respondentsstated that sustainable development benefits are not assessed.While discussing other than emission reduction benefits respondents refer tothem as ‘additional benefits’ or ‘co-benefits’ which are constructed through thefollowing categories as ‘created employment’, ‘development of local business’,‘bringing electricity to underprivileged’, ‘improved air quality’, ‘better health’,‘biodiversity conservation’. It is clear that the meaning of sustainable development isconstructed through the concept of benefits. The elements constituting both WEMDand SEMD are witnessed in conceptualizations by project developers and operators.However, strong emphasis on technological solution in framing of VCM-basedprojects in developing countries of Sub-Saharan Africa signifies the prevalence of thelater.4.2.2 A STANDARD’S PERSPECTIVEAs respondents and interviewees emphasized the importance of standards inframing the sustainable development concept, I shall turn now to how standardsconceptualize sustainable development and its benefits. The following sectionpresents the results of discourse analysis application to the guiding documents of 8standards utilized for the projects included in the study inventory. The standard10 Triple bottom line approach is a corporate approach to sustainability and as, John Elkington who originated theconcept defined it is "(at) the heart of the emerging value creation concept is a recognition that for a company toprosper over the long term, it must continuously meet society's needs for goods and services without destroyingnatural or social capital" (cited in Norman & McDonald, 2003).30

documents where analyzed with an aim to identify key elements of the discourses. Iwill conclude by placing standard under one sustainability discourse or the other.SGS, KPMG and ICROA procedures are not covered by the current analysis,since the projects that used to employ these procedures are in the transition to one ofthe standards described below. Forestry Stewardship Council (FSC) principles areapplied for 5 projects by Prima Klima, who doesn’t follow the Kyoto Carbonaccounting rules and applies its own catalogue of criteria to finance projects. FSC isnot a standard for certification of GHG emission reductions in the voluntary market;therefore it is not a subject of the analysis for the present study. VCS, VER+ andWBCSD/WRI CHG Protocol Initiative focus on GHG reduction only and do notrequire projects to have additional environmental or social benefits. Accordingly,neither sustainable development impact nor co-benefits are defined. Due to thisreason they were not included in the discourse analysis but are considered to becoming from WEMD, with a strong focus only on cost-efficiency in delivering GHGERs. Independent verification of GHG emission reduction in most of identified caseswas accomplished by a third party (an external auditing company like KPMG or SGS)or by a panel of experts invited and approved by a project developer as in case withTIST and TICOS. Sustainable development or sustainability benefits are not defined.However, community’s development is considered to be important for projectapproval. Nevertheless, experts do not verify the benefits, but only GHG reductions.It was not possible to identify elements constituting any sustainability discourse.Thus, this type of verification is not classified by this study.Figure 9. Projects Distribution by Standard.Source: devised by author based on own inventory.31

Five standards out of 11 applied were judged to address sustainabledevelopment or its aspects. The results of analysis are summarized in the Table 2 anddiscussed below.Table 2. Elements of Sustainability Discourses Covered by Standards.SEMDWEMDSDDECOLOGICALINSTITUTIONAL/SYSTEMICCOMMUNICATIVEDEMOCRATICINTERNATIONALDIVERSIFYINGECONOMICALTECHOLOGICALINSTRUMENTALTECHNOCRATICNATIONALUNITARYSYSTEMS PERSPECTIVEON 3 PILLARSSOCIAL JUSTICEINTER- AND INTRA-GENERATIONAL EQUITYCOOPERATION/PARTNERSHIPHUMAN DEVELOPMENTEDUCATIONNESTEDSYSTEMS/LOCAL/GLOBALVGS Plan Vivo Carbon Fix CNP CCBSSDDEFINITIONno definition,no definition, but providesbut provides guidelinescriteriano definition,but providesguidelinesSource: devised by author based on own analysis.The Gold Standard is the only one standard that has a definition of sustainabledevelopment. The Gold Standard refers to the definition of sustainable developmentas set out by the Brundtland report (GS, 2008): ‘development that meets the needs ofthe present without compromising the ability of future generations to meet their ownneeds’. Projects aiming for GS crediting must show clear sustainable development cobenefits(GS, 2008). It emphasizes the responsibility of project developers to assistsustainable development based on the standard requirements, at the same time leavingroom for defining sustainable development aspects to be included in the assessment.‘Do no harm’ approach serves as guiding principle for sustainability assessment underGold Standard. It refers to the Millennium Development Goals, safeguardingprinciples of the UNDP as leading the assessment. (GS, 2008; UNDP, 2009) Guidingquestions for ‘do no harm assessment’ are provided by the standard and cover issues32

of human rights, uniqueness of indigenous people, involuntary resettlement, culturalheritage, freedoms of associations and rights to collective bargaining of employees,forced or compulsory labor, child labor, any sort of discrimination, workenvironments, precautionary approach, conversion or degradation of critical naturalhabitats and corruption (GS, 2008). The GS sustainability matrix serves as guidancefor project developers and includes a set of 12 indicators that cover three dimensionsof SD: environment, social development, economic and technological development(GS, 2008). Stakeholder participation and EIA are required. As one can see from thesummary of the results presented in the Table 2 the elements constituting twodiscourses can be seen in a way GS frames sustainable development. It scores themost under SDD, and covers the elements that SEMD and SDD share. However in itsnature it is instrumental, since it is rather based on idea of cost-effectiveness and otheraspect serves the purpose of cost-effectiveness. Impact assessment can be considereda good example of its instrumental approach towards sustainability. SD impact isevaluated based on a sum of ‘positive, neutral, and negative impacts’ and the projecthas to contribute positively at least to two categories and can be neutral to the thirdone to be judged as beneficial for sustainable development In this way it allows acertain trade-off and can not be consider ed to have truly systems perspective view.Thus, I have categorized it as belonging to the SEMD. However, there is no evidenceof truly system perspective essential for sustainable development discourse.Likewise, Plan Vivo demonstrates elements of both SDD and SEMD and has avery strong emphasizes on delivering community benefits. Plan Vivo address theissue of land tenure and user right and implicitly emphasizes, that they must be secure‘so that there can be clear ownership, traceability and accountability for carbonreduction or sequestration benefits’ (Plan Vivo, 2008). Plan Vivo Certificates canonly be generated through activities where communities or individuals haveownership of the carbon credits, therefore, the community participation is seen as keyat all project stages (Plan Vivo, 2008). Plan Vivo provides list of standards andindicators that projects must employ to provide evidence of positive environmentaland community benefits through a participatory community approach (Plan Vivo,2008). Therefore, based on these factors among others I classified it as sharing theviews of SEMD with a strong emphasis on a social pillar in an interpretation morecommon for SDD.Carbon Fix Standard focuses exclusively on projects on ‘land-use changewhich converts from “no forest” to “forest”’ (Carbon Fix, 2008). Projects aiming forthe CFS should be able to concurrently deliver real and traceable CO 2 certificates tothe carbon market. Projects under the CFS must evidence positive impactsconsidering the environmental and socioeconomic parameters established within thestandard framework (Carbon Fix, 2008). Even though it is claimed by the standardthat ‘only through the successful integration of ecological, social, and economicalvalues is it possible to set-up and maintain a climate forestation project certified bythe CFS’ and it shows strong evidence of ecological elements, it was found to belongto WEMD.Carbon Neutral Protocol is not an offsetting standard, but rather a type of ecolabelingand is focused on small-scale community type offset projects. Neither33

sustainable development nor other benefits are defined. However, environmentalimpact assessment and social impact assessment are listed among technicalrequirements for CNP projects. CNP was attributed to WEMD.Climate Community and Biodiversity Standard accepts projects that ‘aredesigned to deliver robust and credible green house gas reductions” and that are‘likely to achieve significant climate, community and biodiversity benefits’ (CCBS,2008). It aims at the projects that ‘protect biodiversity and promote the sustainableeconomic and social development of communities”, and assumes that ‘such projectscan bring sustainable livelihoods to local people through the diversification ofagriculture, soil and water protection, direct employment, the use and sale of forestproducts and ecotourism’ (CCBS, 2008). Although, sustainability and sustainabledevelopment benefits are mentioned in relation to forestry management neithersustainable development nor co-benefits are defined by the standard. However, itidentifies criteria and indicators to be put in place for assessment of projectcontribution to each section (climate section, community section, biodiversitysection). Projects aiming for CCBS must demonstrate that they will ‘do not harm’ tovarious members of communities and stakeholders that potentially can be impacted byproject activities (CCBS, 2008).To sum up, the main finding here is that only GS defines sustainabledevelopment, it frames it in conventional interpretation shared by sustainabledevelopment and ecological modernization discourses. The overlap of discourses ofSDD and SEMD in relation to interpretation of sustainable development explains that3 standards reveled elements attributed to both discourses at the same time. Twostandards evidence WEMD view on sustainability. Three methodologies out of 11examined demonstrate their conceptualization of sustainability through settingindicators and criteria for selected pillars. The other 8 methodologies have a vagueinterpretation and view on sustainable development, while claiming to deliver benefitsother than GHG reductions. This is considered to signify the GHG emissionsreductions as the main priority for the standards, and, thus indirectly reveal theassociation with WEMD view on sustainability. The strong version of EMDmanifested also through the focus of indicators that are set by the standards. Anotherinteresting finding is that 2 standards out of 11 have specifically stated the aim of‘operating or planning to operate in the developing countries to promote sustainabledevelopment’ (Carbon Fix, 2008).4.2.3 A PROJECT’S PERSPECTIVEOn a project level ‘sustainability’ is likewise constructed through the conceptof ‘benefits’ or ‘co-benefits’, which are framed through a set of indicators. Indicatorsare expressed in narratives. This section will look at the narratives employed to definethe indicators. The project documents, survey results and other material available 11were analyzed. The narratives describing indicators or ‘benefits’ were accumulatedand categorized. Thus, 11 categories judged to be dominating or being of an interest11 Project web pages, publications, information presented in the registries.34

for analysis were assigned. The narratives considered to share the same meaningformed the categories 12 . The results are presented in the Figure 10. It is apparent thatsocial values expressed through ‘income generation’, ‘poverty alleviation’, ‘improvedstandard of living’ and ‘improved health’ are a critical elements in construction of cobenefits.However, they are viewed from perspective of contribution to national orregional economic development. Environmental values are reflected in strong focuson ‘reduced or avoided deforestation’, ‘biodiversity’ and ‘soil/water/air quality’.Although there is a valid conservational focus, this is a place where environmentalvalues and economic values collide. Natural resources are also seen as a commodityand a source of carbon finance. Technology transfer mentioned in 7.4% of theprojects signifies the technocratic approach to handling environmental problems.Capacity building is an important element for 10% of the projects indicating theinstitutional element characteristic of SEMD. An interesting finding is that a numberof projects mentioned its contribution to women empowerment and women securityas indirect co-benefit delivered by the project. Overall, the projects analysis revealedthe predominant conceptualization of sustainable development and ‘co-benefits’characteristic for WEMD. However, elements attributed to SEMD are also present toa lesser extent. SSD manifesteditself in an emphasis for humandevelopment, well-being andeducation. Nevertheless, its presenceis marginal.In addition to the analysis ofco-benefits conceptualization,projects were further analyzed withan aim to define their affiliationwith one or another sustainabilitydiscourse. Scores were assigned to aproject based on the number ofdiscourse elements reveled in theproject related documents. 13 For25% of the projects covered by theinventory it proved to be impossibleto identify affiliation with anydiscourse due. The results of the analysis are presented in the Figure 11 14 .Figure 10. Dominating Categories Identified at the Project Level.Source: devised by author based on own analysis.The 46% of the projects revealed elements characteristic of WEMD (AnnexVI), which confirms with the conclusion on dominance of WEMD view onsustainability on a project level presented above. Strong reliance on market12 For instance, category ‘income’ includes ‘economic well-being’, ‘benefits for low-income communities’,‘reduced expenditure on fuels’, ‘income generation’, ‘additional income’, ‘regular incomes for the poorcommunities’, ‘household income increase’ and etc.13 As summarized in the Table 1 for ecological modernization discourses and as described by Dryzek (1997) forsustainable development discourse.14 Based on Annex VI.35

mechanism, technological solutions and no attention paid to institutional change wouldimply that project solidly reflect the WEMD understanding of sustainability.36

5. DISCUSSION5.1 SUSTAINABILITY CONTEXT OF CARBON FINANCEThe recent development in a number of GHG emission reduction approacheshas inevitably led to a debate around several issues, including additionality ofreductions, fairness and inequality. Contribution of GHG emission reduction projectbasedactivities to sustainable development is at the centre of debate. This sectionturns from explaining the undermining principles of carbon finance mechanism anddescribing critical features of emission reduction projects in Sub-Saharan Africa todiscussion on the issue of sustainability in relation to market mechanisms.In the context of climate change regime, the Kyoto Protocol does not specifywhat ‘sustainable development’ stands for. Moreover, the differences between Southand North interests in relation to the development and growth translate intocontrasting views on the goals and objectives of the global climate regime. Thishinders the progress in creating an all-inclusive definition of sustainability that can bebroadly agreed upon both on macro- and micro-level of the regime. In this way twoprevailing interpretations of sustainable development based on market and regulationcooperatively converge within the climate debate. When it comes to the market-basedmechanisms of climate regime there is no commonly accepted definition forsustainability on specific project level either. The argument for not precisely defining“sustainable development” stems from the fact that it is individual host countries’prerogative to assess whether proposed CDM project meets national SD objectives, aswell as to develop nationally appropriate CDM approval procedures with regards tosustainable development. Thus, each country can choose own specific criteria forsustainable development. This way of interpretation can be explained by the fact thatthe concept originated from Brundtland report cannot be transferred directly to apractical level, as well as by the lack of clarity about the underlying values andperspectives of the notion of SD when applied to the climate change regime (Grist,2008). Nevertheless, it is implied that if the project contributes to sustainabledevelopment on a micro-level, it will have a marginal effect on sustainabledevelopment at a macro-level in accordance with the criteria set (Olhoff et al,undated). However, on a mechanism’s level several authors identify an inevitabletrade-off between cheap emission reductions and sustainable development as one ofthe main problems with the CDM (Ellis et al., 2007; Olsen 2007; Olsen and Fenhann,2008; Pearson, 2007; Sutter and Parreño, 2007; Schneider, 2007). This has itsimplications for defining sustainable development within the VCM, as it to a greatextent follows the practices set by CDM.Significantly less attention has been paid to the VCM contribution tosustainable development if compared to the research on CDM. Yet VCM-basedprojects perceived level of integrity includes GHG emission reductions, reducedadverse environmental impacts, and socio-economic benefits delivered to localcommunities and host countries. This perception is mainly based on assumption that37

voluntary markets enable more direct finance for small community-oriented projectsand address underrepresented markets in terms of project types and regions. It isclaimed that VCM allows for a greater participation from African countries(particularly through LULUCF projects) (WB, 2008). However, with the large USAshare of the market (Ellis et al., 2007) and still rather marginal participation ofAfrican countries, it is difficult to claim that the voluntary market is in fact promotingan equitable distribution of project across the world at the moment. It is often arguedthat environmental integrity and provision of co-benefits are more likely to beattributed to the smaller projects (Bayon et al., 2008). Indeed, this generalization doesnot always hold true and the views on contribution to sustainability vary greatlydepending on the criteria set for assessment. In contrast to the rather common idea,the size of the project is not the exclusive advantage of VCM-based project in termsof contribution to sustainable development. Small-scale projects, often assumed toreach communities and small landowners in developing countries and provide greatersustainable development benefits, happen almost in the same proportion in bothschemes, but in absolute terms the CDM supports more of these projects (Ellis et al.,2007). Therefore, it cannot be claimed, that size of the project is definitive for theactors seeking for the greater sustainability benefits and that the smaller scaleinevitably ensures better sustainability performance. In this way, the main argumentsfor better performance of VCM-based projects in terms of contribution to SD aremore likely to be linked to the drivers of the market, since consumers define thequality of the provided offsets and, thus, indirectly define the co-benefits.In fact, VCM aims to deliver ERs at the lesser cost in a first place and cobenefitsare seen as a marketing tool adding value to the VERs generated. In otherwords, co-benefits provide the offset retailer with a competitive advantage and bringmore profit. As seen from the analysis presented, about 70% of project developersinvest in projects for the purpose of their CSR policy. Importantly, there is evidenceof other type of project developers who utilize VCM opportunity to generate financefor conservation and community development activities. Thus, for them VCM is asource of carbon finance for development. The question that remains is if VCMprojects financing is capable of delivering sustainable development to the region.The impact of VCM projects and their effective contribution to sustainabledevelopment are greatly influenced by sustainability conceptualization, evaluationand assessment instruments applied. Thus, the absence of operationalized criteria orindicators for sustainability or definition of co-benefits results in ungrounded claimsof delivering additional benefits. It is fundamental that project developers claiming todeliver additional benefits or sustainable development co-benefits have sustainabilityguidelines and approval procedures to follow. However, as this study reveals there isan overall lack of understanding among project developers of the concept ofsustainability. It has been witnessed that meaning of sustainable development isforemost constructed through the set of indicators or criteria for three dimensions ofsustainability. Indicators and criteria are ill-defined in the majority of cases, with afew exceptions. The project developer reliance on provision of definition by standard,another set of problems arises, since as it can be seen from the analysis above themajority of standards translate the values of WEMD. Institutional dimension, as wellas temporal and spatial dimension, is very rarely operationalized on the project level.38

However, very few standards provide clear guidance on the indicators ofsustainability and assessment of sustainable development benefits.It seems to be indisputable that one’s interpretation of sustainability is valuejudged. Thus, identifying whether particular project meets the objectives ofsustainable development becomes difficult, if not impossible task. Since the veryconcept of sustainable development is based on needs, its definition in ecologicallymodern understanding encourages individuals to project their own values and needsinto the concept. As emphasized by Dryzek ‘actors recognize that the terms of thisdiscourse should be cast in terms favorable to them’ (1997, p. 124). In the case ofVCM in Africa the actors present on the market define the sustainability, anddominantly translate values of WEMD. The local business elites and northernorganizations determine the types of projects they invest in, own generated credits,while claming it to be a win-win solution, thus, are determinant for an existing viewon sustainability. Regardless the findings reflecting strong social focus andencouragement of stakeholder participation, we should be careful to additionallyconsider the impact that it might have on actual translation of local views onsustainability. Given these facts, it becomes evident that as long as there is flexibilityin defining sustainability and sustainable development co-benefits, the actors willadopt the SD definition based on their currents needs.5.2 CARBON CREDITS FOR SUSTAINABILITY OR SUSTAINABILITY FORCARBON CREDITS?The interpretation of sustainability has its implications for the very idea ofcarbon finance. Until the VCM promotes economic and technocratic centered versionof sustainability, ignoring institutional change needed, the carbon finance will not besustainable itself and will be dependent on outside investment and technologytransfer. There is a strong need for institutional transformation, capacity building andhuman development in order for African continent to change its role from limited roleof service provider to an active market participant. Indeed, giving the ownership tothe projects and credits to local stakeholders is not enough. As it has been alreadydiscussed before the capital for initial investments for project development is difficultfor local actors to obtain. Financial system in the majority countries of the region isinadequate; access to financial services on the continent is very limited (ADBG,2009). Thus, there is a need for obtaining carbon finance form other sources, whichare likely to come in a form of foreign private investment. This holds true for bothtypes of projects, those seeking to gain profit from carbon credits and those who usecarbon trade for generating additional finance for biodiversity conservation andcommunity development activities.The existence of global market for GHG emissions does not necessarilytranslate into the financial flow for the countries of South. First, positive developmentoutcome depends on how the market is structured and how it operates, atinternational, national and local levels. Secondly, it is hard to judge upon the volumesof transaction and estimate the volumes of carbon development investments;39

therefore, there I have little grounds to say that VCM can be a sizable source ofprivate finance for carbon development. I relate it to the fact that that the carbonmarket in general, and voluntary based carbon offset transaction, represent relativelynew development. One of the promising findings is that the nature of offsetsgenerated by VCM-based projects in the region is different from those of CDM. Theyare strongly focused on social development, employ small-scale community-orientedapproach with an aim of self-reliance and attract private investment from socialinstitutions and individuals. Thus, they can be considered as finance aiming for highquality of development. Even though, the participation of African countries in currentVCM is limited so far, it represents one of the sources of private investment fordevelopment in the region. VCM is providing an opportunity for Africa to enhanceflow of carbon finance from private sector to the continent, but it has to develop.6. CONCLUSIONSIn this thesis I aimed to uncover how the voluntary market-based projects cancontribute to channeling carbon investment to Sub-Saharan Africa and the sustainabledevelopment potential they claim.Several conclusions follow from the observations and data. The firstconclusion is that there is very little evidence to say that there are significant financialflows originating from VCM for Sub-Saharan Africa. With regards to geographicaldistribution VCM can hardly be called supplementary to CDM. Even thoughcountries in Sub-Saharan Africa are attractive for the project developers aiming forthe delivery of ancillary co-benefits, the region is unlikely to fully benefit fromcarbon market through VCM due to the limited role of service provider it plays at themoment. Nonetheless, there appears to be significant amount of projects that aregenerating finance for conservation activities and community development throughcarbon finance opportunities provided by VCM. The types of projects and types ofproject developers prevalent in the region revealed strong social and recourseconservation focus suggests that it has considerable potential to attract privateinvestment through carbon finance for poverty alleviation and natural resourceconservation initiatives. Large proportion of forestry projects indicates that expertiseand experience needed for utilizing the opportunities the region has in relation toLULUCF and potentially REDD initiatives exists.Secondly, despite the reveled tendencies of strong emphasis on resourceconservation and social dimension of sustainable development, as well as trends inpromoting community-based approaches, this study suggests that the current VCM inAfrica can mainly provide sustainable development benefits rooted in the views ofweak ecological modernization. At present the economical benefit outweighsenvironmental and social values. There is very little tendency for institutional change.The study has not identified evidence of truly systems perspectives within thecurrent VCM approaches. While there are some signs of integrating principles ofSEMD and SSD, it is still unclear whether these efforts will scale up. Regardless of40

evealed importance of such aspects of stronger ecological modernization discourse, asstakeholder participation and solid ecological focus, I have doubts that this signifiesmore equitable terms of benefits distribution and institutional change needed. It seemsto be unavoidable conclusion that with respect to understanding and translatingsustainability into practice, VCM is dominated by the weak ecological modernizationapproach.Finally, voluntary market for GHG emission reductions is essentially anemerging market, but not a mechanism for financing sustainable development. Thus,only countries that have capacity to benefit from it will be able to exploit thisopportunity. This also means that those that lack financial capital and institutionalcapacity might be left aside.41

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8. APPENDICESANNEX I. List of Organizations Contacted for the Survey.# Company Name1 Action Carbone2 ADES3 American Forests4 Atmosfair5 Bäume für Menschen - Trees for the World6 Blue Ventures Carbon Offset7 C Level8 Carbon Clear9 Carbon Footprint10 Carbon Impacts11 Carbon Me12 Carbon Neutral13 Carbon Offsets Ltd14 Carbon Positive15 Carbon Tanzania16 Cleaner Climate17 Climactis18 Climat Mundi19 Climate Care20 Climate Neutral Group21 Climate Stewards22 co2balance23 CO2OL24 CO2Solidaire25 Ecotrust26 Envirotrade27 First Climate28 Flying Forest29 Good Planet30 Grow a Forest31 Live Climate32 Love Trees33 My Climate34 Offsetters35 PACE36 Planetair37 Prima Klima38 Project Preparation Trust of Kwazulu-Natal39 ProNatura40 Pure Trust41 Reforest the Tropics42 SKG Sangha43 Solar Aid44 Solar electric fund45 Stiftung Natur- und Artenschutz in den Tropen46 Sunfire47 Sunseed Tanzania48 Sustainable travel international49 Target Neutral50 TerraPass51 The Climate Trust52 The Greenbelt Movement53 The Hunter Foundation Rwanda gov54 The Nature Concervancy55 TIST The International Small group56 TreeBanking57 Treeflights58 Trees for cities59 Trees for the futureTrees for travel/Face foundation6061 World Land Trust49

ANNEX II. LIST OF ORGANIZATIONS IDENTIFIED AS INVOLVED IN THEPROJECTS DEVELOPMENT OR OPERATION IN SUB-SAHARAN AFRICA.# Organization1 Atmosfair2 Action Carbone3 Blue Ventures Carbon Offset4 Carbon Clear5 Carbon Impacts6 Carbon Me7 Carbon Neutral8 Carbon Positive9 Carbon Tanzania10 Climat Mundi11 Climate Care12 Climate Stewards13 co2balance14 Envirotrade15 FACE Foundation16 First Climate17 Flying Forest18 My Climate19 Pace20 Primaklimaweltweit21 Reforest the Tropics22 Solair Aid23 Climactis50

ANNEX III. LIST OF INTERVIEWEES.PC – Personal Communication (2009a, April 20). Phone Interview with Mark Rigby,Global Sales Director, co2balance, UKPC – Personal Communication (2009b, April 21). Phone Interview with MartejnSnop, FACE Foundation, Projects Manager, The NetherlandsPC – Personal Communication (2009c, April 21). Phone Interview with Katie Bliss,Project Manager, Solar Aid, UKPC – Personal Communication (2009d, May 11). Phone Interview with Dr. Karl PeterHasenkamp, Prima Klima Weltweit, GermanyANNEX IV. QUESTIONS FOR INTERVIEWS AND QUESTIONNAIRE.1. What motivated you to develop a project in the region of Africa? What made itattractive for your company/organization? Did you have any particular reason?2. Why the voluntary market scheme was selected?3. What standard do you apply for monitoring, verification and certification ofgenerated credits?4. Did you experience any challenges/difficulties in projectdevelopment/implementation in Africa? Anything that you can attribute to thespecifics of the region? What are the barriers you can identify?5. Who is a project developer?6. Who owns the credits generated by the project?7. Who are the buyers of your credits?8. How is it important for you that the project provides co-benefits?9. Are co-benefits defined for your projects? If so, please, describe how.10. Is sustainable development defined for your projects?11. What criteria (if any) are employed for identifying/assessing/describing sustainabledevelopment benefits in your projects?12. Is sustainable development impact assessed for your project?51

ANNEX V. PROJECTS INVENTORY DATABASE#12ProjectTitleHostCountryEfficientcookstoves in BeninBeninProjectTypeEnergyEfficiencyGreen Powerfrom crop Burkina Faso RenewableEnergyresiduesProjectStart/ProjectPeriodQuantityEmissionReductionsPprojectDeveloper/Operato Standardrn/a n/a CLIMACTIS (France)10 years5,000tC02eqannumGoldStandardProject Partner: GermanGoldper Ministry of Environment,StandardAtmosfair (Germany)StageUnderDevelopmentUnderDevelopmentYouth Outreach -localNorthwestAfforestation &3 Cameroon CameroonReforestation n/a n/a partner, Carbon Men/a In progress(UK),CEPICReforestation(Cameroon)200,000–5004 Côte d'Ivoire Afforestation &SunshineVCSReforestation n/a ,000 tonUnderTechnology/Carbon (intended)/FCO2eq perDevelopmentPositive (Int)SCannum180Congo Kikwit5Reforestation DR Congo Afforestation &Reforestation 50 years PrimaKlima-WeltweittCO2eq pern/a In progress(Germany)annumDirect provider ofcarbon finance: CarbonEnergyEnergy 2009- 29,500 Clear Limited (UK), Gold In pipeline,6 Efficient Cook DR CongoEfficiency 2011 tCO2eq total Project proponent: Standard listed under GSStovesMercy Corp (UK)789KinchellaSolar StovesDR CongoEritreaefficient wood EritreastovesDisseminationof ImprovedStoveEritrea(Mogogo) inDebub Zonein Eritrea10 Eritrea11Solar WaterHeating in EritreaEritrea12 EthiopiaRenewableEnergyEnergyEfficiencyEnergyEfficiencyEnergyEfficiencyRenewableEnergy200720032008-20182002-20092004-202451,720 Carbon Impacts (UK)n/atCO2eq total previously supported30.000tC02eqannum8,680tCO2eq totalIn progressClimate Mundi (France), VERper Berkley lab - verification (independent In progressof reductionsverifyer)MyClimate(Switzerland), NGOVision (Eritrea) - projectdeveloper;SchweizerischesGoldStandardIn progressEritrea (SUKE) -Project investor2.100.000 Carbon Neutral (UK),tons tC02eq Ministry of Energy and CarbonNeutrIn progress(8,200 Mines (Eritrea) - project al Protocolcontracted) partnerSupported by:ÖkozentrumLangenbruck(Switzerlan1,725VER - expertd), My ClimateIn progresstCO2eq totalpanel(Switzerland). TheEritrean companyTesinma Sh. CoAfforestation &Reforestation2007 n/a Carbon Me (Int) n/a n/a13ClimateStewardsTree Planting GhanaProject ARocha GhanaAfforestation & 2006-Reforestation 2010400,000 A Rocha Ghana,CCBAtCO2eq total Climate Stewards (UK)In progress141516ImprovedHouseholdCharcoalStovesGhanaGyapaImprovedStovesGhanaGhanainGhanainSustainableCommunity KenyaTree PlantingEnergyEfficiencyEnergyEfficiency2007-2017n/aAfforestation & 2004-Reforestation 2018655,629tCO2eq89,804tCO2eq100,000+tCO2eq222, TÜV SÜD IndustrieService GmbH, ToyolaGoldEnergy Limited (TEL)Standard(Ghana), E+Carbon(USA)TUV Rheinland JapanGoldLtd. ClimateCare JPStandardMorganIn pipeline,listed under GSIn pipeline,listed under GSTIST"Quantifiers",TIST (USA), Carbon VER - meetIn progressClear (UK)therequirementsof CDM52

1718SustainableCommunityKenyaTree Planting,KenyaDakatchaWoodlandsKenya19 Biogas kenya Kenya202122232425262728KenyanEnergyEfficientStovesKenyaDragon TreeMadagascarRainforestMadagascarstoveprogrammeMadagascarEfficient homestoves in MadagascarSpiny ForestAfforestation &ReforestationAfforestation &ReforestationEnergyEfficiencyEnergyEfficiencyAfforestation &ReforestationEnergyEfficiencyEnergyEfficiencyHouseholdwaste in Madagascar Landfill gasMadagascarMad'Eole 1.2MW WindRenewableEnergy Plant MadagascarEnergyin NorthernMadagascarSolar andefficientstoves in MadagascarSouthwestMadagascarIntegratedBiomassEnergyConservationMalawiSolarAidMicrosolarLanternsProject forMalawiMalawiMalawi29 Cook Stoves Mali303132Jatropha oil inMaliMaliZambeziDelta CarbonLivelihoodsGorongosaNational ParkRenewableEnergyBiomassEnergyRenewableEnergyEnergyEfficiencyRenewableEnergy(1999-2004 -startedbyCreditperiod2004-2018n/a100,000+TIST)tCO2eq(f2004-2018)Carbon Clear (UK),TIST (USA)6,000,000Climate Stewards (UK)tCO2eq totaln/aCarbon Clear (UK)-previously supportedn/a n/a co2balance (UK)50 years560 tCO2eqper annumn/an/an/a2010-20172008-2014n/a2009-2018n/an/aMozambique Afforestation & 2007-Reforestation 2017MozambiqueAfforestation &Reforestation2001(pilotstart) -2006(creditsregistred)-2104TIST"Quantifiers",VER - meetIn progresstherequirementsof CDMCCBA In pipeline,(iunder listed underevaluation) CCBAVCS, GS,In progressCCB, CDMICROAstandard,Gold In progressStandard(intended)Supported by:PrimaKlima-Weltweit(Germany), Operator: n/a In progressNatur- und Artenschutzin den TropenBlue Ventures CarbonOffset, ssociation pour TICOS0-2 kton le Développement de independenttCO2eq per l'Energie Solaire verification/m In progressannum (ADES) and the anagementUniversity of Tulear, serviceMadagascar.24,000tCO2eqannumClimateCare (UK) not specificper sponsor, Operator: (VCS, VER, In progressAndrew Lees Trust or GS VER )Operator: Gevalor,120,000Supported by: Action VER+tCO2eq totalcarbon (France)12,530tCO2eq93,870tCO2eq250,000tCO2eq2700tCO2eqMad'Eole (Madagaskar) GoldStandardAssociation pour leDéveloppement del’Energie Solaire, NGO Gold(CH) - project developer, Standardmyclimate Foundation(INT)Hestian Innovation (UK) Gold- project developer StandardACG, SolarAid (UK)GoldStandard15 – 60 FirstClimateGoldtCO2eq per (International, US,Standardannum France, Switzerland)GoldCLIMACTIS (France)StandardIn progressIn pipeline,listed under GSIn progressIn pipeline,listed under GSIn progressUnderDevelopmentUnderDevelopment25,722,707Envirotrade (UK) Plan Vivo In progresstCO2eq total50,000tCO2eqannumOperator: SofalaProvincial Government,Supported by:CarbonNeutral (UK),Envirotrade (UK), PlanVivo (UK), EdinburghUniversity, EuropeaidperPlan Vivo(2003-2008). CreditsPurchasers:Envirotrade, TheCarbonNeutralCompany.In progress53

333435QuirimbasCarbonLivelihoodsProjectOndangwaNamibiaReforestationPlantingSchoolsNorthernNamibiaMozambique Afforestation & Operational sinceReforestation2003NamibiaininNamibiaAfforestation &ReforestationMozambiqueGovernmentDepartments,Traditional communitiesliving in the nationalA total of ~1 park, Envirotrade Ltd369 397 (UK)– an investor andVERs to be project developergenerated by responsible for projectPlan Vivothe1st year. management and the5th ~ 11 680 marketing and sale. .357; 10th ~ Envirotrade Ltd25 722 707.(Mozambique)responsible for allproject delivery in thecommunity. Bioclimate,Research andDevelopment .PrimaKLima_Weltweit,42 tCO2eq50 years Bäume Menschen -per annumoperatorAfforestation &Reforestation n/a n/a Omuthiya and Omboton/aPrimary School,Operator:OkangororosaCombined School,Supported by: FlyingForest (UK)n/aIn progressIn progressIn progress36Efficient FuelWood Stoves Nigeria EnergyEfficiency37 Senegal38GreencharcoalSenegalin Senegal39 Cook Stoves Senegal40414243ImprovedCookstoves in SenegalFatick RedionOptimisedSolar Drying SenegalIn SenegalQwa-QwaRoyal Natal South AfricaNational ParkFerncliffe-TshalanimithiNatureReserveSouth Africa10 yearsLernen Helfen Leben~ 30.000(DE) -developer, DARE GoldtC02eq per(Nigeria), Atmosfair - StandardannumfundingIn pipelineAfforestation &Reforestationn/a n/a TREE n/a In progressBiomassEnergyEnergyEfficiencyEnergyEfficiencyRenewableEnergyAfforestation &Reforestationn/an/an/aOperator: Pro Natura5,000 International, Supported GoldtCO2eq total by: Action Carbone Standard(France)15 – 60 FirstClimateGoldtCO2eq per (International, US,Standardannum France, Switzerland)2300CLIMACTIS (France)tCO2eq totaln/a n/a CLIMACTIS (France)GoldStandardGoldStandardIn progressUnderDevelopmentIn pipeline,listed under GSIn progress150 tCO2eq50 years PrimaKLima_Weltweit n/a In progressper annumAfforestation &Reforestation n/a 9,000tCO2eq totalSupported by: ClimateStewards (UK), ClimateStewards Carbon Bank,Ferncliffe - CCBATshalanimithi. Operator:A Rocha South AfricaIn progress44 South Africa Afforestation &The Sindisa FoundationReforestation n/a n/a on behalf of Flying n/aForest.BioTherm SPV2 (Pty)Ltd - private company,45project developer andLetabaBiomass toSouth AfricaBiomasssponsor, myclimate2007- 225,579Goldfoundation representedEnergyEnergy 2021 tCO2eqStandardby South PoleProjectCarbonAssetManagement Ltd * –private entity46EfficientLightingDurban, Kwa-Zulu Natal,South AfricaEnergyEfficiencyn/a4,000,000tCO2eq totalPhilips Lighting SouthAfrica, Cleaner Climate n/a(UK)In progressIn progressIn progress54

47EfficientLightingSouth AfricaEnergyEfficiency20055,000tCO2eqannumClimateCarepersponsornot specific(UK)(VCS, VER, n/aor GS VER )48CleanElectricitySebokengin South AfricaEnergyEfficiency2008-201858,000tCO2eq totalMyClimate (Switzerland)Planetair (Canada)GoldSustainable TravelStandardInternational (USA)In progress49505152535455565758Low-carbonliving in South AfricaBenoniEfficientHome Heating South AfricaProjectBasa MagogoSouth AfricaGranny FireSouth AfricaHeat-South AfricaRetentionCookersLight Up TheSouth AfricaWorldSouth AfricaStoveProgramme/SunFireMonduliForestProjectEnergyEfficiencyEnergyEfficiencyEnergyEfficiencyEnergyefficiencyEnergyEfficiencySouth Africa EnergyEfficiencyPilot TanzaniaAfforestationin grasslandareas ofUchindile,Kilombero, TanzaniaTanzania &Mapanda,Mufindi,TanzaniaKikondaForestReserveUgandaEnergyEfficiency10 years n/an/an/aPACE (SA) - projectn/adevelopersIn progressNova ResearchVER-KPMGOrganisation - projectIn progressauditsdeveloper,n/a n/a Carbon Impacts (UK)n/a n/a CO2Balance (UK)WBCSD/WRI verified(previouslyverified byIn progressKPMG). VCSverificationprocesspending.ICROAstandard,Gold In progressStandard(intended)n/a n/a FEDUP - NGO (SA) n/a In progressn/aefficient andsolar stovesDarfurEfficient Cook-Sudastoves2008-20140-200tCO2eqannumOperator:Solutions,perby: Blue VenturesCarbon Offset (UK)TICOSSunFireindependentSupportedverification/m In progressanagementservice180,000Carbon Clear (UK) VGS In progresstCO2eq total> 500,000CCBA (in theAfforestation &Reforestation n/a tCO2eq per Carbon Tanzania (TNZ) process of In progressannumapplying for)(1996)-Afforestation &2000-Reforestation20196,359,693tCO2eq totalAfforestation &Reforestation 2002- 213,368tCO2eq totalGreen Resources Ltd,subsidiary of TreeFarms CCBA (VERA/S (Republic of by SGS till In progressTanzania); TreeFarms 2005)A/S (Norway)Project developer:Global Woods AG,CarbonFix,Certifier: TÜV SÜDCCBAIndustrie Service GmbH(applied for)(TÜV-SÜD)In progress59Mount ElgonReforestation Uganda Afforestation & 1996-Reforestation 2046PrimaKlima-Welweit750 tons(Germany), FACECO2e pern/a(Netherlands), C Levelyear(UK)In progress55

60616263646566Reforestationin Kibale UgandaNational ParkTreesGlobalBenefits(TGB)ProgramUgandaUgandaefficientstovesUgandaefficientstovesForinUgandaUgandaUgandaUgandaEfficient Wood UgandaCook StovesUgandaEnergyEfficientStovesKawazaVillageUgandaZambiaAfforestation & 1996-Reforestation 2096FACE Foundation(Netherlands) project~16,600,000sposnor at the initialtCO2eq itotalstage, Climate Care(UK)Afforestation &Reforestation 2003 n/a ECOTRUST, BR&D andPlan VivoRainforest AllianceEnergyEfficiencyEnergyEfficiencyEnergyEfficiencyEnergyEfficiency2006-20082009n/a1,500tCO2eq total74,083tCO2eq totaln/an/a n/a co2balanceUrban CommunityDevelopmentGoldAssociation (UCODEA,StandardUganda), ClimateCare(UK)CentreforEntrepreneurship inInternational Health and GoldDevelopment, JP StandardMorgan, TUV RheinlandJapan Ltd.Climate Care (UK),CentreforEntrepreneurship inInternationalGoldHealthandStandardDevelopment (CEIHD)and Uganda StovesManufacturers Ltd -project implemenattorsSGS (In aprocess ofIn progressconversionto VCS)ICROAstandard,GoldStandard(intended)In pipeline,listed underPlan VivoCreditingPeriodcompletedIn progressIn pipeline,listed under GSIn progressAfforestation &Reforestationn/a n/a Flying Forest n/a In progress67ZengaminaMini Hydro ZambiaSchemeRenewableEnergy2008 - 2,9242023 tCO2eqClimateCare JPMorgan, North WestDevelopment Trust(Zambia) - host, PioneerGoldCarbon Ltd (UK), NorthStandardWest DevelopmentTrust (Zambia) - host,Pioneer Carbon Ltd(UK)In progress68SolarAidMicrosolarLightingProjectZambiaZambiaforRenewableEnergy2008-20183,600tC02eqSolarAid (UK),University of Zambia’sEnergyandEnvironmentalResearchGoldGroup StandardPeople’s Action Forum(NGO),HODI (NGO)In progress56

ANNEX VI. RESULTS OF PROJECTS DOCUMENTS ANALYSIS.# SEMD WEMD SDD123456789101112131415161718192021222324252627282930313233343536373839404142434445464748495051525354555657585960616263646566676857