London Market Initiative Progress on Company led facility to support project identification and preparation in Africa Martin Hession UK DNA

Requires a Focus on Opportunities Requires a Focus on Opportunities It is driven by competition and least cost It is driven by competition and least cost CDM dependant on identification of potential - emissions and emission growth CDM dependant on identification of potential - emissions and emission growth Significant Investment Barriers in Africa Significant Investment Barriers in Africa Need to focus on commercial opportunities and viable project opportunities Need to focus on commercial opportunities and viable project opportunities CDM is a Market

Worth $30 billion in 2006 Worth $30 billion in 2006 –EU ETS = $24 billion –CDM = $5 billion London Accounts for 50% of Trade London Accounts for 50% of Trade –Several Funds with capitalisation in the hundreds of millions – (Total £3 - 4billion) –Small niche funds Carbon Market Big Business motivated by profit – but Corporate Social Responsibility Carbon Market Big Business motivated by profit – but Corporate Social Responsibility CERS used for compliance across the EU ETS CERS used for compliance across the EU ETS –Use of Credits Traceable to Projects –Evidence that some companies will pay a premium for some classes of project London and the Carbon Market

Government Response to Framework Secretary of State statements calling on industry to respond to Nairobi framework Secretary of State statements calling on industry to respond to Nairobi framework Statements of Major industry associations Statements of Major industry associations Repeat call in Autumn Repeat call in Autumn Industry lead – with government support Industry lead – with government support Support includes trade networks Support includes trade networks –CCPO –UKTI

Vision: To boost Africas sustainable development and share in the CDM To boost Africas sustainable development and share in the CDMFocus Commercial focus Commercial focus Projects that suit local conditions Projects that suit local conditions Maximise value for the host country and community Maximise value for the host country and community Fair and transparent allocation to buyers Fair and transparent allocation to buyers City Initiative - Vision

The Springboard will be a for-profit sub-Saharan African CDM Project Development company. It will initially focus on developing CDM projects in sub-Saharan African countries where: The Springboard will be a for-profit sub-Saharan African CDM Project Development company. It will initially focus on developing CDM projects in sub-Saharan African countries where: –There is no DNA; or –There is a DNA but there are no projects The Springboard organization will assist CDM development in these countries by establishing CDM projects and, if necessary: The Springboard organization will assist CDM development in these countries by establishing CDM projects and, if necessary: –Working alongside Government agencies and Multilaterals to establish and resource a DNA –Working to establish locally applicable Methodologies –Completing PDDs and working them through the registration process Allocating the projects to end buyers through a fair and transparent allocation process that maximizes returns to the community that the project is in Allocating the projects to end buyers through a fair and transparent allocation process that maximizes returns to the community that the project is in Because of the difficulty and additional cost of developing projects under these conditions, the Springboard will initially be subsidized but expected to reach breakeven within [3] years. Because of the difficulty and additional cost of developing projects under these conditions, the Springboard will initially be subsidized but expected to reach breakeven within [3] years. Africa Springboard Proposal

Secretariat and Network of Offices Secretariat and Network of Offices Project Identification per quarter Project Identification per quarter To the greatest extent possible, offices will be borrowed from the Springboards funding partners at least until the enterprise becomes cashflow positive. To the greatest extent possible, offices will be borrowed from the Springboards funding partners at least until the enterprise becomes cashflow positive. Africa Springboard Implementation

Core Movers Core Movers –Standard Bank, Climate Change Capital, Shell Trading so far –Business Plan Developed –Support of several others –Interest of major foundations Looking for £1 million kick off Looking for £1 million kick off –Financial Contributions –Secondments/Project Preparation –In-kind Offices and Networks Look forward to reporting back at Bali Look forward to reporting back at Bali Progress so far

Review of Government Activities General General –Investment Climate Facility - £30million – dedicated to improving investment conditions in Africa Purchasing Purchasing Government Offsetting Fund - Offset Travel Emissions via CDM – Contract Awarded to EEA/TEP Government Offsetting Fund - Offset Travel Emissions via CDM – Contract Awarded to EEA/TEP Government Offsetting Standard – Proposing use of CDM Credits for Voluntary Offsetting – Controversial as many would prefer to pursue voluntary quantification Government Offsetting Standard – Proposing use of CDM Credits for Voluntary Offsetting – Controversial as many would prefer to pursue voluntary quantification Climate and Energy Focus Climate and Energy Focus –Environmental Transformation Fund £800 million, Initial £50m to Forestry Congo Basin – Details under development and negotiation. –Support to Clean Energy Investment Frameworks of WB and AFDB Access to Energy Carbon Finance Adaptation NetworksNetworks REEEP Network – Renewable Energy and Energy Efficiency Policy Network. 11% of Projects in AfricaREEEP Network – Renewable Energy and Energy Efficiency Policy Network. 11% of Projects in Africa Biofuels Partnership – Brazil- SADC (Mozambique-South Africa) – Exploring MethodologiesBiofuels Partnership – Brazil- SADC (Mozambique-South Africa) – Exploring Methodologies Global Opportunities Fund FCO – Support to Methodological Development –Global Opportunities Fund FCO – Support to Methodological Development –