Carbon Finance: a New Weapon to Fight Poverty

Carbon Finance: a New Weapon to Fight Poverty

February 06, 2007

Initiative Aims to Channel "Green Investment"
From Developed Countries to China's Western Provinces


    BEIJING, China, Feb. 6 /Xinhua-PRNewswire/ -- Carbon
finance will be used to alleviate poverty and develop the
renewable energy sector in western China through a new
project launched today in Beijing between the United
Nations Development Programme (UNDP) and the Chinese
government. 

    (Logo:
http://www.xprn.com.cn/xprn/sa/20061107113358-34.jpg )
 
    Entitled "MDG Carbon: Carbon Finance for Achieving
Millennium Development Goals", the US$1.7 million
initiative aims to pilot carbon trading in 12 provinces,
build capacity and provide policy input for the expansion
of carbon market and reduction of greenhouse gas (GHG)
emissions in China. 
 
    "As highlighted in the recently issued Report of
the UN Inter-Governmental Panel on Climate Change, climate
change has emerged as one of the most important issues
facing the world," said Khalid Malik, UN Resident
Coordinator and UNDP Resident Representative in China, at
the launching ceremony.
 
    "Assisting China in its efforts to cope with the
impact of global climate change and to create more
sustainable, less GHG intensive development paths is an
important focus for UNDP. A range of market-based
instruments has now emerged to support this effort, with
carbon trading emerging as a major opportunity," he
said. 
 
    Carbon trading, through the Clean Development Mechanism
(CDM), is one of the ways that developed countries can meet
their obligations of reducing GHG emissions under the Kyoto
Protocol by investing in GHG emission reduction projects in
developing countries. 
 
    China now supplies over 1/3 of carbon credits to the
global carbon market established under the CDM. Currently,
however, there are few efforts in place to ensure that
"carbon credits" are used to benefit the poor, as
ongoing CDM projects often focus on "end of pipe"
solutions, by, for example, reducing GHG emissions caused
by chemical industry process. Many do not lead to
technology transfer or foster the development of clean
energy in China.  
 
    The 'MDG Carbon' initiative, by contrast, will use
carbon trading as a tool to generate income for
impoverished communities in China's western region by
increasing investment and job opportunities through
promoting "green" industry. It is part of a
global drive to achieve the Millennium Development Goals
(MDGs), a set of internationally recognised targets aiming
to eradicate poverty and ensure sustainable development by
2015.
 
    The 3-year project aims to establish CDM technical
service centres in 12 provinces, such as Xinjiang, Qinghai,
and Inner Mongolia.  These centres will act as brokers
between international investors and local partners to
kick-start "green" investment in China's less
developed regions.
 
    "The 11th Five Year Plan sets an energy
conservation target of reducing 20% of energy consumption
per unit GDP by 2010, along with targets for greatly
increasing use of renewable energy by 10%.  We hope that
CDM projects can contribute to achieve these ambitious
energy goals, "said Liu Yanhua, vice minister of
Science and Technology. 
 
    "The MDG Carbon Programme presents an innovative
market-based approach to attract large amounts of foreign
investment and establish public-private partnerships in
developing sustainable energy solution to alleviate poverty
and achieve Xiaokang and MDG goals." he added. 
 
    The programme is a joint effort between the United
Nations Development Programme (UNDP), the Ministry of
Science & Technology (MOST), and China International
Centre of Economic and Technical Exchange (CICETE) under
the Ministry of Commerce, with financial support from
Arcelor Mittal, the world's largest steel producer.  The
company also brings best practices in terms of energy
efficiency steel production, for which it has been a leader
in innovation. 
 
    UNDP fosters human development to empower women and men
to build better lives in China. As the UN's development
network, UNDP draws on a world of experience to assist
China in developing its own solutions to the country's
development challenges. Through partnerships and
innovation, UNDP works to achieve the Millennium
Development Goals and an equitable Xiao Kang society by
reducing poverty, strengthening the rule of law, promoting
environmental sustainability, and fighting HIV/AIDS.
http://www.undp.org.cn 


    For more information, please contact: 

     Ms. Zhang Wei
     Communications Officer,
     UNDP China 
     Tel:   [phone]
     Email: [e-mail] 


SOURCE  United Nations Development Programme