Accessing Carbon Finance to Address Global Warming

The World Bank together with the Government of Uzbekistan conducted a workshop and clinic, “Accessing Carbon Finance”, in late January for government officials and local project developers who can potentially benefit from the Clean Development Mechanism (CDM) under the Kyoto Protocol.  While Uzbekistan ratified the Kyoto Protocol on October 12, 1999 this international and legally binding agreement to reduce greenhouse gas emissions world-wide only entered into force on February 16, 2005 after the minimum number of 55 countries ratified the agreement. 

Emissions of greenhouse gases are partly responsible for the rise in global temperature and the uncharacteristic global weather patterns.  The reduction of greenhouse gas emissions is a priority program under the Kyoto Protocol to avert the damaging consequences of global warming.  The World Bank is addressing the global climate change issue by promoting and supporting the development of qualified carbon projects through the Kyoto Protocol’s Clean Development Mechanism. Under the CDM, and subject to certain eligibility criteria, greenhouse gas emission reductions generated by a project in Uzbekistan can be sold to industrialized countries (and companies within these countries).  Carbon finance is the term commonly applied to such a transaction. 

The common greenhouse gases include methane and carbon dioxide. Given the resource intensive nature of the economy there are many potential opportunities for carbon projects in Uzbekistan including in the energy, oil and gas, chemical, and cement sectors.

Loup Brefort, Country Manager for Uzbekistan, commented: “The World Bank is very happy to support the efforts of the Government [of Uzbekistan] to participate in a concrete manner in global initiatives to address the harmful effects of greenhouse gas emissions.  We hope this workshop has contributed to a better understanding in Uzbekistan – in the Government and by potential project developers – of the Clean Development Mechanism.  We see great opportunities for Uzbekistan to benefit from additional financial resources for clean technology and environmental projects through the Clean Development Mechanism.  Uzbekistan should seize the opportunity presented by the Kyoto Protocol since the window of opportunity is short and Uzbekistan is facing stiff competition from countries that are already selling carbon credits and have well established CDM project pipelines.  The World Bank is determined to support the Government in moving this process forward and as Trustee for a number of carbon funds would be interested in buying carbon credits from eligible projects should the Government and developers confirm their interest”.

The carbon finance workshop had a high attendance spanning a broad cross section of Ministries and potential project developers. The workshop introduced participants to the carbon market, the role of the World Bank in supporting the Kyoto Protocol and how eligible countries and enterprises could benefit from the carbon funds managed by the World Bank.  The workshop also included sessions specific to the Designated National Authority (DNA), recently established in the Ministry of Economy, to assist them in implementing the Kyoto Protocol. 

After the workshop, a two-day clinic was conducted for registered project developers interested in pursuing carbon finance projects.  The World Bank team provided technical assistance to the registered clinic participants on processing and documentation requirements of carbon finance projects.

"The seminar with participation of the World Bank experts, who gained vast experience in CDM projects, showed the presence of perspective directions to work under the Kyoto Protocol.  It also allowed to select several CDM project proposals in oil and gaz industry, chemical and extractive industries, as well as in agriculture and communal services.  The clinic assisted project developers to further elaborate project proposals in compliance with the UN methodology”, - said Mrs. Saidova, First Deputy Minister of Economy at the end of the seminar and clinic.

More information available here.