FYR Macedonia has the potential to generate millions of dollars in carbon revenue over the next three to five years by leveraging investments in the energy, waste, forestry and agricultural sectors. These opportunities can be realized through: Implementing Projects that Reduce Greenhouse Gas Emissions or Enhance Sequestration - OECD countries are expected to purchase between 0.5 and 0.8 billion tonnes of emission reductions through investments in projects that reduce emissions of greenhouse gas or enhance sequestration. In FYR Macedonia about 70% of greenhouse gas emissions are generated in the energy sector. Carbon revenues are potentially available for projects that: introduce renewable technologies or cleaner fuels; promote energy conservation and efficiency in the domestic, commercial and public sectors; switch from electric heating to gas or district heating in the domestic and commercial sector; reduce fuel consumption in the transport sector; improve fuel use and heat recovery in the industrial sector; improve waste and agricultural management; and increase the absorptive capacity of forests. While carbon transactions do not address the underlying financing needs of a project, experience has shown that future cash flows from carbon finance enhance the viability of a project. Since carbon revenues are typically payable in strong currencies by buyers with high credit ratings, these revenues can be used to increase a financiers’ confidence in a project and to leverage additional capital from IFIs and others. Timing is Critical - The window of opportunity is rapidly closing due to uncertainty in the carbon market at the end of 2012; the first commitment period under the Kyoto Protocol. The bulk of project based transactions are targeted at meeting OECD compliance needs up to 2012, emphasizing the need for quick action given the long lead time between project preparation and the ‘first yield’ of emission reductions. The World Bank Can Help to Realize These Opportunities - The World Bank is Trustee of a number of carbon funds comprising public and private buyers. US$1 billion of funds are currently under management, targeted at project based transactions and the purchase of surplus allowances that have been “greened”. Through its experience in the market, the Bank brings to the table its ability to mobilize in-house and external expertise, links to sources of funding and technical support for carbon project development and supervision. The Bank supports host country capacity building through its CF-Assist (grant) program and training provided by the World Bank Institute. Further information is available online [www.carbonfinance.org] and through:
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