Serbia and Montenegro 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. Experience shows that carbon revenues are typically available for projects that: increase the efficiency of power generation; decrease losses in power and gas transmission and distribution; make use of renewable energy technologies; and improve waste management and capture landfill gases. Opportunities also exist in the agriculture, land use and forestry sectors. 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. Ratification of the Kyoto Protocol - ratification of the Kyoto Protocol is necessary before Serbia and Montenegro can participate in project based transactions under the Kyoto Protocol. Serbia and Montenegro would also need to ratify the Kyoto Protocol before any payment could be made through an Emissions Reduction Purchase Agreement under one of the World Bank’s carbon funds. 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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