The CDM system is a good tool to use and could also have a significant role to play in climate work if used on terms and conditions that benefited both developing and developed countries.
The lack of climate fairness between developed and developing countries poses a threat to compromises in any prospective international climate agreement. The situation of developing countries is clear to see in the daily reports of flooding, drought and conflicts, which all have their origin in climate change and the lack of resources.
A consensus between developed and developing countries is an absolute prerequisite in any sustainable climate agreement.
The fairness issues must come higher up on the agenda in the negotiations that deal with the day-to-day issues, such as fair resource allocation, corruption risks and bureaucratic red tape. There is only one model that will solve these problems, and that is cooperation and trust. Cooperation and trust must be worthwhile and must exist on both sides of the negotiating table.
But at the side of the negotiating table and the development of the CDM system things are happening on the market that have largely gone unnoticed and which politicians and companies should begin to show an interest in.
We know that the EU’s trading system for emission rights covers around 12,000 industrial plants that answer for approx. 50 per cent of the EU countries’ total emissions. These include energy intensive industries like power producers, cement factories, steel industries and paper pulp industries, etc. Here it is only natural that their own energy efficiency programmes and use of resources become a vital part of the work to reduce emissions, enabling them to take their climate responsibility.
The CDM plays a minor part in this work but is nevertheless a crucial part of the system of emission rights, particularly with regard to developing countries. Today there are close on 1,000 CDM projects in 50 or so developing countries. Only 23 of these are in Africa. We need innovative forces to find methods that would facilitate the relationship between the local markets of developing countries and the large companies in the developed world.
Several large industrial players do not, by the look of things, have many business relationships with developing countries judging by their suppliers. However, companies that do have a large number of sub-suppliers in developing countries, such as IKEA, H&M, Coca-Cola, Marks & Spencer, Carrefour, ASDA, NIKE and Wal-Mart are not usually involved in developing CDM in the trading system.
But they have great knowledge of how to go about building relationships with local producers in developing countries. Many work with green supplier systems and sustainable development has been given priority in their marketing models for sustainable business. Increasing numbers of these multinational companies are demanding that their suppliers report their greenhouse gas emissions.
Cooperation between market players, in which the large emissions companies in the trading system learn from companies with many suppliers in developing countries, would:
1. Secure the quality at local level in developing countries
2. Reduce the risk of corruption and bureaucracy
3. Increase the interest in investing in climate projects also outside CDM in developing countries
4. Underpin sustainability work in developed as well as developing countries
5. Provide more quality CDM projects and thus increase trade
6. Generate market collaboration for more effective use of skills
This permits the utilisation of existing structures with good logistics, which would benefit many developing countries and increase the interest in an improved CDM system in which sustainable development is given improved status.
In this respect, the Business for Development – B4D developed by SIDA (Swedish International Development Cooperation Agency) can be a strong Swedish contribution to allocating resources to strengthen sustainable development in developing countries based on a win-win situation for both developing and developed countries. Furthermore, it would be a good Swedish contribution prior to the coming negotiations on a new internationally fair climate agreement.
Stockholm 24th of Maj