CDM board approves first transport methodology

The Executive Board of the United Nations Clean Development Mechanism has approved the first methodology for transport projects under the CDM, which could pave the way for large-scale carbon abatement in the long term, according to experts. The transport sector is a major source of greenhouse gas emissions, accounting for up to 25% of total emissions in many countries.

Market sources do not expect transport-type projects to make a dramatic entry into the CDM in the immediate future, but Kate Hampton, CDM advisor at specialist banking group Climate Change Capital, expects transport-type projects to gradually filter into the CDM, once the low cost/high return abatement projects - for example the industrial gases - have been exhausted.

She said that governments needed to 'provide more certainty about carbon value post-2012, because [otherwise] it would be very difficult for these projects to get off the ground'. 'We're talking about the de-carbonization of emerging economies, which is very important, and our view is that it would be desirable for governments to start thinking about how to encourage these types of project," she added.

But she cautioned that the issue of transport emissions, if to be dealt with effectively, will require multiple approaches. "With transport, CDM alone will not deliver. You'd need fuel efficiency standards and there are urban planning issues. But CDM will be able to deliver some of the carbon finance necessary to make cleaner options more attractive than dirtier options," she said.

This article appeared in Platts Emissions Daily on August 4, 2006.

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CDM board approves first transport methodology