Assessing the appropriateness of carbon financing for micro-scale projects in terms of capabilities

Abstract

Micro-scale development projects are currently underrepresented in global carbon markets. This paper outlines the process of becoming eligible to generate carbon credits and examines some of the barriers that may inhibit access to carbon markets. In particular, it focuses on barriers relating to the capacity and resources of the organisation developing the project. This approach represents a deviation from the standard discourse which has traditionally focused on barriers relating to the availability of up-front finance and the capacity of local public and private sector institutions required to participate in the carbon standard certification process. The paper contains an analysis of the carbon offset project cycle from which follows a discussion of potential capacity- related barriers focusing on time, skills and resources. Recommendations are made as to how these may be overcome with a particular focus on the role of technical organisations in assisting project developers. Completed during 2012 this research comes at an interesting time for global carbon markets as the Kyoto Protocol’s first commitment period ended in 2012 and negotiations have failed to produce and agreement that would commit major emitters to reductions targets from 2013 onward. Despite this, reducing greenhouse gas emissions has gained momentum on the national level and many governments are in the process of formulating and introducing emissions trading schemes.