New Year and holy day Makeup Look for Ethiopians It would be great to briefly acquaint readers with what the carbon market looked under the KP so that it becomes easier to grasp the future. Under the KP’s-CDM market where the Developed took targets and the Developing voluntarily reduced emissions for trading them to the developed, carbon market actors generated a total of 7 billion tradable units and transacted 2 billion while the balance of about 5GtCO2e reduction is in or will slowly enter till 2020, in the reserve account of the registry administered by the CDM Executive Board under the UN. In the years from 2006 to 2012 carbon markets reached a staggering $200 billion per year with units at one time fetched €28 before it crashed to under €1 today. Among the 8000 plus projects and programs recognized internationally, about four projects and five programs are from Ethiopia, only one of which issued so far, about 100,000 units, 0.00005% of global issuance.
Performance of many African states under the KP carbon market was poor by all standards. Recognized projects and issued credits fell less than 2% of the world. Challenges cited were methodological complexity, lack of initial investment, upfront costs of dollar denominated carbon project development & accreditation, unaware owners of emissions sources and skewed international governance. Ethiopia suffered from several additional factors including reluctance to install basic processes, personal philosophical turfs in the EPA leadership of “why do we clean the mess the rich polluted” while religiously attending each small “capacity building” gatherings. India, China and Brazil installed their robust domestic institutional arrangement & processes, enhanced promotions, engaged carbon actors and already reached issuing 1000 domestic approvals by which time Ethiopia just installed its one man Designated National Authority (DNA) in 2007.
In Ethiopia, there was also an overwhelming myth that was often projected top down from the “I know all” state suggesting “there is no emission to reduce” making it difficult for Project developers struggling to explain the value in the carbon market even in big private emission sources. Official government documents and speeches give a “nationalization” sense of “you generate for the government to own”. Who was that government to even think of claiming or trading the emissions I reduced? Private actor’s pursuits to achieve introducing one more international trading field proved too expensive and risky in an already complicated Ethiopian trade rules and licensing procedures marred by the appetite of control freak regime. Carbon asset developers couldn’t cooperate with the public sector and hence Ethiopia’s cleaner public investments lost hundreds of millions of dollars of carbon revenue opportunities from all of the renewable power plants and electric rails built on huge international debt since 2001 and by now risk being considered as “Business as Usual Baselines” affecting even the investments yet to come. In contrast, similar projects were lavishly credited all over the other enabling developing states.