UNDP and Fortis team up to leverage carbon finance for sustainable development (05/06/2007)MDG Carbon Facility to deliver 15 million Kyoto creditsBerlin, 5 June 2007—The United Nations Development Programme (UNDP) and banking and insurance giant Fortis announced an agreement today naming Fortis the financial services provider for UNDP's MDG Carbon Facility. This announcement also marks the operational launch of the Facility, an innovative means of harnessing the vast resources of the carbon market to bring long-term sustainable development to a more diverse share of developing countries. Under the terms of the partnership, announced in Berlin just prior to the G8 summit, UNDP will help developing countries conceive projects intended to reduce emissions of greenhouse gases, and will ensure that these projects meet the Kyoto Protocol's agreed standards and deliver real, sustainable benefits to the environment and broader human development. Fortis will then purchase, and sell-on, the emissions-reduction credits generated by these projects. The proceeds from Fortis' purchases will provide developing countries and communities with a new flow of resources to finance much needed investment and to promote development. ‘MDG' is short for ‘Millennium Development Goals,' the specific targets, agreed by United Nations member states, for diminishing global poverty and achieving major advances in health, education, environment and equality by 2015. “As we reach the halfway point to the 2015 target for achieving the Millennium Development Goals, it is clear that business has a critical role to play in advancing sustainable human development,” said UNDP Administrator Kemal Derviş. “We are delighted to have an eminent partner like Fortis join us in working to use carbon finance to transform markets, help mitigate the effects of climate change and promote a more sustainable future for all.” “The MDG Carbon Facility is a very exciting win-win opportunity for us," said Fortis Chief Executive Jean-Paul Votron. "It gives us the chance to make a major contribution to spreading the benefits of sustainable development while at the same time securing a strong position in the carbon market.” A recent Poverty-Environment Partnership report estimates that US $60-90 billion per year will be needed to address the environmental issues that contribute to poverty in developing nations; the market in emission reduction credits carries enormous potential The Clean Development Mechanism, or CDM, has been at the center of a rapidly expanding, billion-dollar international market for carbon credits. However, early signs indicate that the CDM is unlikely to deliver the broad-based benefits that many hoped it would, at least in the near to medium term. CDM projects have so far been limited in geographic reach, restricted mainly to Asia and Latin America, and have focused primarily on ‘end of pipe' technologies that generate limited benefit for long-term sustainable development. “Harnessing the power of the marketplace is essential in the fight against harmful global climate change: The MDG Carbon Facility is a creative market-based strategy that promises to produce double dividends--carbon reductions and economic progress in the world's less-developed countries,” said former Sen. Timothy Wirth, President of the United Nations Foundation, which provided a large portion of the startup funding for the Facility. The partnership between UNDP and Fortis covers an initial pipeline of projects which will generate 15 million credits during the Kyoto Protocol's first commitment period (2008-2012). UNDP and Fortis will begin evaluating potential projects for the Facility immediately. For more info, contact: |
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