Scaling up carbon finance through CDM Programmes of Activities: challenges for low-income household energy projects in South Africa

Abstract

The experience with the Kyoto Protocol's Clean Development Mechanism (CDM) so far has shown that there are significant challenges in making the mechanism work for energy projects in households. Programmes of Activities (PoA) have been hailed as a new opportunity to address these challenges by transcending the CDM's single-site approach. Applying insights from research on energy projects in low-income households in South Africa, this article suggests that the successful use of PoA in developing countries is contingent on establishing an appropriate institutional framework, building local capacity, increasing institutional learning around project development, and harmonising evolving carbon finance mechanism. The article demonstrates that the concept of PoA has opened up new opportunities for implementing CDM projects and scaling up mitigation, but that the approach is only effective when situated in a context where diverse stakeholders address the multi-faceted requirements for scaling up carbon mitigation, including among other things, establishing enabling policy frameworks, exploring additional funding options, and developing appropriate methodological approaches.