The MDG Carbon Facility
 
Project Proponents
Resources
General Inquiries


>> Home

Approach

Carbon finance for the MDGs

About the Facility

Frequently asked questions

MDG Carbon Facility projects

Partnerships

Search

UNDP approach to Carbon Finance

The Facility aims to bring about market transformation with respect to carbon finance in developing countries - effecting the transition from a pre-market to a fully market-enabled environment that supports MDG-grade carbon projects and attracts substantial direct investment from the private sector. Indeed, experience suggests that one of the most effective means of increasing private sector interest in, and understanding of, carbon finance has been the availability of ‘showcase’ projects in host countries. Once market capacity has been developed in a particular country and a critical mass of MDG-grade carbon projects has been established, UNDP will exit that market, having achieved its market development and MDG objectives.


The Facility forms part of UNDP’s comprehensive, three-step approach to capacity development in carbon finance. On a country by country basis, this approach commences with barrier removal, then addresses the establishment of efficient host-country procedures, and finally culminates in the development of emission reduction projects by the Facility. Over the last few years UNDP has already engaged in the first two steps of this approach in multiple countries, creating the enabling environment for the Facility to effectively operate.

The Facility will be active in both the compliance and voluntary sectors. Initially, the Facility will focus on the compliance market, leveraging the existing Clean Development Mechanism (CDM) and Joint Implementation (JI) regulatory infrastructure and generating emission offsets that can be used by governments, businesses and other entities to meet their Kyoto commitments. A second, subsequent voluntary component will allow the Facility to work with smaller projects and to develop new, high-MDG project technologies.