Climate change is a common challenge that can only be dealt with if everyone
participates. Advanced economies should play a truly major role, jointly with
the involvement of developing countries. Financial mechanisms are therefore
needed to encourage the latter’s participation
Flexible mechanisms introduced by the Kyoto Protocol and the international
CO2 market have proved to be
effective tools to encourage investments from the industry of emerging western
nations, reaching emission reduction targets at reasonable costs. Among these,
the CDM (Clean Development Mechanism) has proved to be an innovative mechanism
to promote technology transfer in emerging and developing countries, and
therefore needs to be strengthened, as well as improved.
Moreover, other new mechanisms that are being assessed are particularly
interesting in specific areas and/or countries.
This is the case, for instance, of Latin America. A continent where almost
400 million people live with a constantly increasing energy consumption and
which is characterized by per capita CO2 emissions that grow at an even higher
rate than in European nations (although our per capita energy consumption is
much higher), mainly due to the negative effect of deforestation.
For this reason, at the Copenhagen summit, Latin American countries have
committed themselves to reduce deforestation, up to 80% by 2020 in the case of
In such a scenario, adequate flexible market tools can be essential to
reduce CO2 emissions in Latin
American countries, facilitating investments from Western companies, whose
mitigation costs would thus decrease.
Enel/Endesa, for example, the largest private company in South America with an
installed capacity of about 15,300 MW (60% hydro), has considered that these
tools offer a huge potential for emissions reduction (21 Mt CO2 in 2020, almost 10% of 2005 emissions).
Areas concerned are electricity production from renewable sources, waste
management, water treatment, greater efficiency in transport and other
The new "post Kyoto" CO2
market - on which Europe and the international community are working - will
certainly exploit this potential, safeguarding the commitment of private
enterprises for the benefit of companies, developing countries and the global