of carbon they can emit. The mandate comes from international
agreements such as the Kyoto Protocol and EU Emissions Trading
Scheme;
• The smaller voluntary market comprises of companies, individuals or
governments who voluntarily purchase carbon credits (known as Verified
Emission Reductions) to offset their own carbon emissions.
The voluntary carbon market is growing rapidly and has supported small scale
renewable energy projects that contribute to pro-poor outcomes. It has however
generated a great deal of controversy. Many observers consider it to be a
distraction from the task of reducing worldwide emissions, perpetuating business-
as-usual by enabling people to salve their conscience as they continue to pursue
their high-carbon life-styles.56
There are also practical difficulties in ensuring that delivering carbon reductions is
profitable and not weighed down by a bureaucratic verification process. If carbon
finance is to be considered it is critical that it is addressed early in the business
planning process as it can take a very long time, and generally revenues arrive well
into project operation, meaning that capital must usually be raised elsewhere.
Carbon Finance Africa is a website which aims to facilitate and stimulate the
carbon sector in Africa. It does this through an innovative matchmaking
facility which assists project developers in finding financial partners and their
counterparts in sourcing carbon projects in Africa. The website includes general
information on climate change and carbon finance as well as country-specific
information on the investment climate and carbon finance in South Africa. The
website is currently focused on South Africa, the biggest carbon market in Africa to
date, but aims to include other high-potential countries.57
5. Monitoring and evaluation
Renewable energy projects aim to improve the economic, social and environmental
conditions of beneficiaries. Monitoring and evaluation (M&E) are important
management activities to measure progress and success of a project. Successful
M&E can enable reflective organizations to design projects that are effective and
efficient in meeting their development aims. The need for M&E is general to all
projects and a formal requirement of many donors.
Project teams developing M&E schemes for energy projects face some specific
challenges and difficulties, as compared to other types of projects, for instance
water, agriculture, health or education projects because:
• Energy services are necessary in the production of food, clothing, health
services, etc. As a result, the causal chain leading from energy to an
improvement in people’s lives is often longer and more complex than for
other projects.
• Energy services often bring improvements in several areas. For instance
electricity can be used to pump water, to refrigerate vaccines, to weld
metals, etc. Thus, M&E for energy projects faces the challenge of
measuring improvements in more than one area.
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