Opportunities and Challenges of Carbon Trade Projects in Promoting Sustainable Development: The Case of Humbo Assisted Natural Regeneration Project

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2011-06

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Addis Ababa University

Abstract

The Kyoto Protocol has been in effect since 2005 providing flexible mechanisms to combat climate change and its negative effects. The CDM, one of the flexible mechanisms in the Kyoto Protocol, has the objectives of GHG emissions reduction and promoting sustainable development in Non Annex I countries that host the projects. While the former is relatively easy to monitor and achieve; the later objective is facing difficulties because of the CDM's own market based arrangement. The primary purpose of this work is to explore the contribution of CDM projects to sustainable development using the Humbo Assisted Natural Regeneration carbon sequestration project as a case study. To achieve this objective selected sustainable development indicators are used that fall in to three broad environmental, economic and social categories allowing a multi dimensional assessment of the project's contribution to sustainable development in the area. A four-point Likert scale questionnaire is used to collect data about sustainable development contribution of the project with a 0.85 level of Cronbach's alpha coefficient. The sampling unit was drawn from 100 households participating in the project in addition to data collected from other stakeholders through key informant interviews. The Mann Whitney U test is also used to compare the two sample groups with the 0.05 p level as a dividing mark to decide significance. The overall result of the study indicates that the Humbo carbon sequestration project, unlike most similar projects in other developing countries around the world, is promoting sustainable development with socio-economic and environmental benefits to the local community even though there are issues that still need to be attended to. This work also highlights Ethiopia's potentials and challenges in exploiting the opportunity the climate change regime has to offer. Hence, clarifying and main streaming the issues surrounding CDM and sustainable development in the Ethiopian context are found to be of great importance. Finally, the study recommends what has to be done in the future to scale-up carbon trade projects to maximize their benefit.

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Carbon Trade

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