CDM Moneys

Nature of Finances

Pro-poor CDM Projects need to be financed upfront in order to implement the technologies that generate CERs. Unlike conventional rural development programmes undertaken by NGOs, they also generate substantial revenues which can, in due course, offset initial investments. From a purely financial standpoint they are a win-win strategy since:

"Instead of just mangos and potatoes, we farmers can now produce mangos, potatoes plus CERs".

But there are several implications that have to be kept in mind:

  • Tangible monetary benefits accrue not just to the "beneficiaries" but also for project investors.
  • These revenues can be shared between individual communities and families who participate in the CDM Project, the implementing NGO, group or other grassroots body, and the individual or entity that finances it.
  • Commercial moneys can be used as advance funding, with the certainty that they can be repaid in course of time.
  • Size is an important consideration since it would not be financially viable to shepherd a sound idea on emission reduction/sequestration through various torturous stages to a registered CDM Project unless there is an assured minimum quantity of CERs that can be generated.

Implications for NGOs

These, in turn, have a subset of rather paradoxical implications:

  • The use of commercial moneys demands efficiency and effectiveness. Tangible and agreed upon Results have to be obtained within defined timeframes.
  • CDM Projects are not, in that sense, ideal grounds to experiment with unproven approaches and flitter with "process/experiential learning".
  • Playing in the market with big moneys will challenge established values and lifestyles of NGOs and development workers. It will be a major challenge to retain the culture of simple living, critical reflection, spirit of enquiry, proximity to the poor, openness, transparency, answerability, et al.

But at the same time, the projection of these NGO values onto the commercial world is the very counter strength that grassroots bodies can offer in the emerging market, as the epitome of an alternate business strategy.

Village Level Implications

Sharing CER revenues demands very mature village communities who have an intrinsic understanding and strong vocal support for the concept of Individual & Community — one where the individual draws support from the community and, in turn, the community exerts control over the individual.

If, on the other hand, each participating family were to demand "their share" of CER revenues due to a very superficial unity based on functional considerations alone, CDM Projects could leave behind a trail of yet some more failed village cooperatives...