Germany is participating in the new Pilot Auctioning Facility (PAF), a fund set up by the World Bank Group, and will be contributing up to 15 million euro. The fund was presented today in Washington and aims to promote waste management climate projects in particular for landfill degasification, organic waste and wastewater disposal.
So far a wide-range of promising climate projects in developing countries have been financed through the Clean Development Mechanism (CDM). At present however, private demand for allowances has dropped significantly. Many projects are at risk and need new funding. The fund will step into the breach for some of the projects relying exclusively on revenues from carbon credit trading. This will bridge the gap until a new climate agreement enters into force. It is only then that demand on the international climate change mitigation market can be expected to return to previous high levels.
The new fund will not only extend financing of climate projects through donor countries, it will also support developing countries in achieving emissions reductions through their own policies and legal provisions.
Projects supported by the fund are concerned with areas within the waste management sector responsible for emitting significant volumes of methane. Methane is a climate-damaging gas that is 23 times stronger than carbon dioxide. After this first phase, the fund will also target climate projects aimed at reducing other greenhouse gases.