Olavarría, Argentina, December 9, 2004--The people of Olavarría in the province of Buenos Aires are seeing first hand, the development benefits that are possible under the Clean Development Mechanism (CDM) of the Kyoto Protocol, with the signing of the first carbon finance agreement in Argentina today—the Olavarría Landfill Gas Recovery Project. It is a project that signals the vast potential of landfill gas recovery projects throughout the developing world.
The Kyoto Protocol¾which, with Russia’s ratification, will now come into effect in February 2005¾is the 1997 agreement to limit climate altering greenhouse gas emissions by industrial countries. The CDM, a flexible mechanism of the Protocol, allows OECD countries to fulfill some of their greenhouse gas emission-reduction commitments through projects in the developing world, projects that reduce greenhouse gases in the atmosphere and also contribute to sustainable development at the local level.
In 1999 the Municipality of Olavarría commissioned a sanitary landfill to dispose of the town’s solid waste. Five years later to help improve overall solid waste management practices and to address remaining environmental problems associated with waste disposal, i.e. odor and contamination of groundwater, the Municipality embarked on a new project to recover the gases emitted by the landfill. These gases are among those that contribute to climate change and global warming.
"This project represents a challenge for Olavarria with regard to the implementation of environmental projects locally, as well as progress in the commitments made regarding the efforts to mitigate climate change globally," said Olavarria’s mayor, Helios Eseverri.
The Olavarría Landfill Gas Recovery Project will capture and destroy the landfill gases through flaring. The resulting reductions in landfill gas emissions will be monitored, verified, certified and sold as verified greenhouse gas emission reductions to the Community Development Carbon Fund (CDCF). The fund has agreed to purchase a total of 131,000 tons of carbon dioxide emission reductions equivalent. This partnership of four governments and 12 companies managed by the World Bank is designed to provide communities in developing countries, and in particular least developed countries with an opportunity to benefit from new investments in renewable energy and clean technology that aim to reduce greenhouse gas emissions and mitigate the effects of climate change, while measurably improving the welfare of the communities involved.
"Projects like the Olavarría Landfill Gas Recovery Project give a clear signal to Argentina and other developing countries and to all the participants of the CDCF that have believed in the CDCF as an important tool for sustainable development," said David Corregidor, chair of the CDCF’s Participants’ Committee and Environment Director of Endesa of Spain. "We are seeing a positive contribution to both climate change mitigation and community development¾avoiding new greenhouse gas emissions via a CDM mechanism and also reducing poverty, through community benefits associated with all the CDM projects that are part of the CDCF initiative"
Part of the income from the sales of the certified emission reductions generated through the capture and flaring of methane, will be used by the Municipality of Olavarría to install a safe and reliable distribution system for potable water in the rural village of Espigas, 80 kilometers from Olavarría. Right now, 80 percent of the 550 villagers use manual pumps to get water from shallow, contaminated wells, and only 20 percent can afford to pay the $10 a month required to buy bottled water transported by truck from Olavarría.
The Project sponsor is the University of the Center of the Province of Buenos Aires ( UNCPBA).
According to Estela Santalla of UNCPBA, "The Olavarría Landfill Gas Recovery Project represents for the University of the Center of the Province of Buenos Aires the opportunity to develop local capacity and disseminate new experiences in activities to promote the mitigation of climate change."
The new water distribution system will consist of two 60 meter deep wells, submersible electrical water pumps, two 50 cubic meter storage tanks, 4000 meters of pipe network to carry the water by gravity from the tank throughout the village, water monitoring equipment and a treatment plant. When completed in 2005, the system will serve 150 households, a kindergarten (34 children), an elementary school (125 students), a high school (119 students), a hospital with 40 beds, a social and sports club, and a cultural center. Residents will pay a monthly user fee of about $2.50.
Payments for environmental services through innovative funds like the CDCF open new possibilities for environmentally responsible development.
"The Olavarría CDCF project proves that carbon finance has become an essential tool in improving solid waste management practices," said Abel Mejia, Sector Manager for Environment at the Latin America and Caribbean Region of the World Bank. "It is expected that the Olavarria experience will not just be replicated on a stand alone basis, but more important as part of a sectoral approach. The government of Argentina is preparing a solid waste management project at the national level, and it is the intention of the Bank to incorporate carbon finance as an structural component of the project to assist in the financing of state-of -the art final disposal facilities, recycling, composting and social programs."
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Contacts:
Yanina Budkin 54 11-43169700
ybudkin@worldbank.org
Anita Gordon 202-473-1799
Agordon@worldbank.org
Sergio Jellinek
202-458-4821
Sjellinek@worldbank.org
For more information please visit: www.carbonfinance.org
ANNEX 1:
The Kyoto Protocol and the Clean Development Mechanism (CDM)
The Kyoto Protocol provides an unprecedented opportunity for the Organization for Economic Co-Operation and Development (OECD) countries to reduce greenhouse gas emissions and at the same time help developing countries and economies in transition invest in climate friendly technologies and infrastructure. The Protocol’s Clean Development Mechanism (CDM) and Joint Implementation (JI) provide an element of flexibility for the industrialized countries to meet their obligations under the Protocol to reduce greenhouse gas emissions by on average 5.2 percent below their 1990 levels by 2010. In so doing, the Protocol provides an unprecedented incentive for those seeking lower cost emission reductions, to leverage the flow of private capital and privately held clean technology from North to South.
ANNEX 2:
The Carbon Finance Business
Carbon finance is the general term applied to financing seeking to purchase greenhouse gas emission reductions ("carbon" for short) to offset emissions in the OECD. Commitments of carbon finance for the purchase of carbon have grown rapidly since the first carbon purchases began less than seven years ago. The global market for greenhouse gas emission reductions through project-based transactions has been estimated at a cumulative 300 million tons of carbon dioxide equivalent since its inception in 1996. Asia now represents half of the supply of project-based emission reductions, with Latin America second with 27 percent. Volumes are expected to continue to grow as countries that have already ratified the Kyoto Protocol work to meet their commitments, and as national and regional markets for emission reductions are put into place, notably in Canada and the European Union (where trading is to start formally in 2005).
ANNEX 3:
Clean Water for a Local Community
Extensive consultations were held with the communities under the jurisdiction of the Municipality of Olavarría, as a result of which the distribution of potable water in Espigas was found to be the most pressing need, with the highest impact on the wellbeing of the community. The only doctor serving at the Espigas Hospital, Dr. José Nicanor Carlos Seclen, says that the gastrointestinal diseases resulting from contaminated water are the biggest health problem facing the village population, affecting particularly the young and the elderly, even to the point of stunting the growth of young children.
In addition to the water distribution network, the project will also support a pilot solar water heating system. Solar water heating equipment will be installed at the elementary school and one of the high schools to provide hot water for the students and teachers. This high school includes a dormitory where students from the surrounding rural areas reside.
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