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2.7.4 Carbon Financing The Government recognizes carbon financing as one of the measures to improve renewable energy project profitability in Lao PDR. The emissions reductions that could be generated by these projects could be traded in the global carbon markets. The certified emission reduction (CER) market of the Clean Development Mechanism (CDM) is one of the global carbon markets that can be accessed by renewable energy project developers. CDM is one of the flexible mechanisms established under the Kyoto Protocol of the United Nations Framework Convention on Climate Change (UNFCCC) to assist industrialized countries in meeting their emissions reduction obligations at lower cost and at the same time to stimulate investments that promote sustainable development in developing countries. Lao PDR satisfied the participation requirements for CDM. The government ratified the Kyoto Protocol in 2004, appointed Water Resources and Environmental Administration (WREA) to be the Designated National Authority, developed sustainable development criteria, and established the approval processes for CDM projects. With recent progress in CDM, the Government ensures that small-scale projects such as solar homes systems, pico hydropower, biogas, improved cook stoves, solar water heaters, etc will be developed under the CDM Program of Activities or programmatic CDM. In addition to CDM, the Government also encourages project proponents to access other carbon markets such as the EU Emissions Trading Scheme where CDM CERs can be converted into EU allowance units, and to voluntary markets in Europe and North America that purchase verified emissions reductions for clean energy projects. 2.8 Renewable Energy Road Maps In constructing the renewable energy road maps, timelines and milestones were defined for the proposed policy, legal, financial, market and organizational interventions for each renewable energy type to meet the national target and specific renewable energy targets for 2025. Road maps for the following renewable energies are given in the Annex. 2.9 • • • • • • • • Biodiesel; Bio ethanol; Small hydropower; Solar energy; Biogas; Biomass; Wind energy; Other alternative sources of energy for transport. Estimated Investment Cost for Renewable Energy Sector To fulfill the goals of renewable energy sector development, the government encourages investments from public and private sectors. 26PDF Image | Renewable Energy Development Strategy in Lao PDR
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