Carbon Credits for the Poor

Christina Tewes-Gradl
Working Papers

How development agencies can enable inclusive business under the CDM PoA

There are significant opportunities for impoverished people in developing countries to benefit from carbon trading under the Program of Activities (PoA) via inclusive businesses. The PoA allows different CDM project activities to register as one Clean Development Mechanism (CDM) programme. This facilitates the generation of carbon credits from decentralized sources like stoves, refrigerators or small hydro plants. Economies of scale make such PoAs viable commercially. Poor people can benefit directly from such business models as consumers, producers, distributors, or service providers within the CDM mechanism.

The purpose of this paper is to analyse the potential of the PoA within the CDM with a special focus on inclusive business opportunities and the role of development agencies in setting them free. It identifies the potential benefit of the PoA for people in poverty, points out barriers that stand in the way, and investigates how development actors can help remove them.