The investment potential of instruments related to the United Nations Framework Convention on Climate Change can help the African continent, but in a more limited way than might have been hoped for, at least during the first commitment period from 2008-2012. The choice of restricting the range of activities eligible for the CDM to afforestation and reforestation, and the probable exclusion of rehabilitation and restoration in degraded forests place essential forest management activities outside of the Kyoto Protocol's principal investment instrument for the Southern countries. Small community forestation projects might benefit from CDM investments, depending on the mechanism's final structure, definitions and modalities, to be decided at COP9 in December 2003. The prospect of using biomass energy as a substitute for fossil fuels offers attractive perspectives, particularly considering the need for decentralized electricity production. Present CDM regulations allow credit for energy substitution and fuelwood plantations.
The state of international negotiations on the Kyoto Protocol makes it fairly unlikely that significant investments will be made in carbon sinks in the developing countries. The withdrawal of the United States from the Protocol reduces the potential demand for certified carbon credits under the Kyoto Protocol, and the possibility of industrial countries to earn credit for the normal growth of their forests has the same effect. Combined with the ceiling of 1% of base-year emission for credits from the CDM, this should result in a low price for a ton of carbon on the international market. The CDM in forestry will therefore be constrained to projects that have a favorable cost-benefit ratio, to the detriment of smaller projects or activities that have high transaction costs. The uncertainties regarding land ownership statutes and the frequent institutional crises in African countries risk penalizing the continent in the competition for CDM investments.
Although recent attention has been focused on the CDM, the growing role of the GEF should be emphasized, following the decision to create three funds linked to climate change and intended for developing countries. These funds will be administered by the GEF, whose resources will also be increased. The GEF presently has operational programs that are geared to the mitigation of climate change and its activities would be complementary to those of the CDM. Numerous public and private initiatives came to the fore after the Rio Conference regarding methods for using forests and trees in the combat against climate change. This dynamic is likely to continue, and could be utilized in synergy with UNFCCC's specific instruments in order to implement activities having multiple environmental and social benefits.
Although the CDM deals with only a few activities, the combination of instruments, support by public policies and backing by international aid could help implement more sustainable forest management in Africa which would contribute importantly to achieving the Climate Convention's objectives. The capacity of the governments concerned to encourage initiatives and organize this type of synergies will be a critical factor in the success of these policies.