Carbon market and integrated waste solutions : a case study of Indonesia; final technical report

Abstract

This report presents an in depth assessment from a three-year applied research project in Indonesia that has attempted to use Clean Development Mechanisms (CDM) and voluntary market mechanisms as cofinancing tools for low income community projects in the urban waste management sector. The project, which partnered with three local NGOs, has evaluated the potential for carbon projects to tackle urban challenges in the solid waste management and sanitation sector, tested alternative implementations of community-based projects under the “Program of Activities” (PoA) CDM and voluntary projects, as well as explored the possibilities for partnerships with non-government organizations (NGOs), communities, municipalities and the private sector to engage in carbon projects. Through the effort to register KIPRAH, the decentralized community solid waste project under PoA, it was learned that every aspect of CDM including the methodology, way of communication, related institutions as well as transaction costs, are not suitable with the capacity and needs of a community project. There is therefore no doubt that the current CDM approach should be reformed if it intends to accommodate low income community projects. Based on the experiences of project implementation during the research period, lessons learned have been elaborated and changes in CDM methodology have been initialized (e.g. revision of methodology AMS.III-F). The project has contributed significantly to make CDM accessible for approaches that introduce new decentralized waste management systems in low income neighbourhoods. The project also played an important role in widening the scope of the Gold Standard label, which represents highly sustainable projects, and offers premium price credit for CDM and voluntary projects, which was restricted to energy-based projects, to include composting in the new version launched in June 2012. Currently, the project undergoes registration processes under the Gold Standard micro-scale voluntary emission reduction.