Making climate instruments work for sustainable transport in developing countries

In order to meet long-term climate change mitigation objectives, emissions cuts are required in all regions across the globe and in all sectors, including transport. In financing this effort, the Clean Development Mechanism (CDM) and the Global Environmental Facility (GEF) are until now the only international climate policy instruments under the United Nations Framework Convention on Climate Change that provide incentives for emissions reductions in developing countries. More recently, the Clean Technology Fund (CTF) was established. In this paper, we show that the impact of these financing instruments on transport has been very limited, due to methodological difficulties, a data-intensive monitoring process and the limited funding available. We argue that the transport sector is not likely to play a significant role in the continuation of a carbon credit offsetting scheme, unless these methodological requirements are simplified and significantly more funding is available. In the post-2012 climate regime, there may be substantial international funding available in addition to existing credit schemes and international funds, which could be channeled through nationally appropriate mitigation actions (NAMAs). This can provide new and better opportunities for sustainable transport in developing countries. We propose a framework for NAMAs, including types of policies and measures, measurement, reporting and verification of the actions, and an institutional and financial structure. We conclude that climate funding needs to be aligned closely with domestic and multilateral development finance flows in order to make a difference for sustainable transport.