Consultations and Key Findings

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The findings of the consultations can be broken down into 3 main topics:

1. Identification of barriers to carbon finance (skill gaps, finances, structural constraints)
2. Identification of appropriate ways to deliver effective technical assistance (need based, ad hoc, on- and off-site)
3. Design of a service facility (Nexus) to simplify procedures and reduce costs

The barriers that development practitioners face when trying to enter the carbon market are different from large industrial projects- which make up most of the carbon market- and therefore have to be addressed in a specific and appropriate manner:

• Different financial mechanisms are needed at different stages of the project cycle: feasibility studies, pilot tests, methodology development, first up-scale, large up-scale).
• Different types of technical assistance for different levels of organization- a small eco-business and an international NGO require different interventions.
• Platforms, such as Nexus, are also needed to bridge a cultural gap, to accompany the mutual understanding between the development and the finance spheres.
• Available methodologies do not address the project types most relevant to the world’s poor (Conservation of nonrenewable biomas for example).

Current practices result in poor carbon deals for social project developers, inequitable risks and liabilities and high transaction costs. Developers’ platforms could reduce the buyer-seller asymmetry, improve deal equity, and negotiate lower fees from service providers.

The carbon finance community has to create instruments adequate to these needs:

• Patient capital that provides fair deals for large scale development projects over a long timeline
• Proper labeling and added value for highly sustainable development projects
• Philanthropy or CSR investment to fund methodology developers

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