Cambodia could soon be helping the world clean up its act and reduce greenhouse gas

emissions, following the initiation of a UN-funded project to encourage environmentally

friendly investment in developing countries.

Approval from the UN Environment Program in November 2002 gave Phnom Penh the green

light to begin implementing the Clean Development Mechanism program, known as CDM.

CDM is a global project that links developed countries that signed the Kyoto Protocol

with poorer nations. By investing in environmentally friendly projects, the developed

country gets carbon credits. These can go towards their Kyoto Protocol commitment

to cut greenhouse gas emissions by between 5-8 percent by 2012.

The situation benefits everyone, said the UN Development Programme's national project

coordinator for climate change, Dr Tin Ponlok. He added that Cambodia should strive

to catch up with other developing nations, as some are further ahead with their schemes.

"It is a challenge and an opportunity for the country [that] we should not lose,"

he said. "This project will assist the government build institutional capacity

and develop legislation, rules and guidelines for the implementation of CDM projects."

The government is currently developing a work plan for the next five years, which

is a requirement to qualify for the next round of funding. If all goes according

to plan, there should be a CDM National Authority and eligible projects in the pipeline

by 2005.

The motives for implementing CDM projects are hardly altruistic: they could bring

much-needed foreign investment, ease the pervasive problem of high energy costs,

and reforest areas which are currently barren.

"We would like to focus on two sectors: energy and forestry," said Dr Ponlok.

"Renewable energy such as bio-mass, solar power, wind, and small hydro plants

have good potential."

Deforestation is another area of concern, with both illegal and legal logging stripping

Cambodia of wooded areas. For the country that means a higher risk of flooding and

loss of livelihoods for those who depend on the forests. On a global scale it rids

the world of carbon sinks that absorb CO2 from the atmosphere.

"A company may want to invest in a reforestation program, for commercial activities

such as logging or furniture making," said Dr Ponlok.

The benefit of this type of investment, he said, is that companies must create a

sustainable harvest, with fast-growing trees being replanted once they have been

logged.

But those striving to make CDM a success admit the country has a long way to go before

it can attract the developed world. With a newly amended investment law, an unpredictable

political environment, and a lack of infrastructure, countries are not rushing to

invest.

"Nobody would look at Cambodia seriously for the next year, because nothing

is in place yet," said Dr Ponlok.

He added that it was impossible to estimate the amount of investment Cambodia hoped

to attract through CDM.

"It's too early to tell," he said. "We only can hope we will have

a chance. There are so many factors [to take into account], including the political

stability."

And not everyone is sold on the idea. Liam Salter, World Wildlife Fund coordinator

for the Asia-Pacific climate program, said CDM has been over-hyped. Besides, Cambodia

is not in a strong position to benefit.

"I think Cambodia is going to struggle against countries such as the Philippines,

China and South Africa," he said. "Cambodia is very poor and they don't

use much energy. [Developed nations] will probably go to countries where there are

higher CO2 emissions ... CDM is designed as a private sector instrument. [In Cambodia]

this is a bit misplaced."

But Dr Ponlok hopes that by the time the project ends, the country will be stable

and the infrastructure in place for CDM to be a success.

"By the end of December 2005 we aim to have a set of eligible projects, a CDM

National Authority, and legislation, rules and regulations in place," he said.

"There is potential for CDM."