Fiorello H. LaGuardia Foundation

Large parts of the world’s population live without access to energy or running water. People in these circumstances experience less economic productivity and greater incidence of disease than those in more developed areas. Large-scale infrastructure projects to provide needed services are often economically impractical or physically impossible. There is great potential, however, for locally owned, community level infrastructure projects to fill this gap. Because of their scale, these projects also have potential to demonstrate the use of innovative, sustainable, highly efficient technology. Such projects not only improve quality of life but can also reduce releases of carbon, a major contributor to global warming.

Constraints to small-scale clean infrastructure projects are many. Lenders tend to be wary of providing capital to smaller businesses, in rural areas, and for technologies with which they have little experience. One answer to the capital problem is the Clean Development Mechanism (CDM), a trading system developed under the United Nations Framework Convention on Climate Change that creates a trading system of credits for carbon-reducing projects. Research associated with the CDM has shown that investments in small-scale energy projects in developing countries have lower costs per unit of displaced carbon than similar projects in more advanced countries. If projects can qualify under the CDM program, they will be able to access capital while also reducing global warming.

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