MEXICO CITY - Mexico City's sleek new public bus system is attracting significant international funding in carbon credit sales, part of the capital's ongoing effort to reduce pollution and green up its smoggy image.

 

The government of this sprawling metropolis of 9 million recently announced that the first phase of its rapid transit Metrobus system generated almost 846,000 euros ($1.1 million) in carbon credits by cutting greenhouse gas emissions.

 

Metrobus, which carries an average of 390,000 passengers a day, hopes to generate roughly $4 million more in offsets over the next 15 years, assuming a stable carbon market.

 

"Imagine having all those passengers if each of them would take a car," said Stefan Bakker, specialist in low carbon transport at the Energy research Centre of the Netherlands.

 

Funds already received have helped offset the $65.2 million investment the city made six years ago to build the system's first line, including 36 stops and dedicated traffic lanes.

 

Metrobus has three lines with 112 stops, but planners would like to see that increased tenfold one day.

 

Operating alongside a more chaotic traditional bus system, a bustling underground subway and a new bike rental program, the accordion-style buses hold many more passengers than normal buses. The cost per kilometer is much less than expanding the subway.

 

The project was pushed by successive leftist Mexico City mayors, including incumbent Marcelo Ebrard, known for environmentally friendly policies.

 

Metrobus is one of 10 transport projects registered with the U.N.'s Clean Development Mechanism, the original carbon market created by the Kyoto Protocol which allows developed nations to purchase carbon offsets by investing in pollution-reducing projects in poorer countries.

 

Symbolic project

"A lot of people have been very critical that the CDM doesn't fund more of these kinds of projects, so in that sense (Metrobus) is quite important," said University of Sussex development expert Peter Newell.

 

"The emissions savings are large, but in a way what's more important is the symbolic factor."

 

Authorities are cautiously optimistic about the chance of attracting funding for future projects after analysts said climate change talks that ended last weekend in Durban, South Africa, raised question marks about planned changes in the European Union carbon market, the world's biggest.

 

From 2013, the EU had said it would fund new carbon-cutting projects in only the least-developed countries, mostly in sub-Saharan Africa. But the tentative deal reached in Durban made it uncertain the EU change will go ahead.

 

The potential EU change "would be an impediment for new projects here in Mexico," said Lucrecia Martin, deputy director of climate change projects at Mexico's environment ministry.

 

Negotiators at Durban agreed to develop a new market-based mechanism to meet emissions-reducing targets, with details to be discussed in 2012, and experts said it was not clear what the agreement meant for offsets from emerging economies.

 

"The probability is that developed countries will still need to buy carbon credits from developing parts of the world," said Roberto Frau, an environmental consultant who worked on the early planning of Metrobus.

 

(Editing by Mica Rosenberg, Krista Hughes and David Gregorio)

 

Copyright 2011  Reuters Environmental Online Report