Download A KEY TO AVERTING CLIMATE CHANGE

Background Paper
CDM- A KEY TO
AVERTING CLIMATE
CHANGE
Strategic Response
• Prevention
• Energy Conservation
• Green practices, change in lifestyle
• Abatement
• GHG emission mitigation through :
Improved energy efficiency
Cleaner energy sources / technologies
Preventing deforestation
Reducing methane emission (by improved Waste
management practices)
• Technological and economic potential
• Policies, measures, and instruments
• Global, regional and national cost of mitigation; Ancillary
benefits
CO2 mitigation Options: Case of
Electricity Sector
• Coal: Dominates the electricity sector today
• Fuel switching (Coal NG)
• Conventional Plants + Carbon Capture &
Sequestration (CCS)
(Post –Combustion CO2 Capture)
• Gasification/ Reforming + CCS
(Pre-Combustion CO2 Capture)
• Oxyfuel Combustion + CCS
CO2 Capture and Sequestration (CCS)
• Emerging area of research – Active work being
conducted in Europe, US, Canada, Japan, India
and Australia
• Option 1: Forestry and algal / microbial processes
that integrate the separation, capture and
sequestration (fixation) of CO2
• Option 2: Capture CO2 generated in a combustion
process, transport it as a concentrated steam and
securely store it (till eternity!)
CCS involves capture+ compression+ transport+storage+ monitoring
Global Problem
• CO2 is a global pollutant
• Responsibility of the industrialized (developed)
nations
• Large contribution to the present crisis
• Very high per capita emissions
• Strong, fossil- fuel driven economies
• Role of developing nations
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Developmental needs
Large demand for energy
Increasing population
Vulnerable due to lack of resources / adaptive capabilities
• Need for International cooperation
• North- South debate
• Kyoto Protocol (1997)
Brief History
• 1992: United Nations Framework convention on
Climate Change, adopted by most of the countries at
the Earth Summit in Rio de Janeiro
• 1997:Kyoto Protocol was adopted
• An important step towards stabilization of GHG concentration
to prevent dangerous impacts on climate system
• Industrialized countries are required to reduce their combined
GHG emissions by at least 5.2% compared to 1990 levels by the
first commitment period(2008-2012)
• 2005:Kyoto protocol entered into force
• Met 55 / 55%condition, after ratification by the Russian
Federation
• Is now fully operational
What is CDM ?
• Clean Development Mechanism
• Innovative feature of the Kyoto Protocol to the
UNFCCC, Introduced in Article 12.
• Legal entities in developed countries can invest
in projects in developing countries that reduce
GHGs.
• Once certified, these emission reductions can be
used to meet the commitments made by the
developed countries under the Kyoto Protocol.
Objectives of CDM
• To give Annex- I nations, flexibility to meet
emission reduction obligations (by investing
in projects in south and taking climate
credits in their balance sheets)
• To promote sustainable development in the
developing countries.
CDM: Pre-requisites
• The project should aim to reduce/ absorb at least 1
of 6 GHGs(CO2,CH4,N2O,HFCs,PFCs,SF6)
• Additionality: Anthropogenic emissions of GHG by
sources are reduced below those that would have
occurred in the absence of the registered CDM
project activity.
• “Real” and “Measurable” GHG reductions against
the baseline scenario.
• The project activity must demonstrate its
contribution to environmental integrity and the host
country’s sustainable development goals.
Where is CDM Applicable ?
• Renewable Energy: Wind, Solar, Biomass, Hydel
power
• Fuel switching: Fossil fuels to green fuel
• Energy efficiency measures related to:
Boilers,pumps,turbines,cooling system etc.
• Introduction of new, efficient power generation
technologies; Reduction in technical T&D losses
• Improved waste management
practieses:e.g.Capturing landfill methane for power
generation
• Transport: Modal shift (e.g. pipelines, train), fuel
switch
• Forestry:Afforestration
CDM: Disqualifiers
• Emission reduction from Nuclear facilities
• A diversion of official development
assistance (ODA) from Annex – I countries
• Any other type of sequestration activities
apart from afforestation and reforerstation!
India as a partner in Global GHG
Mitigation
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June 1992: Rio conference signs UNFCCC
Nov. 1993: Ratified the convention
Dec. 1997: Signed the Kyoto Protocol
Aug. 2002: Ratified the Kyoto Protocol
Dec.2003: National CDM authority was established
March2005: 1st CDM project from India was
registered
• Among non Annex- I countries, India is the first
Nation to recommend highest number of CDM
projects to CDM Executive Board of UNFCCC
(1000th projects registered on 14 April 2008)
• Indian DNA (Designated National Authority) has
offered simple, first tracked clearance system for the
issuance of Host Country Endorsement.
CDM- A WIN-WIN SITUATION
Industrialized countries (AI)
To assist in meeting their
emission limitation commitments
Investors
Project proponents
(private business,
governments, NGOs)
CDM project
activity
(private business,
governments, NGOs)
Developing countries (Non-AI)
To assist in achieving
sustainable development
What makes a project activity a CDM project
activity?
GHG
“What would have happened” situation
(fictitious situation) = baseline
CERs
CDM project activity
Start of CDM
project activity
time
GHG = Greenhouse gas emissions
CERs =certified emissions reduction
CDM Projects Status
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Total projects registered by EB – 1000
Equivalent CERs – 340 Million
Projects from India – 47 (~ 30%)
Total Baseline Methodologies approved
> 50
• Majority of the projects: Biomass –
energy
• Majority of CERs generated: HFC
oxidation
Typical CDM Projects Categories in India
• Renewable energy (e.g. solar, wind, biomass, hydro)
• Fuel switching (e.g. oil to gas, coal to gas)
• Energy efficiency (e.g. lighting, insulation, process
optimization)
• Waste processing (e.g. land fill gas extraction, waste
incineration)
• Waste heat recovery projects including power
generation
• Energy saving by elimination of reheating processes
• Thermal oxidation of HFC
• Afforestation
India’s Sustainable Development
Criterion for CDM Project Approval
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Environmental well being
Economic well being
Social well being
Technological well being
Some Issues with CDM
• Incentives to inflate baseline emissions (both
parties gain by overstating CERs)
• Technology transfer
• Major attraction of Kyoto Protocol to developing countries,
now virtually forgotten
• A technology acquisition fund (cess on CER buyers)
should be created to be given to developing countries to
buy technology from wherever and whomsoever
• Large transaction costs, discouraging small projects
• Perverse policy Incentives- A national policy promoting
renewable may disqualify the host century for CER credits
• Design for developed countries
• Market risk to be borne by the seller alone
• Non- transparent deals, keeps the buyers in control