Kyoto protocol Carbon Credits

A step towards stopping climate change

and

BY

ByBinay kumar gupta

There is so much talk about global warming but what is it?

Global warming is a result of the build-up of greenhouse gases in the atmosphere. These, in turn, are being released into the air by man-made activities such as fossil-fuel burning in power plants, vehicles, cutting trees, etc. Besides, we have created new, more powerful GHGs (such as chlorofluorocarbons, CFCs) and released them into the atmosphere. Greenhouse gases are very

efficient trappers of the sun’s heat and over the last century,

have contributed to a rise in the average surface temperature of the earth.

  Variations of the Earth's surface temperature for the past 140 years

However, ever since the Industrial Revolution began about 150 years ago, man-made activities have added significant quantities of GHGs to the atmosphere. The atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have grown by about 31%, 151% and 17%, respectively, between 1750 and 2000 (IPCC 2001).

Variations of the Earth's surface temperature for the past 140 years The Earth’s surface temperature is shown year by year (red bars) and approximately decade by decade (black line, a filtered annual curve suppressing fluctuations below near decadal  time-scales). There are uncertainties in the annual data (thin black whisker bars represent the 95% confidence range) due to data gaps, random instrumental errors and uncertainties, uncertainties in bias corrections in the ocean surface temperature data and also in adjustments for urbanisation over the land. Over both the last 140 years and 100 years, the best estimate is that the global average surface temperature has increased by 0.6 ± 0.2 °C.

Source IPCC Third Assessment Report: Climate Change 2001 (The Scientific Basis, Summary for Policymakers) 

The Earth is the only planet in our solar system that supports life. The complex process of evolution occurred on Earth only because of some unique environmental conditions that were present: water, an oxygen-rich atmosphere, and a suitable surface temperature.

Mercury and Venus, the two planets that lie between Earth and the sun, do not support life. This is because Mercury has no atmosphere and therefore becomes very hot during the day, while temperatures at night may reach -140 ºC. Venus, has a thick atmosphere which traps more heat than it allows to escape, making it too hot (between 150 and 450 ºC) to sustain life.

Only the Earth has an atmosphere of the proper depth and chemical composition. About 30% of incoming energy from the sun is reflected back to space while the rest reaches the earth, warming the air, oceans, and land, and maintaining an average surface temperature of about 15 ºC. The chemical composition of the atmosphere is also responsible for nurturing life on our planet. Most of it is nitrogen (78%); about 21% is oxygen, which all animals need to survive; and only a small percentage (0.036%) is made up of carbon dioxide which plants require for photosynthesis.

Is global warming actually taking place? How do we know?

Knowledge about global warming related to man's activities comes mostly from indirect sources of information. One form of evidence comes from studies on the

annual rings of tree trunks.

These are pointers to the growth of a tree: -----

rapid growth suggests higher temperatures and increased moisture in the environment.

For example, researchers studying trees in -----

Mongolia have found unusually high growth rates during the last century indicating that temperatures were higher in this period.  

The atmosphere carries out the critical function of maintaining life-sustaining conditions on Earth, in the following way: each day, energy from the sun (largely in the visible part of the spectrum, but also some in the ultraviolet, and infra red portions) is absorbed by the land, seas, mountains, etc. If all this energy were to be absorbed completely, the earth would gradually become hotter and hotter. But actually, the earth both absorbs and, simultaneously releases it in the form of infra red waves (which cannot be seen by our eyes but can be felt as heat, for example the heat that you can feel with your hands over a heated car engine). All this rising heat is not lost to space, but is partly absorbed by some gases present in very small (or trace) quantities in the atmosphere, called GHGs (greenhouse gases).

Greenhouse gases (for example, carbon dioxide, methane, nitrous oxide, water vapour, ozone), re-emit some of this heat to the earth's surface. If they did not perform this useful function, most of the heat energy would escape, leaving the earth cold (about -18 ºC) and unfit to support life.However, ever since the Industrial Revolution began about 150 years ago, man-made activities have added significant quantities of GHGs to the atmosphere. The atmospheric concentrations of carbon dioxide, methane, and nitrous oxide have grown by about 31%, 151% and 17%, respectively, between 1750 and 2000 (IPCC 2001).

Are changes in the earth's climate being observed for the first time its history?

No, these changes are not anything new.

Climate change is a natural phenomenon and has been occurring ever since the earth was formed.

Earth obsevered previously well-marked warm and cold periods for the

last 400 000 years.

Last Ice Age occurred about 10,000 years ago and large parts of Europe and North America were covered with ice.

Between the 10th and 14th centuries, the global temperature rose by about 1ºC. But there is an important difference between what happened then and what’s happening now. Historically, climate change took place naturally, but the latest

phenomenon is a result of man’s interference with natural processes, at

a rate too rapid to allow ecosystems and their habitat to adapt.  

So, changes in climate have also occurred in the past. What about, say, the last 50 years – has anything changed in that period?

Yes, it has. Climatic patterns for the last 35-50 years show that man-made activities have definitely had an impact.

Models created by scientists to explain the variations in temperature over

the last 140 years cannot be explained by natural factors alone.

The best agreement by taking into account comparision (between actual observations and estimations) & when a combination of

both, man-made (such as GHG’s) and natural factors (volcanic eruptions), for example----

Nepal,--- scientists have been observing increasing temperatures in the Himalayas since the 1970s which could lead to floods and lakes bursting their banks.

What might the consequences of climate change be?

warmer climate results---

1.change rainfall and snowfall patterns,

2. lead to increased droughts and floods,

3. cause melting of glaciers and polar ice sheets, and

4. result in a sea-level rise.

EFFECTS WILL BE ON ----

water resources, forests and other natural ecological systems, agriculture, power generation, infrastructure, tourism, and human health.

Most importantly, a rise in ocean temperature as a consequence of climate change could affect the intensity and frequency of a weather phenomenon called the El Nino in the Pacific Ocean.     

What is El Nino?

A shift in ocean temperatures and atmospheric conditions in the tropical Pacific that disrupts weather around the world.

It is a poorly understood cyclical phenomenon that can lead to terrible extremes of weather all over the world. The warm El Nino phase typically lasts for 8–10 months or so.

Spatial distribution of changes in monsoon rainfall over Indian subcontinent as simulated by Hadley Centre's global and regional climate models at the time of doubling of carbon dioxide in the atmosphere

Due to Warmer and wetter conditions –

potential increase

1. in incidence of heat-related and infectious diseases

2. vector-borne diseases,

These are significant causes of mortality and morbidity in tropical Asia, But as a result of this climate change it will spread into new regions on the margins of present endemic areas.

LOSSES

. Yearly economic losses from large events increased 10.3-fold from US$4 billion yr-1 in the 1950s to US$40 billion yr-1 in the 1990s (all in 1999 US$).

The insured portion of these losses rose from a negligible level to US$9.2 billion annually during the same period, and

the ratio of premiums to catastrophe losses fell by two-thirds. Notably, costs are larger by a factor of 2 when losses from ordinary, noncatastrophic weather-related events are included. The numbers generally include "captive" self-insurers but not the less-formal types of self-insurance. Source IPCC (IPCC(Intergovermental panel on climate change )Third Assessment Report: Climate Change 2001 (Impacts, Adaptation & Vulnerability, Chapter 8, Insurance and Other Financial Services

The river Ganga originates in the Himalayas, and is fed by several glaciers.

The Gangotri is the longest of these, at 26 km, but there are hundreds of smaller ones, too.

One of these, is the Dokriani Bamak which is 5 km long and has a permanent research station at its base.

Scientists studying this glacier have found that it has been retreating at a rate of 20 m a year compared to about 16 m per year in the past. If the present trend continues, then over the next 25 years, the Ganga could

initially swell in volume because of increased melting but then dry out as the water supply in the mountains runs low. This will endanger the lives of

about 400 million people who live in the river's plains and depend upon it for their supply of water.

The consequences of climate change sound worrying. Is there something you and I can do about it?

Plenty. There are several things at the society, community and individual level that we can do. The very first initiative is to

1.Share with as many people as we can, what we know about climate change.

2.We can help to create a level of opinion that will convince our policy-makers and industry that action is necessary.3.As an individual, you can contribute by doing simple things such as switching off fans and lights when not in use, and using public transport whenever possible.

It appears that climate change will affect everyone on this planet. That means all of us need to get together to find a solution. Are we doing that?

Yes, Most nations trying together under the aegis of the United Nations to

think of solutions and ways to achieve them. Some prominent efforts are

1.the Montreal Protocol (1987) which sought to phase out CFCs (chlorofluorocarbons) and

2.the UNFCCC (United Nations Framework Convention on Climate Change), which aims to reduce GHGs. Countries agreed on the UNFCCC at the Rio Earth Summit in 1992.

3.This Summit brought global attention to the fact that environmental problems were

linked to economic conditions and poverty. It laid stress on

sustainable development and conservation.

4.In 1997, the UNFCCC reached a historic agreement to reduce GHG emissions in Kyoto. The most significant part of the Kyoto Protocol was the binding commitments by countries to reduce emissions.

 

Is our government doing anything in this area? Despite the fact that India's contributions to greenhouse gas emissions are very small, the Government is still taking measures to introduce climate-friendly initiatives.The Ministry of Environment and Forests is the nodal agency for climate change issues in India.

India has initiated several climate-friendly measures, particularly in the area of renewable energy. It has one of the most active renewable energy programmes besides having perhaps, the only dedicated ministry for non-conventional energy sources in the world. In the rural areas,

1. solar photovoltaic power systems have been put to use for lighting homes and pumping water, while other applications include 2.railway signalling and3. TV transmission.

India is among the top five in the world in the generation of wind power, with an installed capacity of APPROX.1507 MW. Major climate-friendly initiative has been launched in the area of forestry. A National Forests Policy has been drawn up, in which the programme of Joint Forest Management looks at meeting the requirements of fuel wood, fodder and timber with the local people’s participation.The Indian government signed the UNFCCC in June 1992. Under theConvention it has to make an inventory of the country’s GHG emissions, and, identify areas vulnerable to the effects of climate change.The UNFCCC promotes and reviews the implementation of the Convention through decisions taken at annually-held meetings of the Conference of Parties (COP).

The original meeting took place in Kyoto, Japan in 1997, when 110 governments agreed that industrialised countries should cut their greenhouse gas emissions by an average of 5.2% from the 1990 level by the year 2008-2012. 

What is the Kyoto Protocol in summary?

The Kyoto Protocol was a global agreement on the reduction of the main greenhouse gas emissions that are linked to climate change and global warming..

And global warming affects everything. Colder climates in some parts. Hotter, drier climates in others. Rising sea levels, water shortages, loss of bio diversity, and so on. The Kyoto Protocol is an effort to curb these, and other, effects.

When was the Kyoto Protocol first open for signature?

What greenhouse gases does the Kyoto Prootcol aim to limit?

•Carbon dioxide (CO2) •Methane (CH4) •Hydrofluorocarbons (HFCs) •Perfluorocarbons (PFCs, and •Sulphur hexafluoride (SF6)

Which countries have signed up for the Kyoto Protocol?At 18th April, 2006, 168 countries have signed the Kyoto Treaty At 3rd December, 2007, 175 countries have signed the Kyoto Treaty. It was finally ratified by

183 countries

When did the Kyoto Protocol come into force?

It came into force on actually 16th February, 2005.

What are the Kyoto Protocol conditions for it to come into force?

In summary, the Kyoto Protocol knows three categories.

•Annex I countries – industrialised countries •Annex II countries – developed countries •Developing countries

Annex I countriesThere are 40 Annex I countries and the European Union is also a member. These countries are classified as industrialized countries and countries in transition:-Australia, Austria, Belarus, Belgium, Bulgaria, Canada, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine, United Kingdom, United States of America

Annex II countriesThere are 23 Annex II countries and the European Union. Turkey was removed from the Annex II list in 2001 at its request to recognize its economy as a transition economy. These countries are classified as developed countries which pay for costs of developing countries:-Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States of America

The Copenhagen Climate Change Summit

The Copenhagen Climate Change summit was a gathering of world leaders in the capital of Denmark over a two week period from 7th - 18th December 2009.

Aims of the Summit

The aims of this meeting was to come up with a deal to replace the Kyoto protocol, a deal which is to expire in 2012.  15,000 delegates and officials were present, representing 192 nations, all with different expectations/aspirations of what they wanted to achieve

The ResultsIt “recognised” the scientific case for keeping global temperature rises below the 2 degree centigrade danger threshold

The deal was “non-binding” so countries only sign up to it on a voluntary basis.  The goal of cutting emissions by 80% by 2050 was also dropped.  It is up to individual governments to set their own targets of what they are prepared to do. 

The legally binding Kyoto protocol is currently preserved.

The accord aims to provide funds to help developing nations adapt to climate change - $30 billion/year until 2012 and $100 billion by 2020.

They also agreed to provide finance to help prevent deforestation which accounts for about 17% of carbon emissions.

Global absorption of CO2- Carbon Credits

The other method is to offset higher CO2

emission with lower CO2 emissions in other

projects locally or in other countries. This is piggy back riding on those producing less CO2.

The method tries to take into account the global concentration of CO2 instead of individual or localized emission concentrations. The Clean Development Mechanism of the Kyoto Protocol allows countries with an emission-reduction or emission-limitation commitment to implement emission reduction projects in developing countries. These projects should have additional reductions in CO2 emissions than would have been normally possible

The Certified Emission reductions from these projects are saleable as Carbon Credits. These Carbon credits are used to offset the increased emissions of CO2 and other greenhouse gases produced in the developed

countries.Buying and selling of Carbon credits have evolved as a billion dollar market.By these and other methods we hope to see much reduced CO2 emissions by the year 2012 and beyond

Carbon Dioxide, Carbon Credits and Carbon Capture Systems. Reducing CO2 emissions from Power Plants is the need of the day to reduce global warming and climate change.

•1.Carbon Dioxide –The Green House Gas from Power plants •2. What are Carbon Credits ?•3. How to Earn Carbon Credits •4. How to Reduce Carbon Dioxide Emissions from Power Plants

Carbon Dioxide (CO2) has become the villain responsible for global warming and climate change. What is the role of fossil-fueled power plants in global CO2 production? The concentration of CO2 in the troposphere has

increased by 17 % in the last two and half centuries since the Industrial Revolution. 2007-2008 levels of troposphere CO2 is around 389 ppm as per Earth

System Research Laboratory reports.

Carbon, the new Currency

The main GHG being Carbon Dioxide Trading in Carbon Credit is a market mechanism adopted to cap green house gases to reduce its impact on global warming and climate change.

What is this Carbon Credit?

The United Nation's Framework Convention for Climate Change's (UNFCCC's) Kyoto Protocol had the developed countries (Annex I countries)

agree to limit their green house gas (GHG) emissions to certain set targets set forth in Annex B of the protocol. The protocol also made additional provisions for the defaulters to compensate their excess emissions by three market based mechanisms. The aim was to reduce the global concentration of GHGs by sustained development programs in developing countries.(CO2), trading takes place in CO2 units. In the emissions trading market, also called the Carbon Market, the unit of currency is one Carbon Credit. This is equivalent to one ton of CO2 saved.

Other GHGs are converted to CO2 equivalents by using the Global Warming Potential (GWP). For example Methane has a GWP of 21 or 1 ton of Methane emission is equivalent to 21 tons of CO2 emission.

TRADING

Market Mechanisms

The three market based mechanisms are:

1.Emissions Trading. Organizations and industries within Annex 1 countries can trade excess GHG emissions with reduced GHG emissions in member countries. 2.Joint Implementation (JI) projects. Countries in Annex 1 can implement development projects within Annex 1 countries. These projects when implemented lead to reduced GHG emissions known as Emission Reduction Units (ERU's). These ERU's are traded. Each ERU is equivalent to 1 ton of CO2 emissions reduced. 3.Clean Development Mechanism (CDM)projects.

Countries in Annex I with an emission default can buy Certified Emission Reductions (CERs) from Developing countries. CERs are reductions in CO2 emissions from CDM projects. CDM projects are sustainable development projects implemented in developing countries that would have reduced GHG emissions. Implementation and monitoring of theses projects are by UNFCCC's designated agencies . Each CER is equivalent to one ton of CO2 emissions reduced.

These three mechanisms allow the trading of GHG emissions so that defaulters can compensate on the reduced emission of others at the same time creating sustained development in third world countries.

The Carbon Market in 2008 was around 40 billion Euro. Emission trading in the European Union is the highest followed with CERs from CDM projects.

The unit of currency in the Carbon Trading system is one of the prime tools in the war on climate change and global warming. Developing countries have a huge potential to earn carbon credits. How does a nation earn Carbon Credits?

Carbon Credits or Certified Emission Reduction units (CER's) from Clean Development Mechanism (CDM) projects constitute a major portion of the emissions trade. Around 3 Billion CER's from the CDM projects are expected to be created by

2012. This is an equivalent reduction of 3 Billion Tons of CO2 from current global CO2 values.

AIM

Basically CDM projects are divided into three categories.

1.Large scale projects. 2.Forestation and reforestation projects. 3.Small scale CDM projects.

Projects with less than 15 MW Electrical output or projects with less than 15000 Tons of CO2 emission reductions belong to this category.

UNFCCC's agencies have established methodology, tools and procedures for approving, monitoring and calculating the CER's for various types of CDM projects.Apart from the very many administrative requirements for CDM projects, there are three basic technical requirements to qualify as a CDM project that can earn CER's.

1. AdditionalityThis is the main requirement. The project should demonstrate that it will produce additional reduction in GHG's than the project implemented without being a CDM project.This is done by asking the following questions.•If implementing a lesser technology alternative, would it have led to higher emissions.( Barrier Analysis) •If implementing a financially more viable alternative, would it have led to higher emissions.( Investment Analysis) •If implementing the projects using prevailing common practices or regulatory requirements, would it have led to a project with higher emissions. (Common Practice Analysis) The answers should be yes. Which means implementing the CDM project will have at additional reduction in emissions.

2. CO2 Leakages.Leakages are GHG emissions that are not direct, but are associated with the implementation of the project. This is accounting the emissions or GHG absorption or reductions due to auxiliary or supporting project activities.E.g.: Take the case of a CDM project for biomass utilization.Where does the biomass come from? Is it from cutting trees If so, CO2 emissions could increase because of•land clearance and deforestation. •denying the source of forest products to other projects and activities. •the displacement of people and their livelihood. These are called CO2 leakages, and all these have to be accounted for when considering the feasibility of a CDM project.

3. Baseline Measurements

Quantifying the emissions savings will require a baseline scenario.Out of the many alternatives, identify a baseline scenario where CDM project is not implemented. The baseline scenario should be viable project that meets all statutory and regulatory requirements. Baseline scenario can also be a project that gives a similar output in near identical situations.Compare the emissions from the baseline and the CDM project. This gives the CO2 reductions from the CDM project.E.g. Consider a CDM project that the uses landfill gas for power generation in a nearby industry.

The baseline scenario will be•the landfill gas is vented or flared. •the industry sources the electricity from the power grid.

The emissions of GHG if we use the landfill gas for power generation and supply to the industry is compared with the baseline scenario to determine whether CDM is feasible or not. Also this is used to account for the CER's generated.

CDM projects

Some of the projects that are being currently implemented are: renewable energy projects using hydro and wind power

renewable energy using solar use of biomass fuels use of landfill gas fuel switching from fossil fuels to others generate own electricity energy efficiency procedures in burning fossil fuels. utilization of waste. avoidance of methane productions and discharge to atmosphere.

Reducing CO2 emissions from Power Plants is the need of the day to reduce global warming and climate change.

Biomass power plant owners are earning throgh carbon credits

A Biomasss power plant at Kota –uses 1.4 Kg husk for each unit of powerthat is generated.For each magawatt generated in a year the company gets upto 7000 carbon credits from the CDM executive Board, under the confrrence of the parties of the united nation framework convention on climate change(UNFCCC). The Indian CDM basket includes a number of biomass projects.

One third of the 133 countries that earn carbon credits are biomass power Projects.But they are small in size and add upto only eight percent of the total Carbon Emission Reduction(CER).(Record upto Novenber 2009-Climate secretariate wbsite).

The 133 projects have sold 4,994,670 CER at the rate of

US $ 17.7 PER cer, about Rs. 402.73 crore.

The CDM benefit from Biomass projects , roughly 6,500 CER per MW generated in a year ,would amount to about Rs. 52. 41 lakh.

This means a 10 MW plant earns up to Rs. 5.24 crore in a year in carbon credits.But raw material for Biomas fuel projects is not sustainable nor are prices predictable.

Now Government is promoting Biomass plantations

Lagume weed (Prosopis juliflora)-

Grows fastWeeds can feed power plant It fetches canbon credits as it is carbon sink andCost of biomass plantation brings down the price of a tonne of biomassFrom Rs. 2000 to Rs. 500.

Minstry is trying to implement a UN Development programme-Global Environment Facility –assisted project on Removal of Barriers to biomass power generation in India.Barrier may be removed by promoting fast growing trees and oil bearing plants raised by local communities.

Ministry aims to generate more than 45,000 MW with fuel grown on 20 million hectare of waste land.

One hectare it is assumed will yield 10 metric tonnes per annum of woody biomass.

Carbon capture and storage (CCS) is a means of mitigating the contribution of fossil fuel emissions to global warming, based on capturing carbon dioxide (CO2) from large point sources such as

fossil fuel power plants, and store it away from atmosphere by different means. It can also be used to describe the scrubbing of CO2

from ambient air as a geoengineering technique.

The term carbon dioxide capture and storage has also been used to describe biological techniques such as biochar burial, which use trees, plankton, etc. to capture CO2 from the air. However, it is more

conventional to use the term carbon capture and storage to describe non-biological processes of capturing carbon dioxide from combustion at the source.

Although CO2 has been injected into geological formations for

various purposes, the long term storage of CO2 is a relatively new

concept. The first commercial example is Weyburn in 2000]; integrated pilot-scale CCS power plant was to begin operating in September 2008 in the eastern German power plant Schwarze Pumpe run by utility Vattenfall, in the hope of answering questions about technological feasibility and economic efficiency.

Another alternative -CCS

CCS applied to a modern conventional power plant could reduce CO2 emissions to the atmosphere by approximately 80-90% compared to a plant without CCS. The IPCC(Intergovermental panel on climate change) estimates that the economic potential of CCS could be between 10% and 55% of the total carbon mitigation effort until year 2100 (Section 8.3.3 of IPCC report.)

Where toStore? deep geological formations, in deep ocean masses, or in the form of mineral carbonate s.deep ocean storage, --risk of greatly increasing the problem of ocean acidification, a problem that also stems from the excess of carbon dioxide already in the atmosphere and oceans. Geological formations --- currently considered the most promising sequestration sites. The National Energy Technology Laboratory (NETL) of America reported that North America has enough storage capacity at its current rate of production for more than 900 years worth of carbon dioxide

Energy Production with less CO2 productionThe very essence of energy release from fossil fuels is the exothermic chemical reaction of Carbon and Oxygen to form Carbon dioxide. CO2 is an inevitable

outcome of the process. So if we have to reduce CO2 we have to either stop burning

Carbon or burn Carbon more efficiently.

•The immediate recourse is to operate power plants at the best efficiency to reduce fuel input per unit of energy. •The next is to invest in technologies that improve the level of efficiency in coal fired thermal power plants from the current 35% level to the 50% level. Use of the combined cycle in coal fired power plants by coal gasification is one technology that is promising to improve power plant efficiencies. •Converting gas turbines in the open cycle mode to the combined cycle mode increases plant efficiency. •The real reduction in emissions can come only by drastically changing the energy generation mix. From the predominantly fossil fuelled energy mix today we have to go to a nuclear and renewable energy mix. More of wind and solar powered plants together with nuclear plants are the only reasonable and cheaper solutions for energy with reduced emissions.

Absorption of post combustion CO2-Carbon Capture and Storage

One method is to capture the CO2 before it reaches the

atmosphere. This is easier said than done. The method involves the separation of CO2 from the flue gases, piping

and storing them in underground or under sea cavities. Many pilot projects of this Carbon Capture and Storage Systems (CCS) are on the anvil.This is the reverse of what we are doing today. In this system we store the CO2 deep under earth from where we took the

fossil fuels

This Carbon sequestration is a costly process, and we have to wait and see how much society will be willing to pay extra for it.

When applied on plants which use biomass, the process is known as bio-energy with carbon capture and storage. This has the potential to be used as a negative carbon emission technique, and is by some regarded as geoengineering.

CLEAN DEVELOPMENT MECHANISM- INTERIM APPROVAL CRITERIA

1. Purpose The purpose of the clean development mechanism (CDM) is defined in Article 12 of the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The CDM has a two-fold purpose:

(a)to assist developing country Parties in achieving sustainable development, thereby contributing to the ultimate objective of the Convention, and

(b) to assist developed country Parties in achieving compliance with part of their quantified emission limitation and reduction commitments under Article 3. Each CDM project activity should meet the above two-fold purpose.

2. Eligibility:

The project proposal should establish the following in order to qualify for consideration as CDM project activity:

Additionalities: Emission Additionality: The project should lead to real, measurable and long term GHG mitigation. The additional GHG reductions are to be calculated with reference to a baseline.

Financial Additionality: The funding for CDM project activity should not lead to diversion of official development assistance. The project participants may demonstrate how this is being achieved.

Technological Additionality: The CDM project activities should lead to transfer of environmentally safe and sound technologies and know how.

3. Sustainable Development Indicators:

It is the prerogative of the host Party to confirm whether a clean development mechanism project activity assists it in achieving sustainable development. The CDM should also be oriented towards improving the quality of life of the very poor from the environmental standpoint.

Following aspects should be considered while designing CDM project activity:

A.) Social well being:The CDM project activity should lead to alleviation of poverty by generating additional employment, removal of social disparities and contribution to provision of basic amenities to people leading to improvement in quality of life of people. Economic well being:

The CDM project activity should bring in additional investment consistent with the needs of the people.

B.) Environmental well being: This should include a discussion of impact of the project activity on resource sustainability and resource degradation, if any, due to proposed activity; bio-diversity friendliness; impact on human health; reduction of levels of pollution in general;

C) Technological well being: The CDM project activity should lead to transfer of environmentally safe and sound technologies with a priority to the renewables sector or energy efficiency projects that are comparable to best practices in order to assist in upgradation of technological base.

4. Baselines: The project proposal must clearly and transparently describe methodology of determination of baseline. It should confirm to following:

Baselines should be precise, transparent,

comparable and workable;

Should avoid overestimation;

The methodology for determination of baseline

should be homogeneous and reliable;

Potential errors should be indicated;

System boundaries of baselines should be established;

Interval between updates of baselines should be clearly described;

Role of externalities should be brought out (social, economic and environmental);

Should include historic emission data-sets wherever available;

Lifetime of project cycle should be clearly mentioned;

The baseline should be on project by project basis except for those categories that qualify for simplified procedures. The project proposal should indicate the formulae used for calculating GHG offsets in the project and baseline scenario.

Leakage, if any, should be described. For the purpose of Project Idea Notes (PIN), default values may be used with justification. Determination of base project which would have come up in absence of proposed project should be clearly described in the project proposal.

4.Financial Indicators:

The project participants should bring out the following aspects:

Flow of additional investment

Cost effectiveness of energy saving

Internal Rate of Return (IRR) without accounting for CERs

IRR with CERs

Liquidity, N.P.V., cost/benefit analysis, cash flow etc establishing that the project has good probability of eventually being implemented

Agreements reached with the Stakeholders, if any, including power purchase agreements, Memorandum of Understanding etc.

Inclusion of indicative costs related to validation, approval, registration, monitoring and verification, certification, share of proceeds

Proposal should indicate funding available, financing agency and also describe as to how financial closure is sought to be achieved

5. Technological Feasibility: The proposal should include following elements:

•The proposed technology/process• •Product/technology/material supply chain

•Technical complexities, if any• •Preliminary designs, schematics for all major equipment needed, design requirement, manufacturers name and details, capital cost estimate

•Technological reliability

•Organizational and management plan for implementation, including timetable, personnel requirements, staff training, project engineering, CPM/PERT-Chart etc.

6. Risk Analysis

The project proposal should clearly state risks associated with a project including apportionment of risks and liabilities; insurance and guarantees, if any.

7. Credentials:

The credentials of the project participants must be clearly described.

THANK YOU