CDM in Agriculture & CDM in Agriculture & Forestry : Glimpses of a Forestry : Glimpses of a Case study Case study Dr. M. A. Khalid Dr. M. A. Khalid Dy. Dy. Director & Associate Professor Director & Associate Professor Amity Institute of Global Warming & Ecological Studies Amity Institute of Global Warming & Ecological Studies Amity University, Noida, India Amity University, Noida, India Training Programme-CarbonMinus IIC_Delhi_25 th September 2008
Transcript
CDM in Agriculture & Forestry : CDM in Agriculture & Forestry : Glimpses of a Case studyGlimpses of a Case study
Dr. M. A. KhalidDr. M. A. Khalid Dy. Director & Associate ProfessorDy. Director & Associate Professor
Amity Institute of Global Warming & Ecological Studies Amity Institute of Global Warming & Ecological Studies
Amity University, Noida, India Amity University, Noida, India
Training Programme-CarbonMinus
IIC_Delhi_25th September 2008
Kyoto protocolKyoto protocol
A Protocol to the Convention was A Protocol to the Convention was adopted in 1997 at the Third Conference adopted in 1997 at the Third Conference of the Parties, held in Kyoto, Japanof the Parties, held in Kyoto, Japan
Already entered into force in Feb 2005Already entered into force in Feb 2005
UNFCCC's Kyoto Protocol commits UNFCCC's Kyoto Protocol commits industrialized countries to achieve industrialized countries to achieve quantified targets for decreasing their quantified targets for decreasing their emissions of greenhouse gasesemissions of greenhouse gases
Contd…
Kyoto ProtocolKyoto Protocol Gives effect to the aims and intents of the Gives effect to the aims and intents of the
UNFCCC to reduce anthropogenic UNFCCC to reduce anthropogenic changes in the climatechanges in the climate
Places legally binding commitments on Places legally binding commitments on developed countries to bring their developed countries to bring their collective emissions 5.2% below the 1990 collective emissions 5.2% below the 1990 levels during the first commitment period levels during the first commitment period 2008-122008-12
Presently 174 countries (Nov 2007) have Presently 174 countries (Nov 2007) have ratified the protocol except US and ratified the protocol except US and AustraliaAustralia Contd…
Kyoto ProtocolKyoto Protocol Out of 174 countries, 36 countries + EU are Out of 174 countries, 36 countries + EU are
required to reduce their GHG to the specified required to reduce their GHG to the specified level i.e. 5% below their 1990 level by 2008-level i.e. 5% below their 1990 level by 2008-20122012
Remaining 137 countries who have also ratified Remaining 137 countries who have also ratified the protocol have no obligation beyond the protocol have no obligation beyond monitoring & reporting emissionsmonitoring & reporting emissions
Kyoto includes flexible mechanism which allows Kyoto includes flexible mechanism which allows Annex I economies to meet their GHG limitation Annex I economies to meet their GHG limitation by purchasing GHG emission reductions from by purchasing GHG emission reductions from elsewhereelsewhere
““Flexibility mechanisms” for financing emission Flexibility mechanisms” for financing emission reductions abroad:reductions abroad:• Clean Development Mechanism (CDM)Clean Development Mechanism (CDM)• Joint Implementation (JI)Joint Implementation (JI)• International Emissions TradingInternational Emissions Trading
Kyoto Protocol recognizes six GHGsKyoto Protocol recognizes six GHGs
Carbon di oxideCarbon di oxide MethaneMethane Nitrous oxideNitrous oxide Sulphur hexafluorideSulphur hexafluoride Hydro-fluorocarbonsHydro-fluorocarbons Per-fluorocarbonsPer-fluorocarbons
United Nations Framework Convention on United Nations Framework Convention on Climate ChangeClimate Change
Adopted in 1992 by over 180 countries, Adopted in 1992 by over 180 countries, begins the process of stabilizing GHGs in begins the process of stabilizing GHGs in the atmospherethe atmosphere
Anthropogenic climate change is a global Anthropogenic climate change is a global concern and requires global efforts to concern and requires global efforts to combatcombat
Developed countries responsible for larger Developed countries responsible for larger shareshare
Developing countries share in it will grow Developing countries share in it will grow to suit their developmental needsto suit their developmental needs
Sovereign right to use resources Sovereign right to use resources tempered by responsibility to ensure tempered by responsibility to ensure others are not harmedothers are not harmed
Objectives of UNFCCCObjectives of UNFCCC
To stabilize GHG concentrations at levels To stabilize GHG concentrations at levels that prevent dangerous anthropogenic that prevent dangerous anthropogenic interference with the climate systeminterference with the climate system
Ensure that economic development Ensure that economic development proceeds in a sustainable manner and proceeds in a sustainable manner and food production is not threatenedfood production is not threatened
General commitments of developed General commitments of developed countriescountries
Mitigation efforts should not adversely Mitigation efforts should not adversely effect international trade and their social, effect international trade and their social, economic and environmental impacts on economic and environmental impacts on developing countries should be minimizeddeveloping countries should be minimized
To develop IPCC approved national To develop IPCC approved national systems for estimation of GHG emissions systems for estimation of GHG emissions and sinks by 2007and sinks by 2007
General commitments of developing General commitments of developing countriescountries
Should enhance energy efficiency, Should enhance energy efficiency, protect and enhance GHG sinks and protect and enhance GHG sinks and reservoirs, promote sustainable forest reservoirs, promote sustainable forest management, afforestation, reforestationmanagement, afforestation, reforestation
Undertake appropriate fiscal measures Undertake appropriate fiscal measures and reforms to reduce GHG emissionsand reforms to reduce GHG emissions
LULUCF & Forest DefinitionsLULUCF & Forest Definitions Defines “forest” as a min area of 0.05-1.0 Defines “forest” as a min area of 0.05-1.0
ha with tree crown cover of more than 10-ha with tree crown cover of more than 10-30% with trees (or regeneration) with the 30% with trees (or regeneration) with the potential to reach 2-5 meters at maturitypotential to reach 2-5 meters at maturity
““Afforestation” is conversion of land which Afforestation” is conversion of land which has not been a forest for at least 50 years has not been a forest for at least 50 years through planting, seeding and/or the through planting, seeding and/or the human induced promotion of natural seed human induced promotion of natural seed sourcessources
““Reforestation” is raising forest on lands Reforestation” is raising forest on lands not containing forests as on 31.12.1989not containing forests as on 31.12.1989
Contd…
LULUCF & Forest DefinitionsLULUCF & Forest Definitions ““Deforestation” is permanent conversion Deforestation” is permanent conversion
to non-forested land, does not include to non-forested land, does not include harvestingharvesting
““Re-vegetation” is increasing carbon stock Re-vegetation” is increasing carbon stock by establishing vegetation over a min of by establishing vegetation over a min of 0.05 ha & not meeting the definition of 0.05 ha & not meeting the definition of A&RA&R
““Forest Management” is a system of Forest Management” is a system of management practices and use of forest management practices and use of forest land aimed at fulfilling ecological, land aimed at fulfilling ecological, economic and social functions of forests in economic and social functions of forests in a sustainable mannera sustainable manner
Forest carbon pools Forest carbon pools Major carbon pools are the live biomass, Major carbon pools are the live biomass,
dead biomass, soil, and wood productsdead biomass, soil, and wood products Live biomass – above and below ground, Live biomass – above and below ground,
Clean Development MechanismClean Development Mechanism(CDM)(CDM)
Clean Development MechanismClean Development Mechanism
Two-fold objectives are:Two-fold objectives are:
• To assist Annex I Parties in achieving To assist Annex I Parties in achieving compliance with the quantified emission compliance with the quantified emission limitation and reduction commitmentslimitation and reduction commitments
To assist Parties not included in Annex I in To assist Parties not included in Annex I in sustainable developmentsustainable development
Only Mechanism with sustainable Only Mechanism with sustainable development as an objectivedevelopment as an objective
Clean Development Mechanism - Clean Development Mechanism - FeaturesFeatures
Trading of certified emission reduction Trading of certified emission reduction units (CERs)units (CERs)
Between developed and developing Between developed and developing country entities (government / private country entities (government / private sector)sector)
Project based mechanismProject based mechanism Market drivenMarket driven Emission reduction at lower cost due to Emission reduction at lower cost due to
lower lower cost of mitigationcost of mitigation in developing in developing countriescountries
Clean Development Mechanism (CDM) Clean Development Mechanism (CDM) - Project Eligibility- Project Eligibility
GHG mitigation projects started after GHG mitigation projects started after January 2000 are eligible and CERs can be January 2000 are eligible and CERs can be acquired from 2000 and banked to meet acquired from 2000 and banked to meet emissions reduction commitments starting emissions reduction commitments starting in 2008-2012in 2008-2012
Project should lead to sustainable Project should lead to sustainable development in the host countrydevelopment in the host country
GHG reduction should be real & GHG reduction should be real & measurable. measurable.
The project should be additionalThe project should be additional Environmental AdditionalityEnvironmental Additionality Project AdditionalityProject Additionality Financial AdditionalityFinancial Additionality Technical AdditionalityTechnical Additionality
LULUCF?LULUCF?
LULUCFLULUCF It is Land Use, Land-Use Change and Forestry It is Land Use, Land-Use Change and Forestry
(LULUCF), through human activities which (LULUCF), through human activities which affect changes in carbon stock between the affect changes in carbon stock between the carbon pools of terrestrial ecosystem and carbon pools of terrestrial ecosystem and between the terrestrial ecosystem and the between the terrestrial ecosystem and the atmosphereatmosphere
It is based on understanding that forests It is based on understanding that forests through growth of trees and increase in soil through growth of trees and increase in soil carbon, contain large part of the carbon stored carbon, contain large part of the carbon stored on land (UNFCCC)on land (UNFCCC)
Based on LULUCF, Good Practice Guidelines Based on LULUCF, Good Practice Guidelines (GPG) or combined called LULUCF-GPG (GPG) or combined called LULUCF-GPG guidelines have been drawn for calculations etcguidelines have been drawn for calculations etc
Left: Picture showing the difference between pre-project land Left: Picture showing the difference between pre-project land requirements for afforestation (top) and reforestation requirements for afforestation (top) and reforestation
(bottom); red lines depict barren land, green lines depict (bottom); red lines depict barren land, green lines depict forest. Right: Picture showing differences of canopy cover of forest. Right: Picture showing differences of canopy cover of tree vegetation. Given trees are minimal 3m in height, after tree vegetation. Given trees are minimal 3m in height, after
30 percent canopy cover the vegetation is called a forest 30 percent canopy cover the vegetation is called a forest according to the Vietnamese CDM forest definitionaccording to the Vietnamese CDM forest definition
The Good Practice Guidelines (GPG) for LULUCF describes six broad
land-use categories for reporting national inventories under the Convention
Forest land Cropland Grassland Wetlands Settlements Other land
Some FactsSome Facts
Agriculture and Forestry sector jointly Agriculture and Forestry sector jointly accounts for nearly 30% Co2 equivalent accounts for nearly 30% Co2 equivalent emissionsemissions
Emissions from agriculture sector is rising Emissions from agriculture sector is rising in developing countriesin developing countries
Forestry sector can help stabilize Forestry sector can help stabilize emissions thus aiding mitigationemissions thus aiding mitigation
Other mitigation opportunities achieved Other mitigation opportunities achieved through agriculture & forestry sector are through agriculture & forestry sector are through reducing deforestation, through reducing deforestation, Afforestation and promoting bio-energyAfforestation and promoting bio-energy
ActivitiesActivities Co2Co2 CH4CH4 N2ON2O CFCsCFCsENERGY USEENERGY USE
Coal productionCoal production NN YY YY NN
Coal, Oil & Gas combustionCoal, Oil & Gas combustion YY YY YY NN
Gas venting & leakagesGas venting & leakages NN YY NN NN
Methodology 1Methodology 1Approved Consolidated Methodology (1)Approved Consolidated Methodology (1) Consolidated methodology for GHG emission reductions from Consolidated methodology for GHG emission reductions from
manure management systems manure management systems
Approved Small Scale Methodologies (3)Approved Small Scale Methodologies (3)Methodology 2Methodology 2 Urea offset by inoculant application in soybean-corn rotations on Urea offset by inoculant application in soybean-corn rotations on
acidic soils on existing cropland acidic soils on existing cropland Methodology 3Methodology 3 Methane recovery in animal manure management systemsMethane recovery in animal manure management systemsMethodology 4Methodology 4 Methane recovery in agricultural activities at household/small farm Methane recovery in agricultural activities at household/small farm
levellevel
Agriculture: Regional distribution of Agriculture: Regional distribution of economic potential in mtCo2 economic potential in mtCo2 (US$100t/Co2 eq)(US$100t/Co2 eq)
Source: IPCC
Mitigation options in Agriculture sectorMitigation options in Agriculture sector
Improved cropland management through Improved cropland management through tillage/residue management, agronomytillage/residue management, agronomy
Water management through improved irrigation Water management through improved irrigation and drainage and drainage
Agro-forestry practicing Agro-forestry practicing Grazing land management which includes Grazing land management which includes
grazing intensity, increased productivity, grazing intensity, increased productivity, nutrient management, fire management etcnutrient management, fire management etc
Degraded land restoration through erosion Degraded land restoration through erosion control, organic/nutrient amendmentscontrol, organic/nutrient amendments
Livestock management through improved Livestock management through improved breeds, feeding/dietary practicesbreeds, feeding/dietary practices
Forests: Regional distribution of economic Forests: Regional distribution of economic potential in mtCo2 potential in mtCo2 (US$100t/Co2 eq)(US$100t/Co2 eq)
Mitigation potential over the Mitigation potential over the assessment in forest sectorassessment in forest sector
Source: IPCC
Biomass for energyBiomass for energySource: IPCC
Mitigation Options in Forestry SectorMitigation Options in Forestry Sector
Increasing forest area and maintaining Increasing forest area and maintaining existing forests i.e. reducing existing forests i.e. reducing deforestation deforestation
Promote offsite carbon stock in wood Promote offsite carbon stock in wood productsproducts
Substitution of fossil fuel with bio-Substitution of fossil fuel with bio-energy/bio-fuelsenergy/bio-fuels
Total Approved Methodologies: 13 Total Approved Methodologies: 13
Large Scale Methodologies (10 ) Large Scale Methodologies (10 )
Small ScaleSmall Scale methodologies: (3)methodologies: (3)
Only One Approved Project from China Only One Approved Project from China till datetill date
Economic mitigation potential in 2030 in Economic mitigation potential in 2030 in comparison to other sectorscomparison to other sectors
Source: IPCC
Carbon TradingCarbon Trading
Carbon CreditsCarbon Credits Carbon Credits are Key components of Carbon Credits are Key components of
International / National emissions trading International / National emissions trading schemesschemes
They are means and ways to reduce They are means and ways to reduce effects of greenhouse emissions on effects of greenhouse emissions on industrial scale by capping total annual industrial scale by capping total annual emissions and letting the market assign a emissions and letting the market assign a monetary value to any shortfall through monetary value to any shortfall through tradingtrading
Credits can be exchanged between Credits can be exchanged between businesses or bought or sold in businesses or bought or sold in international markets at the prevailing international markets at the prevailing market prices market prices
Carbon MarketCarbon Market
Carbon market is growing very rapidly and Carbon market is growing very rapidly and ample opportunities coming up ample opportunities coming up
Carbon credits together from the CDM and JI Carbon credits together from the CDM and JI accounted for 226m tonnes worth nearly €2bn accounted for 226m tonnes worth nearly €2bn in the first half of 2006 in the first half of 2006
Between January and June 2006 around 684m Between January and June 2006 around 684m tonnes of carbon worth €12bn were traded, tonnes of carbon worth €12bn were traded, more than five times that for the equivalent more than five times that for the equivalent period last year period last year
The EU Emissions Trading Scheme started in The EU Emissions Trading Scheme started in January 2005 (10-16 billion euro/market) January 2005 (10-16 billion euro/market)
The World Bank Carbon FinanceThe World Bank Carbon Finance Program has Program has over USD 700 million under management for over USD 700 million under management for buying credits from CDM and JI projects. This buying credits from CDM and JI projects. This includes:-includes:-
World Bank Prototype Carbon FundWorld Bank Prototype Carbon Fund – USD 180m – USD 180m BioCarbon FundBioCarbon Fund – USD 20m – USD 20m Community Development Carbon FundCommunity Development Carbon Fund – USD – USD
120m120m Italian Carbon FundItalian Carbon Fund – USD 150m – USD 150m Spanish Carbon FundSpanish Carbon Fund – USD 240m – USD 240m
A/R CDM Project: A/R CDM Project: A Case study from HaryanaA Case study from Haryana
Small Scale CooperativeSmall Scale Cooperative Afforestation Afforestation CDM Pilot Project Activity on Private CDM Pilot Project Activity on Private
Lands Affected by Shifting Sand Dunes Lands Affected by Shifting Sand Dunes in Sirsa, Haryanain Sirsa, Haryana
Project ID No (PID): 827/08Project ID No (PID): 827/08
Consultant: Amity Institute of Global Warming & Ecological Studies
Project DescriptionProject Description A A Pilot ProjectPilot Project over over 369.5 ha 369.5 ha in in 8 villages8 villages of Sirsa of Sirsa
district, Haryanadistrict, Haryana
227 farmers227 farmers voluntarily contributed their voluntarily contributed their unproductive lands for unproductive lands for 20 years20 years under Haryana under Haryana CDM Variksh Kisan Samiti, Ellenabad, SirsaCDM Variksh Kisan Samiti, Ellenabad, Sirsa
Membership open to any adult member who Membership open to any adult member who contributes min 0.05 ha area of unproductive contributes min 0.05 ha area of unproductive land and which has no grazingland and which has no grazing
Tree species to be planted are-Tree species to be planted are-Ailanthus excelsa, Ailanthus excelsa, Acacia tortilis, Acacia nilotica, Dalbergia sissoo, Acacia tortilis, Acacia nilotica, Dalbergia sissoo, Zizyphus mauritiana, Prosopis cineraria and Eucalyptus Zizyphus mauritiana, Prosopis cineraria and Eucalyptus hybridhybrid, on short (10 yr) & medium (20 yr) term rotation, on short (10 yr) & medium (20 yr) term rotation
Low income communityLow income community
1 dollar per day per person, 6 to a 1 dollar per day per person, 6 to a family, family income threshold Rs family, family income threshold Rs 90000 per year90000 per year
Almost all families below this level - Almost all families below this level - PRAPRA
Land eligibilityLand eligibility
No forests on the No forests on the land as on land as on 31.12.1989 – 31.12.1989 – satellite imagerysatellite imagery
Lands without Lands without forests since 1950s – forests since 1950s – from PRAfrom PRA
Satellite imagerySatellite imagery
Satellite imagery shows major vegetation / land use of the villages as agriculture, fallow/open/barren lands. Mostly non-woody species and the study area devoid of any dense forest cover during the period 1989-90
Additionality Additionality Ecological barriersEcological barriers –degraded and degrading lands –degraded and degrading lands
due to shifting sand dunes that have never been due to shifting sand dunes that have never been planted with trees in the pastplanted with trees in the past
Investment barriersInvestment barriers – no credit facility available for – no credit facility available for planting on such unproductive landsplanting on such unproductive lands
Pilot projectPilot project – HFD investing in it only because it is a – HFD investing in it only because it is a CDM project in order to promote carbon sequestration CDM project in order to promote carbon sequestration over private landsover private lands
Barriers due to prevailing practicesBarriers due to prevailing practices – first project of – first project of its kind in Haryanaits kind in Haryana
Technological barriersTechnological barriers – farmers do not have easy – farmers do not have easy access to high quality seedlings now made available for access to high quality seedlings now made available for this pilot project by HFDthis pilot project by HFD
Social barriersSocial barriers – no farmer organization to promote – no farmer organization to promote tree planting on such degraded lands. This Society has tree planting on such degraded lands. This Society has been created only because it is a CDM projectbeen created only because it is a CDM project
Trees would not have grownTrees would not have grown on their own over these on their own over these lands as there are no tree root stocks due to lands as there are no tree root stocks due to intermittent cropping over past several decadesintermittent cropping over past several decades
“Simplified baseline and monitoring “Simplified baseline and monitoring methodologies for small-scale afforestation and methodologies for small-scale afforestation and reforestation project activities under the clean reforestation project activities under the clean development mechanism implemented on development mechanism implemented on grasslands or croplands”grasslands or croplands”
Total net anthropogenic removal by sinks is Total net anthropogenic removal by sinks is 11591 t CO11591 t CO22 e /year, less than 16k tCO2e e /year, less than 16k tCO2e threshold for small scale projectsthreshold for small scale projects
BaselineBaseline: Pre-project trees- 546 : Pre-project trees- 546 (the carbon stock (the carbon stock change calculated on the basis of MAI) andchange calculated on the basis of MAI) and 2093 2093 woody perennials exist in project areawoody perennials exist in project area
LeakagesLeakages: degraded and degrading croplands : degraded and degrading croplands where crop taken only once at an average of 3 where crop taken only once at an average of 3 years; no cattle displacement; soil disturbance years; no cattle displacement; soil disturbance over less than 3% of the surface areaover less than 3% of the surface area
Glimpses of PDD prepared for A/R Glimpses of PDD prepared for A/R CDM project in HaryanaCDM project in Haryana
Project boundary of lands at villageProject boundary of lands at village
Species selection and rotation typeSpecies selection and rotation type
CERs SharingCERs Sharing Members shall hold the Members shall hold the shares on the basis of oneshares on the basis of one
share for every completed 0.05 ha of landshare for every completed 0.05 ha of land that that they commit to the society for the projectthey commit to the society for the project
Income from carbon credits and the projectIncome from carbon credits and the project would would accrue only to the project participantsaccrue only to the project participants
Income from forest productsIncome from forest products to be appropriated to be appropriated entirely by the land ownerentirely by the land owner
Income from carbon creditsIncome from carbon credits among the among the shareholders shall be shareholders shall be decided by the ‘Societydecided by the ‘Society’’ on on the basis of equity and fair playthe basis of equity and fair play
Total tCERs generated would be 3,79,709Total tCERs generated would be 3,79,709 during during 20 years20 years
BenefitsBenefits Economic well beingEconomic well being:: Net revenue from the project Net revenue from the project
would be would be Rs. 4.75 croreRs. 4.75 crore i.e nearly i.e nearly Rs. Rs. 6350/ha/yr6350/ha/yr in 20 yrs in 20 yrs
Revenue without C: Rs. 1196/ha/yrRevenue without C: Rs. 1196/ha/yr Revenue with C: Rs. 6425/ha/yr (as per PCN)Revenue with C: Rs. 6425/ha/yr (as per PCN)
Social well beingSocial well being: Enhanced community bondage & : Enhanced community bondage & status and elevated status of womenstatus and elevated status of women
Environmental well beingEnvironmental well being: Activity would lead to : Activity would lead to fixation of shifting sand dunes, increase water fixation of shifting sand dunes, increase water holding capacity of soils & add humus to the soilholding capacity of soils & add humus to the soil
Technological well beingTechnological well being: Encourages zero tillage, : Encourages zero tillage, use of organic fertilizers & bio-pesticides, use of organic fertilizers & bio-pesticides, vermicomposting etcvermicomposting etc
Present Status of the ProjectPresent Status of the Project
Waiting Final Registration at EBWaiting Final Registration at EB If registered, would be FIRST If registered, would be FIRST
PROJECT from INDIA and Second in PROJECT from INDIA and Second in the World after Chinathe World after China
Uncertainties and RisksUncertainties and Risks
Uncertainty in CER assurance Uncertainty in CER assurance (actual issuance versus projected)(actual issuance versus projected)
The calculated CER for issuance as The calculated CER for issuance as projected in the PDD may differ from projected in the PDD may differ from actual issuance after monitoring or actual issuance after monitoring or re-calculations etc.re-calculations etc.
Temporary nature of earned CERsTemporary nature of earned CERs
The very nature of CERs, which are temporary The very nature of CERs, which are temporary may hinder buyers because of associated risksmay hinder buyers because of associated risks
tCERS are risk-free from project owner’s point tCERS are risk-free from project owner’s point of view as once issued he doesn’t have any of view as once issued he doesn’t have any liability for the same liability for the same
Carbon stored in biomass and soil has a non-Carbon stored in biomass and soil has a non-permanence nature as it can be re-emitted to permanence nature as it can be re-emitted to atmosphere due to fires, decomposition, pests atmosphere due to fires, decomposition, pests etc.etc.
Lower prices fetched for CERsLower prices fetched for CERs
Price fetched is usually low and are Price fetched is usually low and are beneficial from buyer’s side and not beneficial from buyer’s side and not from producer’s sidefrom producer’s side
Uncertainty in assured CERs after Monitoring Uncertainty in assured CERs after Monitoring etcetc..
New credits are issued for the entire New credits are issued for the entire carbon stock at every verificationcarbon stock at every verification
Issuance fee relatively higher, as it is Issuance fee relatively higher, as it is to be incurred every 5 yearsto be incurred every 5 years
Uncertainty of post-2012 emission regulationUncertainty of post-2012 emission regulation
There is still uncertainty regarding Carbon There is still uncertainty regarding Carbon markets after 2012, when the Kyoto Protocol’s markets after 2012, when the Kyoto Protocol’s first commitment period endsfirst commitment period ends
No buyers are presently engaging into carbon-No buyers are presently engaging into carbon-credit transactions with a time frame beyond credit transactions with a time frame beyond 2012 (except World Bank)2012 (except World Bank)
Even if Post-Kyoto negotiations are successful, Even if Post-Kyoto negotiations are successful, its not clear that similar regulations will apply its not clear that similar regulations will apply to project-based carbon removals from forestry to project-based carbon removals from forestry activitiesactivities
Although, negotiations are on to generate Although, negotiations are on to generate carbon finance from forest conservation and carbon finance from forest conservation and avoided deforestation avoided deforestation
So, carbon markets beyond 2012 bear great So, carbon markets beyond 2012 bear great potential but also uncertainties for project potential but also uncertainties for project developersdevelopers
How to manage CDM Risks?How to manage CDM Risks?
Better negotiations of prices for CERsBetter negotiations of prices for CERs Better location (project type and geographical Better location (project type and geographical
location)location) Better management through people’s Better management through people’s
participationparticipation Better CDM project risk managementBetter CDM project risk management InsuranceInsurance Assured willingness of farmers to convert to Assured willingness of farmers to convert to
forestry type livelihood andforestry type livelihood and Capability of stakeholders/farmers etc., to Capability of stakeholders/farmers etc., to
maintain project area in a sustainable mannermaintain project area in a sustainable manner
Caution…..Caution….. Since in CDM, a project is considered additional, if Since in CDM, a project is considered additional, if
it would not have happened without CDM support, it would not have happened without CDM support, is a barrier is a barrier
As it means whatever a government does to As it means whatever a government does to mitigate climate change - as a matter of policy - mitigate climate change - as a matter of policy - cannot qualify for CDM because currently it is seen cannot qualify for CDM because currently it is seen as business-as-usual. as business-as-usual.
eg, if the Indian government specifies tough eg, if the Indian government specifies tough emission norms for buses, the public-transport emission norms for buses, the public-transport sector does not qualify for any creditssector does not qualify for any credits
This yardstick has become a barrier for effective This yardstick has become a barrier for effective projects, for instance, renewable projects, projects, for instance, renewable projects, particularly wind energy projects, often cannot particularly wind energy projects, often cannot qualify because the Indian government already has qualify because the Indian government already has a policy to support and promote this source of a policy to support and promote this source of energyenergy
Way forward….Way forward….
In India important mitigation options In India important mitigation options thus are:thus are:• Afforestation and bio-energyAfforestation and bio-energy• Cropland managementCropland management(due to wastelands, fallow lands etc)(due to wastelands, fallow lands etc)
Decisions for Post-Kyoto may be Decisions for Post-Kyoto may be simplified and acceptable new simplified and acceptable new mechanism in placemechanism in place
Include forests in the CDM scheme for Include forests in the CDM scheme for second commitment periodsecond commitment period
USA & Australia to fall in line for Kyoto USA & Australia to fall in line for Kyoto ProtocolProtocol
