Goals of cdm

Clean Development Mechanism

GROUP-7Manmeet SinghSimranjeet SinghSuryapreet SinghNidhi SinglaParul LalitCLEAN DEVELOPMENT MECHANISMIntroductionTheClean Development Mechanism(CDM) is an arrangement under theKyoto Protocolallowing industrialized countries with agreenhouse gasreduction commitment (calledAnnex 1countries) to invest in ventures that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries.

What is Clean Development Mechanism?Designed to provide developed countries with flexibility to meet GNG emission reduction targets that they agreed to achieve under the protocol.

Developed countries may finance GHG emission reducing projects undertaken in developing countries and receive credits to help them to meet their mandatory limits.

Assist developing countries who host CDM project to achieve sustainable development.Kyoto ProtocolTheKyoto Protocolis aprotocolto theUnited Nations Framework Convention on Climate Change(UNFCCC or FCCC), aimed at fightingglobal warming. The UNFCCC is an internationalenvironmentaltreatywith the goal of achieving "stabilization ofgreenhouse gasconcentrations in theatmosphereat a level that would minimize danger to the climate system.

The Protocol was initially adopted on 11 December 1997 inKyoto,Japanand entered into force on 16 February 2005. As of November 2009,187 states have signed and ratifiedthe protocol.

Kyoto Protocol, contd..Under the Protocol, 37 industrialized countries (called "Annex I countries") commit themselves to a reduction of four greenhouse gases (GHG) (carbon dioxide,methane,nitrous oxide,sulphur hexafluoride) produced by them. Annex I countries agreed to reduce their collective greenhouse gas emissions by 5.2% from the 1990 level. 14 April 2009Kyoto Protocol6 Industrialized countries

Financial aids Tech. Transfer

Developing countries Total 186 nations ContAnnex I41 Countries Annex II24 CountriesNon-Annex I145 Countries Objective of Clean Development MechanismAssist Parties not included in Annex I to the Convention in achieving sustainable development and in contributing to the ultimate objective of the Convention;

Assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3 of the Kyoto Protocol

Outline of the project process

An industrialized country that wishes to get credits from a CDM project must obtain the consent of the developing country hosting the project that the project will contribute to sustainable development. Then, using methodologies approved by the CDM Executive Board (EB), the applicant (the industrialized country) must make the case that thecarbon projectwould not have happened anyway (establishing additionality), and must establish a baseline estimating the future emissions in absence of the registered project. The case is then validated by a third party agency, called a Designated Operational Entity (DOE), to ensure the project results in real, measurable, and long-term emission reductions. The EB then decides whether or not to register (approve) the project. If a project is registered and implemented, the EB issues credits, calledCertified Emission Reductions(CERs, commonly known ascarbon credits, where each unit is equivalent to the reduction of one metric tone of CO2e, e.g. CO2or its equivalent), to project participants based on the monitored difference between the baseline and the actual emissions, verified by the DOE.

Clean Development Mechanism (CDM)

The CDM Dual Products: CERs and Sustainable Development

CATEGORIES

GOVERNANCEExecutive Board supervises the CDM, under the authority and guidance of the COP/MOP, and is fully accountable to the COP/MOP;Ten members and Ten alternates: one member/alternate from each of the five United Nations regional groups; Two members/alternates from the Parties included in Annex I; Two members/alternates from the Parties not included in Annex I; andOne member/alternate from SIDS.

GOVERNANCEElects its own chair and vice-chair, with one being a member from a Party included in Annex I and the other being from a Party not included in Annex I. The positions of chair and vice-chair alternate annually between members from Parties included in Annex I and Parties not included in Annex I, respectively.

Should meet at least three times a year.

MEMBERSHIP CRITERIABe nominated by one of the relevant constituencies identified above and elected by the COP/MOP. Be elected for a period of two years and be eligible to serve a maximum of two consecutive terms. Members, and alternate members, shall remain in office until their successors are elected.Possess appropriate technical and/or policy expertise and shall act in their personal capacity.MEMBERSHIP CRITERIABe bound by the rules of procedure of the executive board.Take a written oath of service witnessed by the Secretary-General of the United Nations or his/her authorized representative before assuming his or her duties.Have no pecuniary or financial interest in any aspect of a CDM project activity or any designated operational entity.MEMBERSHIP CRITERIANot disclose any confidential or proprietary information coming to their knowledge by reason of their duties for the executive board.

Shall remain an obligation after the expiration or termination of that members function for the executive board.

FUNCTIONSMake recommendations to the COP/MOP on further modalities and procedures for the CDM, as appropriate.

Make recommendations to the COP/MOP on any amendments or additions to rules of procedure for the executive board.

Report on its activities to each session of the COP/MOP.

FUNCTIONSApprove new methodologies related to, inter alia, baselines, monitoring plans and project boundaries.

Review provisions with regard to simplified modalities, procedures and the definitions of small scale project activities and make recommendations to the COP/MOP.FUNCTIONSBe responsible for the accreditation of operational entities, in accordance with accreditation standards and make recommendations to the COP/MOP for the designation of operational entities.

Review the accreditation standards in Appendix A below and make recommendations to COP/MOP for consideration;FUNCTIONSReport to the COP/MOP on the regional/ sub regional distribution of project activities with a view to identifying systematic or systemic barriers to their equitable distribution; andMake publicly available relevant information, submitted to it for this purpose, on proposed project activities in need of funding and on investors seeking opportunities, in order to assist in arranging funding of CDM project activities.Aim of CDMThe dual aim of CDM is to

achieve sustainable development in developing countries cost effective reduction of green house gases in developed countries

can be seen both as a source of synergy and conflict

Type of projects, which are being applied for CDM and which can be of valuable potential, are:

Energy efficiency projects Increasing building efficiency (Concept of Green Building/LEED Rating), eg. Techno polis Building Kolkata Increasing commercial/industrial energy efficiency (Renovation & Modernization of old power plants) Fuel switching from more carbon intensive fuels to less carbon intensive fuels; and Transport Improvements in vehicle fuel efficiency by the introduction of new technologies Changes in vehicles and/or fuel type, for example, switch to electric cars or fuel cell vehicles (CNG/Bio fuels) Switch of transport mode, e.g. changing to less carbon intensive means of transport like trains (Metro in Delhi); and

Methane recovery Animal waste methane recovery & utilization Installing an anaerobic digester & utilizing methane to produce energy Coal mine methane recovery Landfill methane recovery and utilization Capture & utilization of fugitive gas from gas pipelines; Methane collection and utilization from sewage/industrial waste treatment facilitiesCogeneration Use of waste heat from electric generation, such as exhaust from gas turbines, for industrial purposes or heating (e.g. Distillery-Molasses/ bagasse) Agricultural sector Energy efficiency improvements or switching to less carbon intensive energy sources for water pumps (irrigation) Methane reductions in rice cultivation Reducing animal waste or using produced animal waste for energy generation (see also under methane recovery) and

How it works

CDM is such an offset mechanism and is the only mechanism in the Kyoto Protocol involving developing countries

Developed countries can emit more than their GHG emissions caps if they can offset those extra emissions by achieving emissions reductions in developing countries.

Admissible emissions reductions in the developing countries are granted Certified Emissions Reductions (CERs) by the CDM Executive Board, a United Nations body.

Once granted, CERs achieve status as a legal tender, quite similar to the legal guarantee enjoyed by international currencies

A bridge between north and south.

26 A CER is a CER." If developed countries emit more than their caps allow, they can meet their obligations through the purchase of CERs in international carbon markets.

Just as the price of a commodity depends on the balance of supply and demand, the price of CERs depends on their supply from developing countries and their demand by developed countries.

Likewise, just as the least-cost producer of a commodity is the most profitable, the least-cost supplier of a CER has the highest incentive to supply the CERs. Thus, in theory, the it incentivizes the least cost GHG reductions in developing countries.

CDMs have other positive spin-offs. They promote transfers of technology to poorer countries, and also focus minds on how to tackle climate change in a cost-effective manner,

CLEAN DEVELOPMENT MECHANISM

CLEAN DEVELOPMENT MECHANISM

A small case study On China China ranks second in energy consumption in the world. In 2001 its total energy consumption was 1.35 billion tonnes of coal equivalent (tce), accounting for about 13 percent of the worlds total.

Although substantial progress has been made over the last twenty years in controlling its growth in energy consumption, which has risen at about half the rate of economic growth, demand for energy will continue to grow in order to power economic growth in the twenty-first century.

Increased GHG emissions associated with fossil fuel production and use are expected. It is estimated that in a well-off society scenario, Chinas CO2 emissions related to fossil fuel combustion will reach about 1,700 to 1,800 million tonnes of carbon (MtC) in 2020HOW it builds a Sustainable Environment?A small case study of China.

Improving the low level of energy efficiency and the irrational energy structure in China represents great potential for GHG emission reduction.

The low efficiency of Chinese energy use is especially significant. The average energy intensity per unit of gross domestic product lies eight times above the Japanese average, representing significant reduction opportunities in the industrial, residential, and transportation sectors. In China, common industrial equipment, such as boilers, motors, water pumps, and fans, are designed and produced at low efficiency levels and poorly operated.

The average efficiency of industrial boilers in China is more than 10 percent lower than that at the international advanced level, as is also the case for water pumps and fans. These equipment are also the major energy consumers: the coal consumption of industrial boilers accounts for one-third of total coal use.

Industrial motors use more than 60 percent of total industrial electricity. Replacing outdated equipment will lead to increased energy efficiency, consumption reduction, and GHG mitigation.

The average per capita energy consumption in China is much lower than that of developed countries.

In the long run, however, domestic energy use and GHG emissions will inevitably increase. In this growth, if advanced technologies are adoptedsuch as energy-efficient lighting, high-efficiency refrigerators and air conditionersand direct coal burning is replaced with gas, then the energy consumption growth rate will be slowed and therefore GHG emissions will be reduced.

In China, coal accounts for about 70 percent of primary energy production and consumption.

If the use of low carbon fuels such as coal bed methane, renewable energy, and natural gas is increased, then GHG emissions will be reduced and environmental, economic, and social benefits will be increased.Continued.. Coal bed methane is an untraditional natural gas of high-heat value stored in coal reserves and released in mining activities. It is an energy source that can be comprehensively utilized in order to increase clean energy supply, improve mine safety, and protect the global environment.

In China, renewable energyespecially biomass, small hydropower, and solar heatingis already in significant use, providing nearly 300 Mtce of energy supply annually. Development and rapid commercialization of renewable energy technology is the most important measure to employ in order to realize emissions reductions.

Energy efficiency improvement and optimization of energy structure, including developing renewable energy and utilizing coal bed methane, are measures that will not only contribute to reducing global GHG emissions but they are also consistent with Chinas national interests.

The CDM has the potential to attract additional private and government funding from developed countries, attract domestic investment in the energy and environment fields, introduce highly-efficient technology, and reduce environmental pollution from fossil fuel combustion.Other side of the coin..CARBON CREDITS -The primary purpose of the Protocol was to make developed countries pay for their ways with emissions while at the same time monetarily rewarding countries with good behavior in this regard. Since developing countries can start with clean technologies, they will be rewarded by those stuck with dirty ones. This system poises to become a big machine for partially transferring wealth from wealthy, industrialized countries to poor, undeveloped countries. Incentive structure.Developed not only sell their technology to developing onesBut also meet Kyoto commitments without lifting finger to reduce domestic emissions.

China is a major emitter, but investment is needed to promote sustainable development elsewhere too

Does the market work? The answer is a "yes but". Though set up in 2005, at latest count for 2007, before the UN Climate Change Conference in Bali in December, over 850 CDMs had been registered, 1,700 in the pipeline.

This is a positive sign, but there are question marks,

not least about the quality of some of the projects and whether they deliver real cuts in emissions.the CDM market has the potential to deliver more real emissions cuts , but it has to work in tandem with regulatory approaches CDM Challenges andOpportunities: in GeneralChallenges include - Lowering transaction costsLimit on use of credits by industrialized countriesPromoting CDM investmentsEnsuring that additional revenue promotes sustainable developmentOpportunities include Additional revenue streamMore energy-efficient technologiesBetter practicesGreater environmental awareness b

CONCLUSIONAt the international level, the Kyoto Protocol seems to show that CDM is politically and legally accepted by developing countries. This acceptance, however, is not to be taken for granted. To have CDM effectively in operation, continuing support from developing countries is imperative. Such support depends on a number of factors, as follows:

Rebuilding of trust among developing countries of the intention of Annex I countries regarding CDM.

Effective and substantial transfer of technology and resources to foster and sustain development.

Equity between Annex I and developing countries and among developing countries themselves so that the benefits of CDM projects are fairly shared between investing and host countries, and that the distribution of CDM projects around the world is geographically equitable.

Clarification is needed regarding the sale of shared CERs by developing countries.

There is a strong need for capacity building in developing countries to support at all stages of project development and implementation. Particular attention needs to be given to raising awareness and capacity of the private sector. Private sector activity should be under close scrutiny and oversight by the government in host countries.

Some flexibility concerning bilateral or multilateral arrangements in CDM is desirable

The CDM should be designed to offer win-win solutions for both developing and developed nations. The CDM framework should establish clear rules and procedures for cost-benefit analysis which can be used across projects and across regions.

A recent survey on CDM revealed that the major hurdle in CDM is the lack ofdevelopment of CDM markets. Low carbon prices have resulted in a low level ofinterest, lack of clear domestic institution and legal framework, and poorinvestment climate. Almost all sectors besides agriculture seem to have goodpotential for CDM (industry, municipal solid waste, energy efficiency ofappliances in buildings) but clarity of the additionality issue is essential forestimating potential. The level of understanding of the opportunities andcapacity to formulate projects in generally low, though renewable have a betterunderstanding than the other sectors. The best understanding is generallyamongst those in energy and large industry.

Overall supervision should be undertaken at the COP level, and the formation of the Executive Board should reflect equitable geographical distribution of countries.

There is a need to strengthen coordination among relevant institutions in the host countries.

The government also feels that the barriers to CDM are the low market prices, the low awareness amongst the private sector, uncertainty about the rules, and a lack of trained experts in the government

A joint effort, involving the government, industry, NGOs, and research institutes, can help maximise CDM benefits for India.

Thank You