Clean Development Mechanism

Presenters:Nitin Sharma

&Ribhu Vashishtha

What is the clean development mechanism?• The CDM allows emission-reduction projects in developing countries to earn

certified emission reduction (CER) credits, each equivalent to one tonne of CO2.

• These CERs can be traded and sold, and used by industrialized countries to meet a part of their emission reduction targets under the Kyoto Protocol.

• The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction limitation targets.

• The CDM is the main source of income for the UNFCCC Adaptation Fund, which was established to finance adaptation projects and programmes in developing country parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change. The Adaptation Fund is financed by a 2% levy on CERs issued by the CDM.

More about CDM

• The mechanism is seen by many as a trailblazer. It is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument, CERs.

• A CDM project activity might involve, for example, a rural electrification project using solar panels or the installation of more energy-efficient boilers.

• The mechanism stimulates sustainable development and emission reductions, while giving industrialized countries some flexibility in how they meet their emission reduction or limitation targets.

1. CDM Executive Board2. Designated National Authority (DNA)3. Designated Operational Entity (DOE)

What is innovative about the CDM?

• Provides market-oriented means to promote sustainable development (SD) while reducing GHG emissions below what they would have otherwise been.

• Promotes private sector investment in SD.

• Involves public scrutiny.

Benefits

• Global reduction of greenhouse gases.• Lesser cost of climate change mitigation.• Additional benefits through reduction of other

pollutants besides GHGs.• Opening a market for carbon investment.• Focus on sustainable development.• Scope for cooperation at various levels

(national, regional, and global).

Beneficiaries

• Developed countries.• Countries with economy in transition.• Developing countries.• Small inland countries.• Public sector.• Private sector.

Tata Mundra Ultra Mega Power Project

• Owned by Coastal Gujarat Power Limited (CGPL), a wholly owned subsidiary of Tata Power.

• Location: South of Tunda Wand village, Kutch district of Gujarat, India.

• The power station is one of nine Ultra Mega Power Projects the Indian government wants to be built by private sector companies before 2017.

METHODOLOGIES FOR LARGE-SCALE CDM PROJECT ACTIVITIES

Power would be produced with the least cost fuel (usually fossil fuels) in the absence of the project.

Use of renewable biomass for power generation avoids the use of fossil fuel.

HFC-23 is released to the atmosphere from the production of HCFC-22.

HFC-23 emitted from the production of HCFC-22 is decomposed using fossil fuel in a decomposition facility, resulting into CO2 emissions.

Associated gas from oil wells is flared or vented and non-associated gas is extracted from other gas wells.

Associated gas from oil wells is recovered and utilized and non-associated gas is not extracted from other gas wells.

N2O is emitted into the atmosphere during the production of adipic acid.

N2O is destroyed in a catalytic or thermal destruction unit.

Lands are degraded agricultural or grasslands with decreasing intensity of agricultural or grazing activities.

Forests are planted on lands. Animal grazing is not allowed.

Lands are degraded grasslands.

Forests are planted on lands.

Lands are unmanaged, not severely degraded grasslands in reserves or protected areas. Fuelwood collection is not allowed.

Forests are planted on lands. Fuelwood collection or any other human activities such as harvesting or agricultural activities are not allowed.

References

1. Implementation of the clean development mechanism in Asia and the pacific-issues, challenges and opportunities; UN 2003 Report

2. Building international public-private partnerships under the Kyoto Protocol; UN 2000

3. CDM Methodology Booklet; UNFCC 2002

4. Measuring the Clean Development Mechanism’s Performance and Potential; Program on Energy and Sustainable Development, Stanford University 2006