Kick the business out of CDM.
Ranjan Panda
"Kick the business out of the CDM"
A Release from Water Initiatives Orissa on World Environment Day
"Kick the habit: Towards a low carbon economy" is the slogan for this year's environment day that falls on the 5th of June. That slogan cannot be more apt considering the gross corporatisation of the Clean Development Mechanism (CDM) in the last few years of its existence. We need to throw out the business of profit making from this mechanism if we are serious and conscientious in our effort to reduce Global Green House Gas(GHG) emission and combat climate change.
The CDM has ended up being a tool for rich industrialists of developing countries to garner further income without any extra effort, investment or concern for climate change mitigation or sustainable development. At the same time, it has become a perfect hoodwinking tool for industrial establishments of the western countries who are required to reduce their emissions as per the Kyoto Protocol agreement. In the process, any true endeavors by genuine parties are hitting many blockades and GHG emission reduction targets are missing by quite a margin.
Profit seeking industrialists hijacking the mechanism
Maximum 'frauds' are being manipulated in the 'energy efficiency' categories. These types of projects mostly use the heat generated by their main unit for electricity generation. They get such heat free of cost. In the process their investments for power generation also reduces. Yet, to earn from CDM, they claim that they have chose to use waste heats of their plants instead of going for coal or other polluting fuels and have bore huge additional investments to mitigate GHG emissions. Through clever blackmailing and fact hidings they are earning huge sums from CDM.
The irony is that most CDM projects belong to 'energy efficiency' category. Out of the total 35 projects form Orissa that the national CDM Board had approved till the February this year, as high as 74 per cent belong to this category. In spite of having tremendous potential, Orissa does not have even one CDM project that invests in afforestation or renewable and clean energy source (barring few hydro-electric projects). Such kinds of projects reduce GHG emissions through carbon sequestration and enhance natural mitigation to affects of climate change. Promoters are shying away from such projects as they require far more investments than what the polluting industrialists require. On the contrary, projects like Bhushan steel, Shyam DRI, Vedanta Alumina - those have caused huge social and environmental nuisances - are about to get CDM status by claiming that they are good guys and care for the climate. This is a worrying trend.
CDM board needs to be stricter
As laid out by the CDM board of the country, any CDM project should necessarily pass at least 4 primary criteria, i.e., 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 project activity should bring in additional investment consistent with the needs of the people), Environmental well being(the project should reduce environmental harms and ensure sustainable use of environment), Technological well being (The project activity should lead to transfer of environmentally safe and sound technologies that are comparable to best practices in order to assist in upgradation of the technological base). Sadly, most projects fail in these criteria yet succeed in getting CDM approval from the CDM board and UNFCCC.
India is one of the major benefiting countries of the CDM till now and it is welcome that foreign monies are coming to the country. Till the 15th May, Indian projects may have earned between 1,300 to 2,900 Crores rupees (depending upon the market condition and bargaining power) from this mechanism. But who have benefited? Out of the total CERs that India has got, two companies from Gujrat and Rajasthan have cornered more than half.
The government needs to wake up to this. At the moment the national CDM board is allowing almost all projects that are applying before it for CDM approval. No strict scrutiny, vis-à-vis the four guiding requirements, are made. The prime objective is to earn as much foreign currency from this trade as possible. This has advertently or inadvertently led to promotion of unscrupulous practice in the CDM which is detrimental to the sustainable and equitable social and environmental promotion. "The government needs to understand that though foreign currency is welcome, that should not be at the cost of environmental and social sustainability and patronage of lies.
Cost structure should be suitably modified and eligibility broadened to attract genuine efforts
When big corporate seekers are getting easy earnings from CDM, genuine CDM projects are facing many obstacles. Prohibitive cost involved in the process is one such obstacle. Even a small scale project has to spend about 19 lakh rupees on various processes alone (in addition to project cost) and yet is not sure to get CDM approval.
The government needs to devise a framework to promote more investment in renewable energy, alternate energy, fuel switching, forest conservation and regeneration etc. Besides, activities like sustainable agriculture (bio-agriculture), soil-water management etc. should also be brought into the CDM purview as they genuinely mitigate GHG emission and combat climate change.
If the world suffers we will not be spared… at least Orissa should awake to it
At the present moment, the state government is not at all in the picture. All project proposals are directly submitted to the national CDM board and the UNFCC for CDM approval. Even the government owned OREDA (in spite of a lot of good work on renewable energy) has not succeeded in getting its CDM projects approved. The state government needs to encourage and wholeheartedly back genuine projects and project promoters that truthfully aim to reduce GHG emission and mitigate climate change impacts in the state. Orissa has lot of scope in alternate and renewable energy and afforestation. Such potential needs to be tapped to make the environment cleaner, earn some money from the CDM in the process and create options for local mitigation and adaptation to climate change.
Along with all habits that add to GHG emission, we also need to kick out 'greedy habits' facilitated by the present CDM structure. The environment Day gives us an opportunity to look at such issues afresh.
For further information on our campaign to combat climate change and to support this, please contact us at:
Ranjan K Panda
Convenor
Water Initiatives Orissa (WIO)
C/o : MASS
Dhanupali, Sambalpur, 768 005, Orissa, INDIA
Phone: +91-663-2520962/2404974
Cell: +91-9437050103(Ranjan)
Email: ranja...@gmail.com
P.S. This release has been extracted from the exclusive report for the latest issue of our bi-monthly newsletter in Oriya language, Panira Dagara, that reaches to at least 5000 people.