Under the Kyoto Protocol to the Climate Change Convention, the developed countries (also called Annex-I countries) are committed to reduce their greenhouse gas emissions by 5.2% below their 1990 level (base year). The US and Australia, however, have not signed the Protocol.
For making the process cost-effective, three flexibility mechanisms were introduced in the Protocol. These are joint implementation among developed countries; clean development mechanism (CDM) between developing and developed countries and carbon trading among developed countries. CDM has aroused considerable interests in developing countries like India. CDM, as defined in the Protocol, is to (i) assist developing countries in achieving sustainable development (ii) contribute to the ultimate objective of the Convention, and (iii) assist developed countries to comply with their quantified emission limitation and reduction commitments.
A country like India expects that CDM would facilitate tran-sfer of technologies that would assist in achieving economic wellbeing, social wellbeing, environmental wellbeing and technological wellbeing, and would catalyse foreign direct investment through CDM projects between developed countries and India.
India’s pro-active role and enabling environment has made it the most favoured destination for CDM, and since February 16, 2005, when the Kyoto Protocol came into force, CDM opportunities have brightened. Unfortunately, however, practically all the CDM projects approved in India/ in the pipeline are unilateral. Foreign investors, particularly from Europe, are very active in buying carbon-credits resulting from emission reductions from such CDM projects.
Greenhouse gases included in the Protocol for certified emission reductions (CERs) are: carbon dioxide, methane, nitrous oxide, perfluoro carbons, hydrofluoro carbons and sulphur hexafluoride. So far, 65 CDM projects from India have been registered with the UNFCCC, accounting for 9.1 million tonnes of carbon dioxide equivalent, and the average price per CER is about eight euro. This will help the trade in carbon, but it is doubtful if this would assist India in achieving sustainable development.
Since COP 11 in Montreal (2005), CDM opportunity in the forestry sector from affor-estation and reforestation has opened up. India needs to inc-rease forest cover and the CDM mechanism would help add-ress this. And help India in achieving sustainable development—providing job opportunities, livelihoods, help in conserving biodiversity and moderating climate and grea-ter carbon sequestration that also addresses the objective of the climate change convention.
—The writer is senior advisor, climate change, Winrock International India
