CDM emerging a disincentive for government investment in renewables
[NEW DELHI] The UN’s clean development mechanism (CDM), which allows developing countries to earn credits for investing in clean energy or forestation projects, has come under attack in India, as a ‘perverse’ disincentive for renewable energy technologies.
Under current CDM rules, some Indian renewable energy projects receiving government support cannot qualify for CDM credits, but private power plants using costly coal technologies as part of their mitigation efforts can, Chandra Bhushan, deputy director at the Centre for Science and Environment (CSE), a Delhi-based non-government organisation, said.
“We need reform in CDM rules which allow for government support,” Bhushan told a media workshop, last week (17 November), ahead of the international climate summit to be held in Durban, South Africa, in December.
Private sector dominates Indian CDM projects, accounting for 90 percent of the 2,115 projects approved as on 31 October, Subrata Bose, project coordinator for CDM at ministry of environment and forests, said.
CSE director Sunita Narain said a 2011 analysis by CSE showed that if India shifted to a low-carbon economy by 2020, it would need to avoid 3.4 billion metric tonnes of carbon dioxide, at the rate of US$ 60 per tonne of carbon dioxide avoided, compared to a business as usual scenario.
“This is three to four times the price of CERs (carbon emission) under CDM. The cost of CERs is already going down and is expected to crash further,” she said, adding that this would make investments in CDM projects more attractive; and funding for renewables more difficult.
While developing countries such as India struggle towards a low-carbon economy, developed countries could easily meet their emission reduction targets under the Kyoto Protocol by simply showing equivalent credits earned through CDM projects in developing countries, Bhushan observed.
“The developed countries can meet their Kyoto targets cheaply and there is no real transition to a low-carbon economy domestically,” Bhushan said.
“There is a need for a revolutionary technology transfer development and deployment, which will in turn require drastic emission reduction targets in industrialised countries,” Narain said.
The workshop heard a case from India’s southern Andhra Pradesh state where local communities regenerated wasteland and made livelihoods from minor forest produce and cattle rearing, only to find a private wind energy farm destroying vegetation by installing windmills.
“Green energy should not become a green disaster,” during policy implementtation, warned Bablu Ganguly, director of Timbaktu Collective, an NGO in the state that has challenged the windmill firm in court.