Kyoto Protocol and Clean Development

Mechanism A & R Projects

UPENDRA VERMA
AMRENDRA KUMAR
 The Kyoto Protocol

• Adopted at COP 3 (Conference of the Parties 3) in Kyoto on 11th

December 1997.

• COP means Conference of the Parties to United Nations Framework

Convention on Climate Change (UNFCCC).
• UNFCCC constituted in 1992 during Earth Summit with following objectives :

• to stabilize Green House Gas (GHG) concentrations at level that

prevent dangerous anthropogenic interference with the climate system.

• to ensure that economic development proceeds in a sustainable

manner, and

• to prevent any threat to future food production

• Intergovernmental Panel on Climate Change (IPCC) – established in 1988

jointly by the World Meteorological Organization (WMO) and United Nations
Environment Programme (UNEP).
• Kyoto Protocol came into force on 16th February 2005, following signing by
Russia.
• The main conditions of this protocol were :
• Minimum 55 signatories
• With minimum 55% of total CO2 emission

• Kyoto Protocol commits Annex 1 Parties (largely developed countries) to

reduce their GHG emissions to a total cut off at 5.2% of 1990 emission in the

commitment period of 2008-2012.

International Action on Climate Change
Rio Earth Summit & birth
of UNFCCC
1992

1997 Kyoto Protocol

IPCC GHG inventory report 1990 adopted

IPCC constituted 1988

Kyoto Protocol
2005
comes into force

2008 First commitment period

2012 starts
First commitment period
ends
Carbon
Market
evolved
©2009 Deloitte LLP. All rights reserved.
Forests as Carbon Sink
•The targets cover emissions of six GHGs

• Carbon dioxide (CO2)

• Methane (CH4)

• Nitrous Oxide (N2O)

• Hydro Fluoro Carbons (HFCs)
• Per Fluoro Carbons (PFCs)
• Sulphur Hexafluoride (SF6)
 Market based mechanisms of the Kyoto Protocol
1. The Emission Trading Scheme

• Allows developed countries to transfer emissions credits to each other.

• Countries that reduces emission more than that required by their national
target under Kyoto Protocol will be able to sell their excess emissions
credits to the countries that find it difficult to reduce their own emissions.

2. Joint Implementation

• To be implemented between 2 or more Annex 1 countries.

3. Clean Development Mechanism

• By Governments and Private firms in projects in developing countries that

reduce or avoid emissions.

• Developed (Annex 1) countries will receive credits against their targets for
emissions avoided by these projects.
Annex 1 Countries and their reduction commitment
Country Reduction Country Reduction
commitment (%) commitment (%)
Australia 108 Latvia 92
Austria 92 Liechtenstein 92
Belgium 92 Lithuania 92
Bulgaria 92 Luxembourg 92
Canada 94 Monaco 92
Croatia 95 Netherlands 92
Czech Republic 92 New Zealand 100
Denmark 92 Norway 101
Estonia 92 Poland 94
European Community 92 Portugal 92
Finland 92 Romania 92
France 92 Russian Federation 100
Germany 92 Slovakia 92
Greece 92 Slovenia 92
Hungary 94 Spain 92
Iceland 110 Sweden 92
Ireland 92 Switzerland 92
Italy 92 UK 92
Japan 94 USA 93
 Kyoto Protocol

• This protocol has 28 articles.

• Article 1 has definitions of COP, IPCC, Montreal Protocol, Parties included in
Annex 1 etc.
•Any programme between 2 or more Annex – 1 countries for Joint
Implementation has been defined in Article 6 of Kyoto Protocol.
• Clean Development Mechanism has been defined in Article 12.
• The Emission Trading Scheme to transfer emissions among Annex – 1 countries
has been defined in Article 17.
Clean Development Mechanism –
Afforestation & Reforestation Projects
 Type of Projects

• Renewable energy (wind, biomass, solar, hydro)

• Switching to alternate fuels
• Energy efficiency
• Waste management
• Oil & Gas
• Agriculture
• Carbon sequestration in forests
 What is a CER

• A Certified Emission Reduction (CER) is the technical term for the carbon
credits output of CDM projects, as defined by the Kyoto Protocol.

• A unit of green house gas reduction that has been generated and certified
under the provisions of Kyoto Protocol is termed as CER.

• One CER is equal to one tonne of CO2 equivalent.

• CERs are issued by CDM Executive Board, Bonn (Germany).

• CERs may be traded in International Markets.

 CDM Project Cycle

Step 1. Project design and formulation

• To design Project Concept Note (PCN)

• To design Project Design Development (PDD)
• PDD is a legal CDM document, which defines the project baseline to
estimate net carbon emission reduction.

Step 2. National Approval

• Designated National Authority (DNA) of the host country approves

the proposed CDM project against national sustainable
development objectives.
• In India, DNA is National Clean Development Mechanism Authority
(NCDMA).
• NCDMA comes under Ministry of Environment & Forests, Govt. of
India.
Step 3. Validation and Registration

• The PDD or baseline needs to be assessed and validated by an

independent organization, Designated Operational Entity (DOE).
• The DOEs are accredited by CDM Executive Board (CDM EB).
• DOEs are responsible for ensuring compliance of the proposed project
with CDM rules.
• CDM project registration is done by CDM EB on the recommendation of
DOE.

Step 4. Project Financing

• Investors provide capital for proposed CDM project.

• Contracts are signed for the sale of carbon.
Step 5. Monitoring

• The project developer monitors and records carbon emissions and

changes in baseline.
• Collects all relevant data for calculating GHG emission reduction by
the project activity in accordance with PDD.

Step 6. Verification and Certification

• A different DOE verifies carbon reductions and certifies the amount of

CERs generated by the CDM project.

Step 7. Issuance of CERs

• The CDM EB issues CERs.

The Host Country Approval Process

Submission of PCN and PDD with 2 CDs to

NCDMA

Circulation among NCDMA members

NCDMA
Presentation by Project Developer during meets once
NCDMA meeting in a month

Clarification / Additional information

required by NCDMA members

Host country approval

letter
 National CDM Authority

• Secretary E & F – Chairman

• Foreign secretary
• Finance secretary
• Secretary, DST
• Secretary, Planning Commission
• Joint Secretary (CC), MoEF
• Director (CC), MoEF – Member Secretary
 Activities eligible for CDM A/R Projects

Afforestation : on lands, which were not forested for the last 50 years.

Reforestation : on lands, where deforestation occurred before 31.12.1989.

 Definition of forests for A/R Projects

• Minimum area of land 0.05 – 1.0 ha.

• Tree crown cover 10-30 %

• Height of trees Trees with potential to reach a

minimum height of 2-5 m at maturity

• Any of the land areas that fulfill the above conditions are eligible for CDM A/R
projects.
‘Forest’ as defined by Indian DNA
 Land requirement for A/R Projects

Small scale CDM Projects

• The projects which result in net anthropogenic green house gases (GHGs) removals of
less than 16 kilotonnes of CO2 per year, which is equivalent to 4360 tonnes of carbon.

• Developed and implemented by low income communities or individuals.

• Land area requirement is 800-1000 ha for a fast growing species, that sequesters
upto 30 tonnes C per ha over six years with good silvicultural inputs.

Normal CDM Projects

• Projects other than small scale CDM projects that sequester more than 16 kilotonnes
of CO2 per year.
 Market rate of Carbon

• The price of carbon vary as per the demand and supply.

• Current price of sinks credits in existing carbon market range between 3 – 5 US $ per
tonne of carbon (per CER).

• These prices are expected to rise in the future.

• The current price can be seen on different websites, including Japan Carbon Fund
(JCF), Biocarbon Fund, Community Development Fund, World Bank’s PCF etc.
 Additionality
CDM A/R Projects should meet following criteria :

• Increase net carbon sequestration compared to what would have happened

otherwise.

• Do not result in the increased deforestation elsewhere.

• The project should lead to real, measurable and long term GHG mitigation.

• The additional GHG reductions are to be calculated with reference to a baseline.

• Changes (positive or negative) in carbon stocks on land can occur in the absence of
human intervention e.g. natural regeneration or degradation. These trends need to
be accounted for in the baseline.

• CDM A/R Projects must have multiple goals including mitigating GHG emissions,
contributing to sustainable development, conservation of biodiversity and natural
resources.
 Baseline

• Baseline for A/R Projects is the scenario that represents the sum of changes in
carbon stocks within project boundary that would have occurred in the absence of the
project.

• The carbon pools are :

• Above ground biomass

• Below ground biomass
• Litter
• Dead wood
• Soil organic carbon

• Double counting should be avoided.

• Lifetime of project cycle should be clearly mentioned.

 Leakage

• Increased deforestation rate elsewhere.

• Displacement of some baseline emissions e.g. livestock grazing.

• Increase emissions or reduces sequestration during part of the

project’s life e.g. during site preparation and planting. Such parameters
should be adjusted in the emission benefits of the project.
 Bundling of the Project

This is the concept of bringing together different parcels of land to form an

aggregate land size of the project to sequester upto 16 kilotonnes of CO 2 per
year.
 Who can help ?

Various organizations including NGOs in India are offering consultancies for

development of projects as per CDM criteria, modalities and procedures.
ICFRE and its regional institutes also offer consultancy for developing PDD.
 CDM Forestry Statistics

2
9
Sector-wise break up CERs expected till 2012 in India by
approved projects

Sectors CERs
Energy efficiency 14,24,51,223
Fuel switching 5,89,25,430
Industrial process 10,06,15,866
Waste management 59,84,821
Renewable energy 7,40,75,801
Renewable (biomass) 6,92,35,805
Forestry 9,84,090
Total 45,22,73,046
Investment in CDM projects

Year Investment in Rs. (Crores)

2003 358
2004 1794
2005 15933
2006 36451
2007 68691
2008 71703