Kyoto+Protocol+and+CDM

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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).


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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).


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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.

Kyoto Protocol came into force on 16

th

February 2005, following signing byRussia.

The main conditions of this protocol were :

Minimum 55 signatories

With minimum 55% of total CO2 emission


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2009 Deloitte LLP. All ri ghts reserved.

1988

1990

1992

1997

2005

2008

2012

IPCC constituted

IPCC GHG inventory report

Rio Earth Summit & birth

of UNFCCC

Kyoto Protocol adopted

Kyoto Protocol

comes into force

First commitment period

starts

First commitment period

ends

?

International Action on Climate Change

Carbon

Market

evolved


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Forests as Carbon Sink


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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)


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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.


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Annex 1 Countries and their reduction commitment

Country Reduction

commitment (%)

Country Reduction

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


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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.


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Clean Development MechanismAfforestation & Reforestation Projects


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Type of Projects

Renewable energy (wind, biomass, solar, hydro)

Switching to alternate fuels

Energy efficiency

Waste management

Oil & Gas

Agriculture

Carbon sequestration in forests


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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.


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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.


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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.


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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.


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Submission of PCN and PDD with 2 CDs to

NCDMA

Circulation among NCDMA members

Presentation by Project Developer during

NCDMA meeting

Clarification / Additional informationrequired by NCDMA members

Host country approval

letter

NCDMA

meets once

in a month

The Host Country Approval Process


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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


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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.


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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 aminimum height of2-5 m at maturity

Any of the land areas that fulfill the above conditions are eligible for CDM A/R

projects.


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Forest as defined by Indian DNA

Eligible Forest

Treeheight = 2

metres

Minimumland area

= 0.05hectare

Minimumtree crown

cover =15%


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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.


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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 Banks PCF etc.


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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.


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Baseline

Baseline for A/R Projects is the scenario that represents the sum of changes incarbon 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.


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Leakage

Increased deforestation rate elsewhere.

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

Increase emissions or reduces sequestration during part of theprojects life e.g. during site preparation and planting. Such parameters

should be adjusted in the emission benefits of the project.


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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 CO2

per

year.


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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.


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CDM Forestry Statistics

Total globally - 8 (0.36% of all registered projects)

In India - 2

CDM A/R Registered projects

11 of 1421 pipeline projects are from forestry, i.e. 0.77 %of incoming projects

12 Large Scale

6 Small Scale (


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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 59,84,821Renewable energy 7,40,75,801

Renewable (biomass) 6,92,35,805

Forestry 9,84,090

Total 45,22,73,046


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Investment in CDM projects

Year Investmentin Rs. (Crores)

2003 358

2004 1794

2005 15933

2006 36451

2007 68691

2008 71703


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