1. CLEAN DEVELOPMENT
MECHANISM
CHANDAN CHAMAN

2. In the next few minutes…
Climate change – challenge and global action
Monetizing carbon – market, buyers, price drivers
Corporate Sector –
opportunity, preparedness, implications

3. Climate Change
Rising temperature: 0.6 oC since the
late 1800s, 1.4 – 5.8 oC by 2100
Source: Greenhouse gasses from fossil
fuel combustion and forest clearing
Impacts: extreme weather events
(storms, floods and droughts), sea
level rise, lower agricultural yields, etc.

4. Global Warming
Changes to the natural greenhouse effect are a result of man-made
emissions of Greenhouse Gases (GHG):
Carbon dioxide
Methane
Nitrous oxide
Hydro fluorocarbons
Per fluorocarbons
Sulphur hexafluoride

5. Green House gases &
Global Warming Potential
Green House Gas GWP
Carbon dioxide 1
Methane 21
Nitrous oxide 310
Per fluorocarbons upto 9500
Hydro fluorocarbons upto 11,700
Sulphur hexafluororide 23,900
Human activities are increasing the concentration
of Green House Gases in the atmosphere.
This enhances the green house effect, commonly
known as “ Climate Change ”

6. Kyoto Protocol
Kyoto Protocol is an international agreement agreed
at the Third Conference of Parties (COP3) to the
UNFCCC held in December 1997 in Kyoto, Japan to
reduce worldwide emissions of greenhouse gases.
 Aims of reducing the overall GHG emission by at least 5.2% below 1990 level
in 2008-2012 commitment period.
 Establishes three mechanism to supplement national actions to achieve real,
long term, measurable and cost effective GHG reduction.
Clean Development Mechanism( CDM )
Joint Implementation (JI)
International Emission Trading (ET)

7. Kyoto Protocol : A History
Rio Conference: 154 states signed
1992 the UN Framework Convention on
Climate Change (UNFCCC)
UNFCCC entered into force
on 21 March 1994 1994
IPCC’s 2nd report concluded that
“the balance of evidence suggests
1995 that there’s a discernible human
The Kyoto Protocol was adopted in influence on global climate.”
1997 giving industrialised countries
a legally binding commitment to 1997
reduce their GHG emissions.
2000 First credits from GHG emission
reduction projects
Finalisation of the operational
details of the Kyoto Protocol at 2001
COP 7 in Marrakech Nov. 2001

8. Emission Reduction
Actual emission reduction will be much
larger than 5%:
6 Numbers for
industrialised
countries
Source:
4 -24% -5% ABB Corporate
Research
GtC
2
1990 2000 2010 2020

9. Clean Development Mechanism
CDM projects allow entities in Annex I countries that
have ratified the Kyoto Protocol to invest in projects
that reduce GHGs in non-Annex I countries while
contributing to sustainable development. By
investing in non-Annex I countries, investors from
Annex I countries can earn CERs that can be used to
meet GHG reduction under the Kyoto Protocol.
GOALS
To help mitigate climate change
To help non-Annex I countries achieve sustainable development
To help Annex I countries attain their emission reduction commitments

10. CDM Project Cycle
Awareness Creation Registration
Identification Implementation
Project Design Implementation
Project documentation Monitoring/Reporting
Validation Verification
Certification

11. Road Map for Managing Carbon Assets
5. Credit-based emissions reduction
projects:
• Identify opportunities (e.g. fuel switch, renewables)
• Kyoto projects - CDM (bilateral and multilateral
schemes)
• Trade, bank or retire credits
2. Commit to an emissions target:
1. Determine emissions
inventory:
• Set scope - e.g. direct/indirect 4. Emissions trading (corporate/
• Define measurement and reporting domestic/ international):
protocol
• Establish robust internal data
controls
• Independent verification 3. Identify and implement
internal reduction
measures:
• Energy efficiency improvements
• GHG abatement (low carbon
alternatives or renewables)
• Loss control (e.g. methane losses)

12. Where is CDM applicable ?????..
Fuel Switching
--Fossil Fuel to Greener fuel
--Petroleum to Bio Diesel
Energy efficiency measures related to In Waste management
- Boilers - ‘Waste to Energy’ projects
- Pumps - Utilization of waste & waste water
- Turbine emission for generation of energy
- Efficient cooling system for captive power generation
In Power Sector In Transport
- New efficient generation techinique - Fuel switching from gasoline &
- Reduction in technical T&D losses diesel to natural gas
- Carbon dioxide Sequestration - Replacement of transportation of
- Switching from coal to other fuels Renewable Energy certain raw material from road to
like natural gases. --Wind Power through pipilines
--Solar
--Biomass Power
--Hydel Power

13. Carbon Trading potential
Carbon has become a tradable commodity!
The carbon market is growing rapidly and so are opportunities. Credits from
the clean development mechanism (CDM) and joint implementation (JI)
accounted for 226m tonnes worth €2bn in the first half of 2007.
The overall emission gap of Japan, Canada and the old EU member countries
for the period 2008-2012 will be more than 3 Billion tonnes of CO2 equivalent
Russia and the countries of Eastern Europe have a surplus of several billion
tonnes
If Russia acts sensibly, CDM market could be about 2 billion Euros or Rs
10,000 Crores
Already more than 600 million Euros have been committed by government
buyers.

14. CDM in INDIA : Major Milestones
India signed Kyoto Protocol in December 1997 & ratified in
August, 2002
October 2002, COP 8 hosted by India
Established National CDM Authority in December 2003
National Strategy Study carried in 2005
March 05, first project from India registered
October 05, first project received CERs
15%
2%
31% India
2%
2%
China
3% Brazil
Mexico
8% Malaysia
Philippines
South Korea
11% Chile
Other
26%
Percent of CDM projects by country

15. CDM : India's Potential
• Steady development in last 50 years of independence
from 3.5% GDP growth to 5.5, 6 and now 9-9.5%
• Economic growth is accompanied by an increasing per
capita income and changes in life styles. With an
effect on the energy demand as well.
• The key issues which have energy implications are
– rising population using commercial energy,
– need for economic growth,
– access to adequate commercial energy supplies
– rational energy pricing regime,
– improvements in energy efficiency
– matching R&D base and environmental protection.

16. Benefits under CDM to India
• India – world‘s sixth largest CO2 emitter, although per capita
emission is small (0,2 tons) compared to USA (5,2 tons)
• CDM could help to overcome the financial constraints
associated with the adoption of cleaner technologies
• Analysis shows that renewable energy technologies are
among the low cost options for carbon mitigation
• Total GHG emission in India is estimated at 1235 million
tonnes in 1995. CO2 Contributes 63% and Methane 36% of
GHG

17. Potential CDM Sectors in India
Power sector : Alternate energy source and efficiency improvement of existing plants
Renewable Energy : Biomass, wind, solar and hydro power
Oil & Gas : Fuel switching & high conversion efficiency
Industry : Energy efficiency
Transport : Fuel switching
40% 34%
29%
age
26%
30%
Percenta
20%
7%
10% 2% 1%
0%
Industry
Efficiency
ndfill gas
enewable
enewable
Switch
Biomass
Energy
Fuel
Lan
B
Re
Re
E
Se ctors

18. THANK YOU