Sunday, October 4, 2009

Clean Development Mechanism

Before starting about CDM let us understand, what is Kyoto Protocol?
The Kyoto Protocol (Article 12 of this protocol states all the regulating framework of the CDM) was established in 1997 as an international agreement on emission reduction of greenhouse gases (GHG). The Protocol defines mandatory GHG emission targets for industrialized countries (Annex I countries), and voluntary participation for developing countries (Non-Annex I countries). The Kyoto protocol has 175 member countries, and 36 of these countries have committed to reduce their GHG emissions by five percent in the period from 2008 to 2012 compared to emissions in 1990. The rest of the countries have no legal binding emission targets. There are many gases that contribute to the green house effect. The Kyoto Protocol deals with six of them.

Gas Global Warming Potential
Carbon dioxide (CO2) 1
Methane (CH4) 21
Nitrous oxide (N2O) 310
Hydro fluorocarbons (HFCs) 140-11,700
Per fluorocarbons (PFCs) 7,000-9,200
Sulphur hexafluoride (SF6) 23,900
The Kyoto protocol has defined three mechanisms to ensure flexibility and cost effectiveness:
Emission quota trading: Annex I countries are allowed to trade emission quotas. Example: The European Trading System (ETS). In January 2005, several European sectors including energy, metals, minerals and pulp and paper came under EU Emissions trading directive which sets carbon dioxide gas emission limits. If a company emits lower than its allowed limit, it may sell its extra allowance to other companies who are not meeting their targets. The penalty for violation is 40 Euro for every tonne of Carbon dioxide over the limit, and a requirement to purchase the missing emission allowances.
Joint Implementation (JI): Annex I countries are allowed to invest in emission reduction projects in other Annex I countries as an alternative to emission reduction in their own country.
Clean Development Mechanism (CDM): Annex I countries are allowed to invest in emission reduction projects in Non- Annex I countries as an alternative to emission reduction projects in their own country.
Also, CDM allows Annex I (industrialized) countries to meet their emission reduction targets by paying for green house gas emission reduction in non-Annex I (developing) countries.

For example: - A company in Brazil (a non Annex I country) switches from coal power to biomass. The CDM board certifies that by doing this the company has reduced Carbon dioxide emissions by 100,000 tonnes per year. It is issued with 100,000 CER’s (Certified Emission Reductions). Under the Kyoto Protocol, the United Kingdom (an Annex I country) has to reduce its green house gas emissions by 1 million tonnes of carbon dioxide each year. If it purchases the 100,000 CER’s from the Brazilian company, this target reduces from 1million tonnes/year to 900,000 tonnes per year making the goal easier to achieve. [A CER is given by the CDM Executive Board to projects in developing countries to certify they have reduced green house gas emissions by one tonne of carbon dioxide per year].

Where is CDM Applicable?
· Wind, Solar, Biomass, Hydro power projects.
· Waste Management Process.
· Energy Efficiency measures.
· Fuel Switching. Like switching from fossil fuel to green fuel like Biomass. Following is the table showing the quantity of CO2 being saved from various projects.

-Electricity Saving
1KWh= 0.8 to 0.9 kg CO2

-Power Generation (Renewable)
1MW= 4000-5000 ton CO2

-Coal Saving
1Kg= 1.3-1.6 kg CO2

-Oil Saving
1litre Oil= 0.35-0.45 kg CO2

-NG based Power Generation
1 kg NG burning/ Saving= 2.4-2.5 kg CO2

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