Indian enterprises started preparing projects under this mechanism in 2002. The government, recognising this trend, created the National CDM authority in 2003. The submitted projects span the broad horizon of industries – renewables, power, transport and waste management sectors.
It has, however, been noted that Indian submitted projects do not enjoy high rank when it comes to the number of approved projects. Further, the success rate of approved projects at 14% is very low when compared to 50 to 100% in Bolivia, Chile, South Korea and Vietnam.
The success rate of approval of projects and average quantum of CER per project being very low, the benefits to India from CDM will be insignificant considering the vast potential available.
In order to strengthen the intellectual infrastructure involved in this, FICCI proposed a project which will be funded by Norwegian Embassy in New Delhi. The embassy has approved Three and a Half million Norwegian Kroners for implementing various activities under this project. The project has been designed in two phases and is expected to be completed in two years (by 2007).
Background
Both India and Norway consider climate change as the most serious environmental threat facing the world today. Unabated emission of green house gases (GHGs) would lead to adverse socio, economic and environmental consequences in both these countries, though the magnitude of impact would be much severe in India. National governments have varied responsibilities, with the developed ones having emission reduction targets with in a stipulated timeframe. The Kyoto Protocol, under the United Nations Framework Convention on Climate Change (UNFCC), fixes emission reduction responsibilities on what is called Annex I industrialised countries. India is not an Annex I country and hence has no emission reduction targets. The Protocol also devised the CDM as one of three ways to help these Annex I countries to achieve their targets.
CDM helps Annex I countries to invest in projects in developing countries that would lead to reduction in GHGs. The developing countries benefit by increased investment in projects resulting in sustainable development. A market driven mechanism, CDM yields Certified Emission Reductions (CERs) which are tradable. But developing a good CDM project is a complicated process that entail strong capacity, support and funds. India is considered to be the hotbed for CDM projects but lacks adequate capacity and investment that are needed to develop attractive projects.
The project
The project ‘CDM in India’, was developed by FICCI with an aim to promote CDM and build the capacity of the private sector in developing good CDM projects. The Norwegian Embassy realising the importance of the role of the private sector in CDM agreed to support the project for a three year period. Implemented in three phases, this project aims to identify, develop and implement 5 pilot CDM projects that would give extensive exposure to various stakeholders in the entire cycle of CDM.
FICCI plans to conduct similar seminars in other metros and cities of India to raise awareness and develop attractive CDM projects. FICCI, as one of the most influential business federations in India with a countrywide network, is uniquely placed to promote the CDM concept among its members as well as other associated industries. The Government of India supports initiatives that promote CDM development in India.
Link: www.cdmindia.nic.in and www.ficci.com