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CDM, development benefits and energy project in India: Issues and concerns

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Courtesy of CTG Advisory Services India Pvt. Ltd.

India is perceived to be one of the most attractive Non-Annex I countries for CDM project development. More than 28.18% of total registered CDM projects of United Nations Framework Convention on Climate Change (UNFCCC) are from India, in the areas of renewable energy, energy efficiency in industries and fossil fuel switching. This paper examines the share of energy (renewable and non-renewable) projects in India which have stated in the Project Design Document (PDD) about the socio-economic component of sustainable development commitments of CDM projects.

The authors investigated to see if they can make any impact on sustainable development, since the goal of sustainable development, Poverty and equity issues are inextricably linked in the analysis of climate change and the global governance response. The authors identified that tackling equity and poverty issues is now key for environmentally effective global governance cooperation to ‘mitigate’ climate change, as evidenced by the approval of three new ‘adaptation’ funds from the UNFCCC process.

The study concludes that out of 396 CDM projects, submitted for registration in UNFCCC, only 32 energy based projects have comparatively strong contribution to sustainable development and poverty alleviation. Nearly all the projects have a business orientation and are not directed to the development of socio-economic domain of the country. Another important finding of this paper is the long time lag between global consultations to registration of CDM projects from India (average 2 years) and predominance of small scale projects, which also played a negative role in percolating down the development benefits to the community.

The paper recommended that for CDM to emerge as a “win–win” strategy, projects should be reviewed by Executive Board (EB) of UNFCCC and Designated National Authority (DNA) under the purview of environmental additionality (in addition to combined tools of additionality) which must be demonstrated by project proponents under specific tools under the approved baseline and monitoring methodologies. Indeed, to exercise this objective, UNFCCC must revise the exiting stereotypic methodologies, which have been developed with a ‘project’ and ‘business’ motives.

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