Indian companies' CDM projects pollute environment

Most clean projects cleared on face value and are based on tall claims

The process through which industries including Tata and Reliance are seeking carbon credits under the Clean Development Mechanism (CDM) (see: What is CDM?) is nothing but a farce, reveals a report.

The process through which industries including Tata and Reliance are seeking carbon credits under the Clean Development Mechanism (CDM) is nothing but a farce, reveals a report
It notes Project Development Document (PDD) forms submitted by Indian CDM projects are full of half-truths and lies
The report states that despite the presence of a designated authority—the National CDM Authority (NCDMA)—to clear such projects, most of the projects are allowed on its face value and tall claims made in PDD
The report notes corporates that seldom comply with CDM are reaping maximum benefits from these projects
The profits that Indian industries have made by cashing in on the Certified Emission Reductions (CER) points are “astounding”, the report states

The CDM authority does not do any field inspections to verify whether a project seeking CDM approval fulfils the eligibility criteria,” the report, prepared after a survey of 34 separate CDM projects, states. “Projects are accorded approval solely on the basis of paperwork they submit; it is taken for granted that a project applying for CDM status is automatically clean and sustainable; no matter if it fouls up the atmosphere and local people’s lives with fly ash and smoke, displaces people and their traditional livelihoods through mostly illegal land grab and ritually breaks every little promise of employment and area development made to the communities,” the report adds.

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On the other hand, the report notes corporates that seldom comply with CDM are reaping maximum benefits from these projects. The profits that Indian industries have made by cashing in on the Certified Emission Reductions (CER) points are “astounding”, the report states. For example, the report points, till early 2008, the Jindal group made Rs 11 billion from selling “supposedly reduced emissions” (1.3-million CERs) at their steel plant in Karnataka. Moreover, Tata Motors sold 1,63,784 CERs from clean wind projects at the rate of 15.7 Euros/CER in 2007. Tatas’ sponge iron projects in Odisha are set to yield 31,762 CERs every year. In 2006-07 alone, Godavari Fertilisers and Chemicals Limited (GFCL) group’s earning from carbon money was twice its total corporate assets. Reliance is now claiming it will earn a minimum of Rs 3,100 crore by selling CERs.

What is CDM?

The United Nations Framework Convention on Climate Change (UNFCCC)–adopted in 1992 and bought into force in 1994–established an international framework to address global climate change through stabilisation of greenhouse gas concentrations in the earth’s atmosphere. In 1997, at Kyoto, the world’s industrialised countries agreed, in principle, to cut their emissions of greenhouse gases by about five per cent from 1990 levels, by implementing any of these three mechanisms—joint implementation, CDM and emission trading.

The CDM is one of the flexible arrangements under the Kyoto protocol, supporting the implementation of sustainable and environment-friendly technologies in developing countries by which emissions could be cut down. By implementing such projects countries, earn CER credits, each equivalent to one tonne of CO2. These CERs can be traded and sold, and used by industrialised countries to a meet a part of their emission reduction targets under the Kyoto Protocol.

As on 16 May 2011, with 6,147 CDM projects in various parts of the world, a total of 3,034 projects have been registered with the UNFCCC.

All these projects will help reduce 2,756,999 thousand tonnes and 9,067,564 thousand tonnes of carbon dioxide by the end of 2012 and 2020, respectively (provided the UNFCCC registers them all).

The registered projects have already been issued a total of 605 million CERs.

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