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Abstract
Carbon Credits are a tradable permit scheme under UNFCCC (United Nations Framework Convention for Climate Change) which give the owner the right to emit one metric tonne of carbon-dioxide equivalent. They provide an efficient mechanism to reduce the green house gas emissions by monetizing the reduction in emissions. Rural India has a tremendous potential to earn carbon credits by setting up household based energy substitution or fuel switching projects like biogas plants, solar cookers and solar cells, smokeless chulhas etc. In this study, we propose a generalised mathematical model that will estimate the economic viability and feasibility of a Programmatic CDM (Clean Development Mechanism) based household biogas plant project for energy self sufficiency in rural India. The design variables are rank ordered using statistical analysis. The basis of this model is the research study conducted in 10 villages of Jhunjhunu district of Rajasthan, India spanning a population of around 31,000 people. This model can be applied to any village in India. It can calculate the number of years the Programmatic CDM based household biogas plant project should be sustained so that the income generated from the sale of carbon credits earned by the project makes the project economically viable.
Introduction
Global warming is an imminent catastrophe with irreversible consequences. The Kyoto Protocol was adopted in Kyoto, Japan on 11th December 1997 and entered into force on 16th February 2005. 180 countries have ratified the treaty to date. It aims to reduce the green house gas emissions by 5.2% against the 1990 levels over the five year period 2008-2012.
Developed countries are categorized under Annex 1 countries and are legally bound by the protocol while the developing nations, categorised as Non Annex 1 countries, which ratify the protocol are not legally bound by it. The Kyoto Protocol has three mechanisms: Joint Implementation (JI), Clean Development Mechanism (CDM) and International Emission Trading (IET).
The CDM mechanism allows Annex 1 countries to meet their reduction targets by implementing emission reduction projects in Non Annex-1 developing nations. A CER (certified emission reduction) is a certificate given by the CDM board to projects in developing countries to certify that they have reduced green house gas emissions by one metric tonne of carbon-di- oxide equivalent per year. These CERs are bought by the Annex 1 countries to meet their emission reduction targets.
Under Joint Implementation (JI), an Annex 1 party may implement an emission reduction project or a project that enhances removal by sinks in another Annex 1 country. It can use the resulting ERUs (emission reduction units) for meeting its target.
Under the International Emission Trading (IET) mechanism, the countries can trade their surplus credits in the international carbon credits market to those countries with quantified emission limitation and reduction commitments under the Kyoto Protocol. Amongst the developing nations, India is considered as one of the largest beneficiary of the carbon trade through the Clean Development Mechanism (CDM).
Methodology
Background
Global warming is caused due to the emission of greenhouse gases (GHGs) which get trapped in the atmosphere. Table 1 shows the global warming (GW) potential of gases. The potent green house gases are the following: carbon-di-oxide, methane, nitrous oxide, hydroflourocarbons, perflourocarbons and sulfur hexafluoride.
CDM projects are designed to have a leveraging effect on sustainable development [1, 2]. The outcomes of a CDM project must be aligned with the criteria for sustainable development of the host country. Clearance for sustainability is granted by the National CDM Authority and in India it is spearheaded by the Union ministry of environment and forests. The basic tenets of sustainable development are economic well being, environmental well being and technological well being.
Programmatic CDM is a new approach for developing CDM projects and is registered with UNFCCC as a PoA (Program of Activities). It is a voluntary coordinated action by a public or private entity consisting of unlimited number of CDM Project Activities (CPAs). A PoA can be formed of either large scale CPAs or of small scale CPAs. All projects under PoA must have an implementing entity authorized by host country DNAs (designated national authority).