MUMBAI
A global attempt to arrest climate change by providing firms with incentives to invest in green technology is being manipulated in India for profit. I
A global attempt to arrest climate change by providing firms with incentives to invest in green technology is being manipulated in India for profit. Instead of reducing carbon emissions, the Clean Development Mechanism, or CDM, has helped firms, mostly private corporations, raise huge sums virtually out of thin air.
Worse, as this three-part series will show, the manipulation and subsequent failure of CDM in India may have led to thousands of tonnes of greenhouse gases (GHGs) being released into the atmosphere.
DNA has found that several projects in the country that are earning huge sums through the sale of carbon credits are, in fact, ineligible for the CDM scheme. Promoters of these projects have manipulated and backdated documents to meet requirements as prescribed by the CDM executive board. Climate change disproportionately impacts developing countries and the poor in all countries. A majority of Indians dependent on agriculture are likely to get affected most by climate change due to their reliance on natural factors like the monsoon.
UNFCCC (United Nations Framework Convention on Climate Change) requires member countries to limit or reduce GHG emissions. CDM is a UN-run international GHG offsetting scheme that allows developing countries to earn credits by implementing projects that prevent the creation of, or that remove, greenhouse gases from the atmosphere. These credits, called carbon credits, can be sold to governments, businesses or individuals to offset excess emissions they generate.
The first carbon credit was issued in October 2005. The market price of one carbon credit (each credit is equal to one tonne of carbon dioxide) today is about €6 (Rs400). In 2008, it was nearly €24 (Rs1,500).
The National Clean Development Mechanism Authority (NCDMA) that functions under the Ministry of Environment and Forests (MoEF) approves projects for CDM status at the national level. According to the ministry, until March 2012, the NCDMA approved 2,195 projects for CDM status. The CDM executive board, a supervisory arm of UNFCCC, registered only 827 of these projects. A conservative estimate of the total revenue generated by the sale of carbon credits from these projects is around Rs10,000 crore.
Among others, big names such as Tata, ITC, Reliance, Jindal Steel, Bajaj, GFL, Adani have earned good returns under CDM.
THE FLAWED PROCEDURE
After the CDM project receives the consent of the respective government, it is validated by an accredited international organisation and then submitted to the CDM executive board that vets and registers it.
At all stages, authorities concerned have to validate and certify that: A) the project uses efficient and clean technology that is resulting in reduction of carbon emission (sustainability), and B) that it will be unviable to implement the project without carbon credit revenue. This key requirement is also known as the additionality clause.
When the project clears both tests, the carbon credits generated from the project are verified by accredited validation organisations after which they are available for sale.
An examination of several CDM projects in India shows that many neither fulfill the additionality clause nor are they sustainable; they are ineligible for CDM status.
The first problem is that validators tend to rely on the project developer’s claims of sustainability and additionality without verifying them independently. For instance, a captive power project of Jai Balaji Sponge Ltd in Burdwan district of West Bengal was granted CDM status in 2006. However, it has been subject to several penal actions by the West Bengal Pollution Control Board for violating environment laws. The unit has also faced closure on previous occasions for the same reason.
The NCDMA approves CDM proposals without conducting field inspections to verify whether the project fulfils the eligibility criteria. “It is taken for granted that a project applying for CDM status is automatically clean and sustainable,” says a Mumbai-based carbon consultant, who did not want to be named. No wonder then that 44% of the projects rejected by the CDM executive board until 2008 belonged to India.
An American consulate cable released by WikiLeaks makes the same point. No Indian project can meet the “additionality in investment criteria” to be eligible for carbon credits, says the cable. It quotes RK Sethi, former member secretary of the NCDMA, saying that the national authority responsible for evaluation and approval of Indian projects that reduce GHG emissions to earn credits in the global carbon market, i.e. NCDMA, simply takes the “project developer at his word” for clearing the additionality clause.
The CDM board has also warned validators on several occasions for their biased opinion while certifying projects. In 2010, the executive board suspended TÜV SÜD, a German validation company. “TÜV SÜD has been giving positive validation opinion even though there were concerns about additionality,” said the minutes of the board’s meeting. In November 2008, a Norwegian CDM project validation company, DNV, was also suspended. This company verified several CDM projects in India.
An example of DNV’s carelessness is Tata’s ultra-mega power projects (UMPPs) at Mundra. Even though Mathsy Kutty of DNV agreed that UMPPs in India would not qualify as CDM projects, it validated Tata’s UMPP that was later rejected by the CDM board because it didn’t fulfill the additionality clause.
However, the CDM board approved Anil Ambani’s UMPP at Sasan.
As per a WikiLeaks cable, Pratap Melampati, who works with the Reliance ADAG group, agreed that future power projects based on supercritical technology may fail to qualify under CDM as the technology becomes “commonly used” in India. This is because the government’s latest regulation says that use of supercritical technology is compulsory, not optional, for new power projects in India. Yet, Reliance was successful in claiming that the project would not have used supercritical technology — a clean and efficient but expensive technology — without CDM support, thus fulfilling the additionality clause and bagging CDM status.
In its 2009-10 annual report, Anil Ambani’s Reliance Power goes so far as to state that CDM is a “new revenue stream for the company” and claimed it would earn a minimum of Rs3,100 crore by selling carbon credits from its ultra-mega coal power project at Sasan and Krishnapatnam. This raises a question over the need for carbon credits revenue to finance the project.
Many more dubious projects have escaped the CDM executive board’s scrutiny. This is partly because of conflicts of interest within the executive board, says Katy Yan of International Rivers, a non-profit, environmental organisation. A report by International Rivers says that one glaring indication that most projects do not qualify under the additionality clause is that three-quarters of projects were already up and running at the time they were approved by the CDM.
“CDM may have helped people think about air pollution but it has not resulted in any significant technology transfer or sustainable development. It has ended up as a capitalistic tool to take care of some of the immediate problems at minimal costs,” says Amar Mody, an independent consultant and carbon market specialist based in Mumbai who has represented various carbon funds and international brokerage firms in India for more than seven years.
“Of the 60 CDM projects that I have evaluated, there appeared not to be one that actually reduced emissions,” admitted Soumitra Ghosh of North Eastern Society for Preservation of Nature and Wildlife.
Delhi Assembly Elections: AAP releases first list of 11 candidates for 2025 polls
Adani Group's FIRST REACTION after US indicts Gautam Adani in alleged bribery case
Instagram introduces new feature, know how to reset app's algorithm, change your feed
Oppo Find X8 and X8 Pro launched in India, check specifications, price, other details
Charges against Gautam Adani: BJP's scathing attack on Congress, questions timing of development
Jasprit Bumrah's BIG statement on taking up Perth test captaincy, says, 'tactically better...'
Blackout on breaks: Company imposes no-sick-leave policy until 2025
Drug-laden terrorists on India's western, northern frontiers
Mohammad Shami trolls Sanjay Manjrekar over IPL auction bid prediction, says, 'Baba ki...'
IND vs AUS Test: When and where to watch 1st match of Border-Gavaskar trophy, know details here
CAQM amends Grap Stages III, IV, enforces stricter measures in Delhi-NCR amid air pollution woes
Malayalam actor Meghanathan passes away at 60 after suffering from...
Adani Green Energy's FIRST reaction after US indicts Gautam Adani in alleged bribery case
'Keep me out of...': Pakistani Instagram star Mathira on MMS leak controversy
Delhi Air Pollution: AQI marginally improves from 'severe' to 'very poor' category
'I love him, he loves me! Why hurt...': Rekha's bold confession about Amitabh Bachchan goes viral
Meet man, IITian who built Rs 5493 crore firm, has this Mukesh Ambani connection, he is from...
Shillong Teer Results TODAY November 21, 2024 Live Updates: Check winning numbers here
‘I didn’t have time to…’: When AR Rahman revealed having ‘agreement’ before marriage to Saira Banu
Viral video: Woman's sizzling belly dance to 'Namak' impresses internet, watch
Hardik Pandya banned, Mumbai Indians captain to miss first match of IPL 2025 due to...
Meet man who studied at IIM, IIT, then built Rs 1160000000 company, got inspired by…
Meet woman, who quit as dentist for UPSC exam, became IAS officer with AIR...
Viral video: Little girl steals hearts with her adorable dance to 'o meri cutie', watch
Gautam Adani's company signs another pact to acquire 100% stake in...
CBSE Date Sheet 2025 announced: Class 10, 12 board exams to begin from...
Apollena: Aditi Sharma on how space-based drama encourage young girls, says 'no matter how many...'
Is Mia Khalifa dating ex-Man City star Julian Alvarez? Former adult star says 'It certainly...'
IPL 2025 auction RTM rule: How this year’s right-to-match card is different from previous seasons
'Virat Kohli is trying to...': Shoaib Akhtar makes BIG statement on Champions Trophy 2025
Maharashtra Election 2024: Mukesh Ambani and family cast their votes in Mumbai
Centre revises performance-linked incentive scheme for THESE employees; check details
Manipur violence: Prohibitory orders to be relaxed in Imphal Valley for 7 hours
Jharkhand Exit Poll Results 2024: 36-41 seats predicted for BJP, JMM to secure…
Elon Musk faces big threat after million of users switch from X to Jack Dorsey's Bluesky
ICC Rankings: Hardik Pandya reclaims No. 1 T20I all-rounder spot, Tilak Varma enters top 10
DNA Verified: Is retirement age for central govt employees increasing to 62? Know truth here
Android 16 preview unveiled by Google: Who can access it? Here's all you need to know
Anti-pollution diet: Foods that can help fight air pollution naturally
Tech millionaire Bryan Johnson's face 'blows up' after anti-aging experiment; here’s how
Expanding Horizons: GOCL Corporation’s Strategic Diversification in Electronics and Metal Cladding
TrezarBit App Review 2024: Legit Trading Platform? Quick Facts!
Meet man who worked closely with Isha Ambani, Mukesh Ambani, set to take new role as...
Meet man, lifted bricks 8 hours a day, cracked NEET by studying on broken phone, he scored...
US embassy in Kyiv shuts down after receiving warning of 'potential significant' Russian air attack
Anil Ambani's next BIG step, Reliance Group announces new plan for...
Jaguar reveals new brand logo, identity ahead of EV debut
Playing with Fire: Will Putin risk nuclear Armageddon before Trump takes office?
Gautam Adani's BIG Rs 16877 crore plan to take on Mukesh Ambani, set to build Mumbai's largest...
Ranjit Kumar Gupta: Pioneering communication in a connected world