Through the Kyoto Protocol mechanisms,
developed countries invest in energy efficiency or renewable
energy projects in developing countries such as
India,
China, Brazil, Asian and
African countries to help reduce their emissions.
While the
developing countries
draw up regions of implementation for development, the developed countries provide technology transfers, financial, political or scientific returns. Thus, the binding targets,
though common are
differentiated.
This, while facilitating sustainable development in developing
countries, allows the developed countries to
earn emission rights and helps
them to meet their emissions reduction
targets at much lower cost.
It has proven to be a win-win mechanism for
the developing and the developed countries in de-carbonizing the world.
Within a few years after the Protocol was effected, more than 800
projects were registered. By 2008 year
end, there were 4 200 CDM projects, and by 2012,
8 300 projects are expected.
Under the Kyoto Protocol, three
market-based mechanisms are set to help meet their targets in a cost
effective and 'green' way:
1. Emissions Trading
Helps industrialized countries to meet their Kyoto
commitments
by reducing emissions of carbon from the atmosphere
in other developing countries in a cost-effective way (carbon credit).
These countries are allowed to use emissions trading to meet
their obligations if they maintain or increase their greenhouse gas
emissions. Emissions trading allows nations that can easily meet
their targets to sell credits to those that cannot.
The carbon credit system offers incentives for all parties to
reduce emissions.
A carbon credit
is given for the reduction
of every ton of carbon prevented from being emitted into the
atmosphere. Credits are
awarded to countries or groups that have reduced their green house
gases below their emission quota. Developed countries can
purchase these carbon credits to meet their reduction target. Carbon credits can
be traded in the international market on
special exchanges.
Insiders estimate the cost of a carbon
credit as around 27 Euros in the European Union, while in
China the same credit would require
foreign investors spend around 7 -9 Euros only.
2. Clean Development Mechanism ( CDM )
and Sustainable Development
The CDM, the main feature of the Kyoto
Protocol,
serves not only as an instrument for combating climate change but
also as an important stimulus package to fund developing country in
sustainable development, and endless
source of business opportunities for corporations, through technology
transfer and investment. It facilitates the trade of carbon credits between developed
countries and developing countries. The mechanism is a win-win solution for
both both parties.
The CDM has identified various categories of
projects eligible for carbon credits.
Generation of
renewable or sustainable energies,
such as wind farms, biomass energy, or hydroelectric dams.
Reduction in energy demands including energy efficient projects
Carbon preservation via avoidance of deforestation
and reforestation
Management of animal, industrial and municipal wastes leading to
abatement of landfill methane,
Sequestration of carbon
underground
Destruction of
industrial pollutants like HFC, PFC
3. Joint implementation ( JI ) Joint implementation is a mechanism that allows a country with an
emission reduction or limitation commitment under the Kyoto Protocol
(Annex B Party) to earn emission reduction units (ERUs) from an
emission-reduction or emission removal project in another Annex B
Party, each equivalent to one tonne of CO2, which can be counted
towards meeting its Kyoto target.
Joint implementation offers Parties a flexible and cost-efficient
means of fulfilling a part of their Kyoto commitments, while the
host Party benefits from foreign investment and technology transfer.
The Kyoto Protocol will expire in 2012 and governments are
working hard to agree on a new treaty by the end of 2009.
With the inclusion of Australia as its last member after the new
primer minister Kevin Rudd signed the Protocol pact, everyone is
hoping that the new pact will include the United States,
who is now the second biggest emitter of carbon dioxide after China.
(Pic: K. Rudd of Australia)
In addition, many feel that the new pact
should bind developing nations like China (overtook the US as the
biggest carbon dioxide emitter in 2006), India, Brazil and others
who are among the top polluters, to emissions targets.
UNEP.- Year End (2008) Snapshot of the CDM
The table below shows the
cumulative number of CDM projects in all three project phases:
Validation, Requesting Registration and Registered.
Host Region
2004
2005
2006
2007
Nov
2008
2012
Asia & Pacific
18
305
865
2 074
3 240
76%
8 300
Latin America
41
208
454
626
814
19%
1 600
Africa
2
15
34
52
87
2%
250
Middle-East
0
1
9
28
54
1%
100
E. Europe/C. A.
0
5
14
29
42
1%
80
Total global
61
534
1 376
2 809
4 237
100%
8 300
It is estimated that by 2012, over
8,300 CDM projects may be up and running or in the pipeline
generating financial flows amounting to over $30 billion, involving
a more spread out global participation.
The numbers tell the story of success of the Protocol.
"The CDM and the carbon
markets as a whole are one of the great success
stories of international cooperative action on climate
change." said an UNEP official.
The Kyoto Protocol has been hailed as a lifeline to the Earth from
disastrous human-caused effects of a warming global climate.
