Table 1. Potential and utilization (power generation) in lndia . Harnessed (MW) Sources/systems Potentıal (MW) (as at January 2002) Sources/systems Wind power Small hydro power Waste-to-energy Solar power 19,500 45,000 15,000 1700 n/a 358 1507 1406 17 1.8 Source: lndia Perspective on Clean Development Mechanism for Renewables, Global Conference - Green 2002: Agenda for lndustries, New Delhi, lndia Certification Certification is the final planning stage far any CDM projeci. it involves the OE certifying, in writing, that the projeci should meet its predicted GHG emissions reduction within the given time period. The OE will report to the investor, other parties involved and the EB whether the CDM projeci has been certified or not. An alternative 'certification', proposed by the WWF, is its 'gold standard'. Projects will only be considered if they meet certain criteria. Only renewable energy or demand-side energy efficiency projects are allowed and projects must pass a strict 'additionality test' to screen aut projects which would have been developed without the benefit of the CDM. in addition, a methodology deploying environmental and social indicators used to check that the projeci makes a significant contribution to sustainable development. Small-scale and fast-track projects Developers of small projects, in particular DE schemes, face relatively high transaction costs (including those related to projeci search, negotiations, preparation and implementation). This has led to the EB taking action to simplify the application process in order to encourage smaller projeci developments. The three projeci categories benefiting from these arrangements are: O Renewable energy projects smaller than 15 MWe O Energy efficiency projects which reduce energy consumption, on the supply and/or demand side by less than 15 GWh/year O Other projeci activities which both reduce emissions by sources and directly emil less than 15 ktCO2/year.5 Projects that fail into these categories will be 'fast-tracked'. Fast tracking implies that: O The requirements far the projeci design document are reduced O There are simplified procedures far baseline and monitoring regulations O The same OE may undertake validation, verification and certification MAKALE / ARTICLE SOME KEY ISSUES Additionality The Kyoto Protocol and EB guidelines are reasonably clear: projects should only be approved if they are seen to be additional, that is, they would not have laken place without the CDM. Additionality is difficult to prove, but it is the ultimate responsibility of the EB to decide whether a projeci would have gone ahead without the CDM. To make the CDM less vulnerable, it has been argued that the EB should make '. . .eligibility criteria more restrictive, additionality testing more rigorous, and baseline emisssions levels more stringent and/or dynamically 6 updated.' lf a projeci, through being wholly or partly non-additional, simply causes an economic shift of emissions from an Annex 1 country to the host country with no legally binding emissions limit, then little - if any - real emission reduction activity takes place. This scenario is known as 'leakage'. Baseline assessment Baseline calculations are arguably the most important within the CDM application process. The baseline calculation has a significant bearing on the number of credits awarded to a projeci. Because there is no standardized means of calculating baselines, some uncertainty may arise. The EB panel that evaluates baseline methodology considers every individual application and makes a judgment on whether the baseline methodology proposed is appropriate. Measurability As well as reducing greenhouse gas emissions, the CDM aims alsa to promote economic efficiency and the use of environmentally friendly technologies to enhance developing country capabilities and to lead to long-term sustainability. However, how these macro-economic benefits can be quantified is somewhat problematic. CDM markets lf the CDM is to achieve its goals - emissions reductions and capital inflows aimed at sustainable development - then investors must be drawn towards it. The primary attraction of the CDM is the enormous potential to create CERs at a lower cost than could be achieved elsewhere. Furthermore, the CDM creates an opportunity to invest in emerging markets. CDM project location Various factors will determine whether the host country is potentially attractive to a CDM investor. These include:7 O Whether the country has ratified the Protocol O The overall investment climate in host country O The host country's attitude towards the CDM O The speed of consideration of projects by the host country O The techno-economic potential far emissions reduction. ENERJi & KOJENERASYON DÜNYASI 65
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