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CDM -the Scam & the Redemption

23 Sep

In the absence of any monitoring system under the UN’s Clean Development Mechanism or CDM (see box), DNA has found that several large projects in India that have been declared green and sustainable under the scheme are not only polluting the local environment but were also established by violating various environment laws. However, because of their status, these firms are permitted to sell carbon credits in the market, earning huge revenue in the process. These are the paragraphs from a superb investigative Journalism by DNA corespondent -Gangadhar S Patil.

In his article, Carbon Credit Fraud: How big firms faked green to mint gold he goes on to say – High cost and uncertainty ensure that many genuinely clean and sustainable projects fail to attain CDM status. These projects, handled by small-time developers, fail to attain CDM status because of the high cost involved in the application and verification process. Even if they manage to pass these hurdles, they don’t earn enough carbon credits to attract real traders in the market.

What Mr. Patil, infers is more horrifying than just the manipulation of the scheme to amass wealth, it is down-right criminal, if true.

Absorptions bands in the Earth's atmosphere cr...

Absorptions bands in the Earth’s atmosphere created by greenhouse gases and the resulting effects on transmitted radiation. (Photo credit: Wikipedia)

Are firms deliberately overproducing greenhouse gases (GHG) for the sole purpose of destroying them in order to earn revenue through the sale of carbon credits under the clean development mechanism or CDM scheme? The first indication is the fact that an analysis of the total carbon credits issued to projects across the globe, including India, shows that over 50 per cent of the total carbon credits issued until July 2012 were for the destruction of a deadly greenhouse gas called HFC-23 (Hydro Fluoro Carbons-23). It is 11,700 times more potent a greenhouse gas than carbon dioxide and is created during the manufacture of HCFC-22, a gas used in refrigerators and air conditioners.

In comparison, renewable energy projects like wind, solar and biomass, together, account for less than 30 per cent of the total carbon credits issued in India; the figure is 20 per cent for the world. The CDM scheme allows firms manufacturing HCFC-22 to earn huge carbon credits by destroying its by-product, HFC-23. Since the cost of producing HCFC-22 is lower than the revenue generated by the sale of carbon credits issued for destroying HFC-23, it is possible that HCFC-22 is being manufactured solely for the purpose of destroying its by-product and earning carbon credits instead.

English: Greenhouse Gases

English: Greenhouse Gases (Photo credit: Wikipedia)

The second red flag is the fact that despite a sharp fall in the price of HCFC-22 due to supply exceeding demand and steep global economic recession, the production of this GHG has continued to remain at the same level…….Experts are not clear about what is happening to the excess HCFC-22 produced. Some believe that companies could be stocking it; others believe it is being clandestinely released into the atmosphere. As a result, there is no actual reduction of greenhouse gases though the total number of carbon credits issued is huge.

The last sentence would and should give shivers to any right thinking person. However, with the Country governance is doldrums due to the impact of one scam to another, the latest being coal; the knee-jerk reaction the government took this week in boosting the economy would not only impact the rudimentary Sustainable practices, it can erode it completely, with some  corporates muscling in their agenda of “growth” at the cost to the ecosystem.

carbon-Credit-Card

carbon-Credit-Card (Photo credit: charlesfettinger)

Today the greatest unrest is because of Energy requirement, which comes from fossil fuel and with Coal hitting the scam list, it would be difficult for the government to allow mining ( unless strong-arm tactic are used) and feed the critical requirement of the industries. Thus importing coal would gather steam. Which in no way helps in abating GHG, just reduces pollution at ones own door. The second being LPG, now it is well documented that Oil corporations are bleeding due to subsidy, but to stem the flow what is required is imagination not short-term solution.

Further, the increase in LPG price and the cap in its domestic use, would spawn another scam /corruption which now is a default setting among us.

And to stay in governance the Government would be very tempted to turn a blind eye on the misdeeds. So what must be done to balance “growth” and come out of the log-jam which is called “policy paralysis”?

As always, each problem has sustainable solutions; we only need to find them and in this article through the use of CDM.

In a recent debate, to the current situation at TIMES NOW TV, one of the guest in the Panel quoted – ” Darkness is not opposite of Light but the absence of light”.  Resonating the sentiment I would say that the failure of the CDM policy is not the failure of the idea, for the idea in itself is the original “Green Business Idea”  under which heading I have written many a blog and today I rest my arguments with the link to a series of those which directly point to a solution. What is required is to make the system a little more fool-proof. And to this extent the media, with its depth of reach should partner those who walk the path towards sustainability.

It is well documented, that traditionally in India the debt of the Father is paid by the Son. Horrific tales of the Bonded Labour are known to many. But if it’s a sad tale, it also has an opposite side. The side which investors in CDM and the Banks need to see; the honesty of the grass-root citizens of India. Unlike corporate frauds, they pay their debts. At times with their lives.

The Indian as opposed to the pseudo (westernised) Indian, always has paid respect to Nature and if one takes any religious festival of India, Nature is given due importance. In my earlier article Disconnect from ones culture is the root cause of Global Warming & Disconnect from ones culture is the root cause of Global Warming;Part-II Killing Trees; I have tried to document this aspect within the limited knowledge I could gather.

Further, I believe that the concepts which I have attempted to project through many of the articles termed Green Business Ideas, and especially – Renewable Energy – Empowering Women & Saving Forests; Green Building Ideas:Using Solar panels as roofing sheet instead of asbestos. All have the potential to earn CDM benefits. We can call them CER or REC; the money can be international or national but it must be available at the grass-root level. And at the level where innovations make a difference.

Greenhouse gas intensity in 2000 including lan...

Greenhouse gas intensity in 2000 including land-use change. (Photo credit: Wikipedia)

While we still need to rip the bowels of our Mother Earth, to feed our insatiable needs, we can actually limit them by creative thought; Green Business Ideas: Solar Panels can save water in the fields for farmers.This very act alone would save thousands of petro-dollars and improve the fiscal  deficit. While at the same time creating millions of jobs in the service and allied industries of the Solar market. While the above thoughts look at the Indian grass-roots, the middle class too can benefit and its mental outlook can be changed with Green Business Innovation : Offices can now print on a E-paper and save forest.;Green Business Ideas: Carbon Credits opportunities in Green Townships.But these too, need the support form the UNFCCC and the Banks which traditionally look at large caps and easy return; which lead to the fraud in the first place.

While the present Mumbai city many not have enough roof-space to generate its own electricity, by making laws for future re-developments and up-coming townships (Green Business Ideas: the missing LEED/GRIHA credits can help boost economy worldwide.) a great amount of job creation and by that default wealth can be generated. The crisis of energy can be tackled and that should be the goal.

Within a span of 10 years, should Sustainable building methods become norm, the government can further cut its fiscal deficit by increasing the energy tariff to what it should be, while encouraging CDM benefits for the common person. The concept is addressed somewhat in Green Business Ideas – Applying Solar OPEX model on Green Buildings will make Grid parity easy.

 The government in its first avatar of UPA-I started well in the path towards sustainability; but partisan politics and myopic views of both the political and corporate masters have not helped in boosting the concept which it came out with (Green Business Ideas : India should promote NSM & NMSH to make NMEEE a success)What it must do is lend its ear to the citizens, who always care for good governance and will stand as a solid wall of support if the benefits from CDM flows directly towards them, instead of becoming another profit-making tool for the unscrupulous corporate entities.

 

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