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Th He in Ndi Ian N C CDM M TThhee IInnddiiaann CCDDMM SSuubbssiiddiizziinngg aanndd LLeeggiittiimmiizziinngg CCoorrppoorraattee PPoolllluuttiioonn AN OVERVIEW OF CDM IN INDIA WITH CASE STUDIES FROM VARIOUS SECTORS NFFPFW (National Forum of Forest People and Forest Workers) with NESPON and DISHA (Society for Direct Initiative for Social and Health Action) The Indian CDM Subsidizing and Legitimizing Corporate Pollution An Overview of CDM in India with Case Studies from various sectors NFFPFW (National Forum of Forest People and Forest Workers) with NESPON and DISHA (Society for Direct Initiative for Social and Health Action) The Indian Clean Development Mechanism: Subsidizing and Legitimizing Corporate Pollution An Overview of CDM in India with Case Studies from various sectors NFFPFW (National Forum of Forest People and Forest Workers) NESPON DISHA (Society for Direct Initiative for Social and Health Action) November 2011 Compiled and Edited by Soumitra Ghosh and Subrat Kumar Sahu Published by Sasanka Dev, DISHA 20/4 Sil Lane, Kolkata 700015 West Bengal, India 91-33-23283989 www.dishaearth.org CONTENTS Acknowledgement Executive Summary 1- 2 Part 1 Clean Development Mechanism in India: A Country Overview 1 - 34 Soumitra Ghosh and Hadida Yasmin Part 2 Case Studies from Various Sectors Case 1: Industrial CDM 1 - 23 A. Orissa 1 Mamata Das and Subrat Kr. Sahu B. Andhra Pradesh 6 Nishant Mate C. Chattisgarh 9 Debjit Nandi D. West Bengal 11 Nabo Dutta with Soumitra Ghosh E. Karnataka 18 Nishant Mate with Soumitra Ghosh and Hadida Yasmin Case 2: Coal fired CDM Projects 1 - 16 A. Madhya Pradesh 2 Devjit Nandi and Vijendra Pardhi, with Soumitra Ghosh and Hadida Yasmin B. Chattisgarh 8 Devjit Nandi C. Maharshtra 9 Nishant Mate with Soumitra Ghosh and Hadida Yasmin Case 3: Waste-to-Energy CDM Projects 1 - 5 Delhi 1 Mamata Das and Subrat Kumer Sahu with Sasanka Dev Case 4: Wind Energy CDM Projects 1 - 11 Maharashtra 1 Nishant Mate with Soumitra Ghosh and Hadida Yasmin Case 5: Biomass CDM Projects 1 - 15 Andhra Pradesh 1 Nishant Mate with Subrat Kr Sahu and Hadida Yasmin Case 6: Hydroelectric CDM Projects 1 - 8 A. Himachal Pradesh 1 Mamata Das and Soumitra Ghosh with Hadida Yasmin B. Andhra Pradesh 6 Nishant Mate with Subrat Kr Sahu Annexe 1: Fiction for CDM Credits ; Hydro Projects in India A paper by Himanshu Thakkar Case 7: Forestry CDM Projects 1 - 37 Andhra Pradesh 2 Nishant Mate and Soumitra Ghosh with Subrat Kr Sahu and Hadida Yasmin Annexe 1: Imaginary Sinks: India’s Forest Carbon Ambitions 12 A paper by Soumitra Ghosh, Arindam Das and Hadida Yasmin Annexe 2: REDD+ in India, and India’s first REDD+ project: 20 a critical examination A paper by Soumitra Ghosh This Report would not have been possible without the collective efforts of the members of NFFPFW (National Forum of Forest People and Forest Workers), NESPON (North Eastern Society for Preservation of Nature and Wild Life) and Disha (Society for Direct Initiative for Social and Health Action). Himanshu Thakkar, of SANDRP, Delhi, contributed a brief but illuminating note on CDM hydro Projects in India (annexed with this report).Though he wrote the note in 2006 when we first thought about this report, it is still extremely relevant. Nagarik Mancha, Kolkata provided valuable information on CDM projects in West Bengal, especially the sponge iron units. All members of Durban Coalition for Climate Justice, and especially Jutta Kill of Fern, UK ; Larry Lohmann of The Corner House, UK and Tamera Gilbertson of the Carbon Trade Watch provided constant guidance and encouragement in many ways. Siemenpuu Foundation, Finland provided much needed support for the field research for many of the CDM projects covered in this study. Guman Singh of Himalaya Niti Aviyan, Himachal Pradesh and Manshi Ashar provided valuable information and logistic support during our field research in Himachal Pradesh. Benny Kuruvilla of Focus for the Global South, India and Richard K Mahapatra of Down to Earth helped in many ways in preparing this Report. Local people, affected by the CDM projects in many areas in India and fighting to protect their livelihood, health, culture and habitat, have provided enormous valuable information to prepare this report. Thanks to all the friends and colleagues. Indian CDM: subsidizing and legitimizing Corporate pollution An Overview of CDM in India with Case Studies from various sectors EXECUTIVE SUMMARY Ever since the unique mitigation strategy of carbon trading was conceptualized in the Kyoto Protocol, India seems to have been one of the busiest countries to put the concept into action. By the end of June, 2011, India had 645 CDM projects registered with the UNFCCC, 261 of which had already been issued 93834 kCERs. At that point of time, India accounted for 1603 th CDM projects (it has since gone up to 1914, as of 8 November 20111), including the registered and CER-issued ones, with 922 at validation, and another 36 at various stages of registration. Taken together, the projects claim to reduce a whooping 444293 million tonnes of CO2 equivalent by 2012(meaning that the same amount of tradable CERs will be credited to the projects, if UNFCCC registers them all). The corresponding figures for 2020 are 1516432 ktCO2 meaning that, taken together, the projects will reduce about 1520 million tonnes of Green House Gases. With such eloquent figures on the board, one likes to know a little about the reality of this emission-reduction. Even the most cursory of looks at the Indian CDM scenario sees not much other than good and solid corporate profiteering. The global economic recession and the resultant lull in the carbon market worldwide could not diminish the Indian market's slow-to-take-off but unbridled enthusiasm for Carbon Credits. Looking at India’s CDM scenario in terms of corporate participation, we find that the energy efficiency sector, including HFC, is generating the maximum CERs. Big corporations such as Tata, ITC, Reliance, Ambuja, Birla, Bajaj, GFL, HFL, NFIL, and many others, who ritually emit millions of tonnes of carbon dioxide into the biosphere earn handsome returns in the name of ’clean development mechanism’. The current market price of a ton of CO2 reduced and sold in form of CERs in the global market is anywhere between 6 and 10 Euros, even in this 'bearish' situation, whereas the most optimists of carbon consultants would not have given more than 5 dollars in 2005! The corporate hegemony over Indian CDM seems to be no less than absolute. Profits not only from large industries hosting energy-efficiency projects, but also relatively low-key and 'sustainable' renewable-energy projects in the biomass and wind sectors went to the corporate sector up to 16th May 2011, corporations collared about 90 percent of the country total of 1 8108 kCERs issued to biomass projects, and they also own most of the CDM wind projects in India. Some of the profit figures for companies engaged in the carbon trade are astounding. Till early 2008, the Jindal group made 11-billion rupees (and perhaps more) from selling supposedly ‘reduced emissions’ (1.3-million CERs) at their steel plant in Karnataka. The Tata Motors sold 163,784 CERs from clean wind projects at 15.7 euros/CER in 2007. Tatas’ sponge iron projects in Orissa are set to yield 31,762 CERs every year. Reliance publicly boasts of its CDM Kitty—with seven registered projects with an annual CER-potential of 88,448 (till 2007 December),four more CDM projects under validation with an annual total of 149,533 CERs, and seven more potential CDM projects to generate about 4 lakh CERs per year. In 2007/08 alone, the GFCL group’s earning from carbon money was thrice its total corporate profits(after tax). The disturbing fact is that the PDDs(project-design documents, which the top consultants like Price-Waterhouse Coopers and Ernst &Young prepare on a turnkey basis for the project- holders, against a fat fee) these companies submit to the UNFCCC are full of half-truths and lies. Most of the CDM projects from which ground-level community reactions are available are found to be as polluting as any other industrial project, besides exhibiting barefaced violations over the mandatory social commitments. The main problem with these projects’ claims of reducing GHG Emissions is that there is no credible way to verify these claims. Dirty and utterly ineligible projects routinely sail through, without bothering to clean up their acts. Though the projects are ‘validated’ by overseas ‘agencies’ like DNV, who certify that the projects validated by them are ‘in effect’ reducing emissions, there is no monitoring of the validating agencies themselves, many of whom have been accused of half-done and highly manipulative jobs. For instance, the CDM Executive Board suspended DNV in 2008 November, saying that their audit process was questionable. Though there is a proviso in the CDM mechanism that the projects must result in all-round sustainable development and benefit communities where those are located, the CDM projects in India barefacedly violate the sustainability criteria. Because the Indian government doesn’t have any regulatory mechanism to enforce compliance, this practice goes on unchecked. 2 PART 1 CDM in India : An Overview CDM in India: A Country Overview Clean Development Mechanism in India: A Country Overview Introduction Rapid increase in atmospheric concentration of CO2 and other greenhouse gases (CH4, N2O, NO*) since about 1850 has raised numerous questions of global significance. For over 200 years, industries of the world have been transferring fossil carbon from underground deposits of coal, gas and oil to a more potent and rapidly active circulating carbon dump in the entire biosphere including the air, oceans, soil and the vegetation2 Approximately 6.0 Pg (6x108 tones) of carbon per year are released into the atmosphere due to fossil fuel combustion, cement manufacturing and deforestation3.
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