Clean Development Mechanism (CDM)

(First capacity building workshop on Clean Development Mechanism (CDM) under CD4CDM initiative date: 8-9 april, 2008, venue: Dhaka)

CDM Project Status in Bangladesh

Capacity Building Workshop on CDM

Mirza Shawkat Ali

Deputy Director General

Department of Environment

8 April 2008

Background

United Nations Framework Convention on Climate Change (UNFCCC) 1992

– Non binding commitments for the industrialized countries to reduce their emission to 1990 level by 2000

Kyoto Protocol 1997

– Binding Commitments for the industrialized countries to reduce their emissions 5% below 1990 level by the first commitment period (2008-2012).

Kyoto Mechanism

Joint Implementation (JI)
Emission Trading (ET)
Clean Development Mechanism (CDM)

Clean Development Mechanism (CDM)

The Kyoto Protocol allows Annex-B countries to reach their emission reduction targets in different ways through Flexibility Mechanisms.
CDM is the only flexible mechanism that involves developing countries (Non-Annex B).
It allows developed countries (Annex B) to achieve part of their reduction obligations through investment in projects in developing countries that reduce GHG emissions or fix or sequester CO2 from the atmosphere.

Green house gas reduction of any CDM project is measured according to internationally agreed methods and are quantified in standard units called Certified Emission Reductions (CERs).
CERs are expressed in tons of CO2 equivalent.

Salient Features of CDM

Industrialized (Annex B) countries’ state or private companies can invest in projects in developing (Non-Annex B) countries that contribute to reduction of GHG emission;
Developing (Non-annex B) countries’ state or private companies are allowed to implement such projects;

Through CDM projects industries in developing countries can be technologically upgraded and made environment friendly thus contributing to global climate protection as well as promoting sustainable development in the host country.
The industrialized countries’ investing entities can earn credit for emission reductions achieved through its investment in developing country towards its own emission commitment.

CDM Project Implementation Process

CDM project proposals are to be prepared following the format and guidelines as prescribed by CDM Executive Board under UNFCCC.
Projects must be endorsed by the Designated National Authority (DNA) of the host country.
It has to meet the Sustainable Development Criteria of the host country.
The project is to be validated by the Certified agency, which is accredited by the CDM Executive Board under UNFCCC.

Designated National Authority (DNA) for Bangladesh

Structure of DNA > National CDM Board > National CDM Committee

National CDM Board

Chairman of the Board

Principal Secretary to the Prime Minister

Members

• Secretary, Ministry of Environment & Forests

• Member, Planning Commission

• Secretary/Secretaries of the Relevant Ministry

Member-Secretary

DG, Department of Environment

National CDM Committee

Chairman of the Committee

Secretary, Ministry of Environment & Forests

Members

Members from Govt. Sectors

Planning Commission, Ministry of Environment and Forests, Industries, Agriculture, Foreign Affairs, Communications, Science information and Communication Technology, Power, Energy & Mineral Resources, ERD, LGED, BOI, Bangladesh Bank, Department of Environment.

Members from NGO Sectors

FBCCI, BIDS, BUET, Waste Concern, BCAS.

Member-Secretary

Director (Tech.), Department of Environment

CDM Strategy

Participation in CDM projects shall be in line with existing national and sectoral strategies and policies, including poverty reduction strategies.
CDM projects shall have tangible national impacts and will contribute to the national sustainable development agenda.
CDM projects shall take into consideration of Efficient and economic utilization of natural resources of the country.
CDM will be used to encourage private sector investments in climate-friendly development activities.
CDM projects shall be designed so as to contribute to the improvement of the environment and the welfare of the society as a whole.
CDM Projects shall promote and encourage the transfer of new, proven, affordable and relevant technologies.
CDM Projects that address national environmental issues including improvement of hygienic living condition of the people will be especially encouraged.
CDM projects having adaptation and vulnerability co-benefits shall be encouraged.
CDM projects shall be approved through a participatory and transparent process that involves detailed assessment of their economic, social and environmental benefits and their relevance to local needs and priorities.

Proposed Sustainable Development Indicators

Decision Tree for Evaluating CDM Projects

Sustainable Development Matrix

			Relative Impact		n Score [ å (V1) x (W1)] i = 1 (V1= Degree of ImpactW1 = Relative Weight)
Sustainable Development Parameters	Relative Importance	Degree of Impact	Positive	Negative
ECONOMIC (25) 1.Balance of Payment 2.Contribution to Growth 3. Cost Effectiveness
ENVIRONMENTAL (20) 1. Natural Resource Augmentation 2. Reduction of Pollutants
POVERTY REDUCTION/ SOCIAL (20) Employment opportunities 2. Improved quality of life (Health, Sanitation) 3. Take into consideration Gender issue/ Gender equity

			Relative Impact		n Score [ å (V1) x (W1)] i = 1 (V1= Degree of ImpactW1 = Relative Weight)
Sustainable Development Parameters	Relative Importance	Degree of Impact	Positive	Negative
Technology (15) 1. Technology easily adaptable 2. Technology Promotes Sustainable Use of Natural Resources 3. Social Acceptance
CAPACITY BUILDING (20) 1. Programme/Project Planning 2. Programme/Project implementation 3. Training 4. Grassroots capacity building

Note: the categorization of broader and sub-issues are generic. Extension of sub-issues will have to be accommodated within the maximum number for the broader parameter.

Potential Sectors for CDM Projects in Bangladesh

Energy

– Energy efficiency, Co-generation, Renewable energy, Efficient lamps and Fuel Substitution

Waste

– Methane Recovery from landfill, Biogas and composting of urban solid waste

Forestry

– Aforestation and Reforestation

DNA Approved projects

Serial		Name of Project	Relevant Information		Status
1		Landfill gas Extraction and Utilization at Matuail Dumpsite, Dhaka	– Expected to generate 3-5 MW Electricity from the extracted methane 990,000 tons of GHG will be reduced over the 8 yr period		Got registration from CDM Executive Board. DCC is yet to approve the project proponent access to Matuail Dump site.
2		Composting Project at Matuail Dumpsite, Dhaka	– 700 tons of kitchen market waste would be composted 487,506 tons of GHG will be reduced over 8 yr period		got registration from CDM Executive Board Undergoing infrastructure development for project implementation
3	Installation of 30,000 Solar Home Systems (SHS) in rural households			– 230,850 tons of GHG will be reduced over 21 yr period SHSs will be established at remote areas with credit facilities to the rural poor.		undergoing validation process[1]
4	Replacement of 100,000 Incandescent Bulb with Energy Efficient Compact Fluorescent Lamp (CFL) in Rural Bangladesh			– 49,790 tons of GHG will be reduced over 10 yr period under credit facilities this would also be given to rural poor		undergoing validation process

	Project Proponent	Project Activity	Total Units to be Installed	Total estimated reduction (tons of CO2)
1.	Grameen Shakti	65 Wp GS Solar Home System	187,256 units	132,716 (7 years)
2.	Grameen Shakti	60, 75, 80, 85 & 120 Wp GS Solar Home System	134,044 units	98,018 (7 years)
3.	Grameen Shakti	30 & 40 Wp GS Solar Home System	194,869 units	240,809 (7 years)
4.	Grameen Shakti	50 Wp GS Solar Home System	289,723 units	95,356 (7 years)
	Sub-total		805,892	566,899
5.	Infrastructure Development Company Limited (IDCOL)	30, 40, 50, 60, 75, 80 Wp IDCOL Solar Energy Program	226,700 units	243,976 (7 years)
	Total		10,32,592	810,875