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Clean Development Mechanism (CDM)  

 

 Designated National Authority (DNA) Structure

  

In order to participate in the Kyoto Protocol CDM process for generating Certified Emission Reduction (CER) the government has set up a two tier Designated National Authority (DNA) through a government Notification on 13-10-2003. The lower tier, located at the Ministry of Environment and Forest (MoEF), is the secretariat or operational body of the DNA. It is performing all CDM related activities including giving preliminary approval of CDM projects through the CDM Committee. The upper tier, known as the CDM Board, gives the final endorsement of the approved projects. The Principal Secretary to the Prime Minister is heading the CDM Board. Since the Principal Secretary has jurisdiction over all secretaries of different ministries of the government, it is expected inter-ministerial coordination will be easily achieved.

The main task of the DNA is to approve CDM projects, which can eventually be registered by the CDM Executive Board of the UNFCCC. As per the Modalities and Procedures of CDM, approval by the DNA is mandatory before project validation by any Designated Operational Entity (DoE) and subsequent registration by the Executive Board of the CDM.

 

Apart from establishment of DNA, the government has also established national procedures for evaluation and approval of CDM projects, developed sustainable development criteria for the evaluation of CDM projects and finalized the CDM strategy.

 

 

Project Approval Process:

  • CDM Secretariat with the assistance of Panel of Experts and in consultation with the relevant line ministry will evaluate the PCN and shall inform the project proponent (within fifteen days) to prepare the draft PDD as per the prescribed format of the CDM Executive Board or inform the party to revise the PCN as per the recommendation of CDM Clearing House/ Secretariat.

  • During the evaluation of PCN, CDM Clearing House/ Secretariat shall check whether the proposed project is in conformity with the policies of the relevant line ministry and meets the sustainable development criteria for CDM projects as determined by the National CDM Committee. The Secretariat however shall not have the power to reject a project. If a project proponent is not satisfied by the decisions of the Secretariat, the PCN shall be forwarded to the Committee for evaluation

  • Once the draft PDD is submitted to the CDM Clearing House/ Secretariat, it shall be evaluated in the same manner as the PCN and a briefing note prepared. For approval, the Secretariat shall prepare all necessary documents and send the project file to the National CDM Committee. Special attention will be given to stakeholders meeting and EIA reports.

  • The Secretariat shall ensure that the entire process between receiving the draft PDD and CDM Committee review does not take more than 30 days.

  • Once the PDD is approved by the Committee and endorsed by the Board, the project proponent has to pay to the CDM Secretariat/ Clearing House the necessary fee as fixed by the Board.

 

 

Proposed CDM Project Approval Process :


Simplified Methodology for Evaluating Sustainable Development Criteria of CDM Projects :

 

In evaluating the Sustainable Development content of projects, it is important to remain focused and not get lost in the maze of the evaluation criteria. The methodology to be applied to evaluate the SD content of CDM projects is depicted in Figure 1. It is suggested that if a project meets with Government plans and policies, it should be treated as a special category and a simple approval process employed. Projects developed by government agencies or under Government sponsorship shall automatically be considered in this category. ALL CDM PROJECTS must pass through the first two screening process of the decision tree of Figure 1. The evaluation process for projects submitted to the DNA should follow the logical sequence shown in Figure 1. The logical steps in the decision tree of Figure 1 are explained below.

  1. The first screening of projects is intended to ascertain the environmental integrity of the project. The DNA with full assistance from the Department of Environment (DoE) shall evaluate the project by asking the following two questions – (i) Does it add to the existing stress on major environmental problems in the country? (ii) Does it violate any environmental rules and regulations of the country? The PROJECT SHALL BE REJECTED if the answer to either one of the questions is YES. To accomplish the first task a list of serious environmental problems of the country will need to be compiled.

  2. If the project survives Step 1, the second screening would be to see if the project violates any development plans of the country. For this a list may be prepared, but more importantly, the relevant line ministry/agency of the Government must accept the project. This step ensures that projects, which violate Government polices and development plans, do not get approval even if those are excellent in reducing GHG emissions

  3. If the project survives Step 2, then it can at least be stated that the given project is environmentally benign and does not violate the host country’s broad development objectives. However, it says nothing about how good the project is in terms of SD. This step is intended to tackle that. It is suggested that if the project addresses STRONGLY any one environmental or economic/social goals of the country, the project can be accepted. It must be reiterated that the impact of the project must be SIGNIFICANT. All Government and Government sponsored projects shall be deemed to have STRONG country focus, and therefore, shall be approved. Being government projects, it is expected that these have been formulated and developed with extensive consultation with the DNA. It must however be emphasized, that even these projects must cross Step 1 and Step 2 before being accepted

  4. For private sector projects, where clear and strong SD benefits cannot be identified, an appropriate set of SD criteria shall be used to evaluate projects that have not qualified in Step 3

Projects that cannot be accepted using the simplified screening procedure as detailed above must be evaluated using a procedure, which is able to consider both the negative and positive impacts. This can only be achieved in a reliable, clear and transparent manner by using good sustainable development criteria. It is proposed that SD criteria having the following three pillars be employed to evaluate projects.

  1. Economic

  2. Social

  3. Environmental and Technological

Under each pillar, there exist several indicators. The criteria use pair-wise comparison to first establish the relative importance between the three pillars. After that, a second pair-wise comparison between the indicators under each pillar is performed to establish the relative importance between the indicators. In the third step, the impacts of all the indicators are graded in a scale of –2 to +2. And finally, a composite score for the projects is computed from the data in step 2 and 3.

(decision tree for Evaluating CDM Projects)

  

  

CDM Strategy:

 

  In order to attract CDM projects in Bangladesh it is advantageous to have a strategy for CDM. The goal of the CDM strategy is to promote and attract climate friendly investment in Bangladesh. The objectives of the strategy are:
  • To enhance awareness of stakeholders regarding CDM
  • To identify economic opportunities in sectors that will be beneficial to the country for CDM projects
  • To identify and implement achievable and practical actions that can be undertaken immediately, as well as longer-term actions which will result in future easy identification, design and implementation of CDM projects.

Principles of the Strategy

The strategy reflect following principles:
  • Participation in CDM projects shall be in line with existing sectoral policies.
  • CDM projects shall have tangible national impacts and will contribute to the national sustainable development agenda.
  • 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 be encouraged to include elements that would contribute to poverty reduction and promote employment generation.
  • CDM Projects shall promote and encourage the transfer of new, proven, affordable and relevant technologies.
  • CDM Projects that address National Environmental issues 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.

Tax incentive for green projects.

  

On Going Projects in Bangladesh:

   

I. Landfill Gas and Composting Project ( Financed by WWR, Netherlands)

 

Waste Concern has already prepared a CDM project on “Landfill Gas Recovery in Dhaka” under the recently completed project entitled “ Capacity Development for Clean Development Mechanism in Bangladesh” under the MoEF's SEMP project with support from UNDP.

 Apart from Landfill Gas Recovery Project in Dhaka, Waste Concern has prepared two composting projects based in Dhaka and Chittagong as well as a landfill gas recovery project in Chittagong. Moreover, Waste Concern is also preparing a baseline for poultry waste In Bangladesh. A snapshot view of these four projects is presentedinTable1.

On August 8, 2004, the National CDM Board of Bangladesh has recently approved the Landfill Gas Recovery and
Composting Project in Dhaka. World Wide Recycling (WWR) of the Netherlands is investing in the aforementioned CDM
projects in Dhaka, Bangladesh.

 

II. SSN Project (Supported by the Netherlands Government)

 

The SouthSouthNorth (SSN) Network, which is composed of environmental NGOs from four countries South Africa, Brazil, Indonesia and Bangladesh, is developing CDM projects through the assistance of the Netherlands Government. SSN's participating institution in Bangladesh is Bangladesh Center for Advanced Studies (BCAS). The following two CDM projects are under development.

  • SHS with Grameen Shakti

  • CFLs to replace incandescent light bulbs with Grameen Shakti and EnergyPac

The first project aims to sell 30,000 SHSs in non-grid areas of rural Bangladesh. It is estimated that approximately 10,000 tons of carbon dioxide (CER) would be reduced per year bringing in a financial benefit of about $ 80,000 per year. The second project is designed to sell 100,000 Compact Fluorescent Lamps (CFL) in rural areas. The project is expected to reduce at least 5,000 tons of carbon dioxide and bring in $40,000 per year. Both these projects have received the go-ahead from the DNA for PDD submission.

 

III. Electricity Demand Side Management Project (Supported by Canadian CIDA)

 

Engconsult Ltd., Canada and Prokaushal Upodeshta Ltd., Bangladesh have jointly undertaken a study in February-March 2003 to explore and perform practical experimentation on the effectiveness of the use of ElectroFlow system in Bangladesh conditions. The study team researched the technical and financial feasibility of ElectroFlow - an Energy and Environmental Conservation system at Youngone Dying and Spinning Industry in Dhaka Export Processing Zone (DEPZ), Savar, Bangladesh.

 

ElectroFlow system developed by Electenergy Technologies Inc. of USA, helps industries and governments to optimize the use of electrical energy which results in up to 34% energy saving. ElectroFlow is a microprocessor based control system, operating on ladder logic principle, will ensure continuous monitoring of system's reactive power/power factor (X/R), and threshold current. An automatic system, equipped with variable high and low adjustments, whose control employs data inputs other than that of the system's reactive current component will perform during its corrective process in a damped or tuned RLC network response to an indicative or relative manner.

An energy baseline has been calculated using past 12 months energy consumption data. The potential on-site emission reductions associated with the installation of ElectroFlow system are calculated using emission coefficients for natural gas. Based on a preliminary assessment on the observed data in Youngone by the system manufacturer, it is proposed that ElectroFlow system has the potential to conserve 10% energy use in the industry. And the simple payback period for this industry is calculated to be 34 months. The final emission reduction will be calculated using the energy conservation data after the system installation.

 

IV. Industrial CHP/Cogeneration Project (Supported by NEDO, Japan)

 

NEDO of Japan is actively pursuing Industrial Cogeneration CDM projects in Bangladesh. They have identified many prospective industries and are in the process of implementing a Cogeneration scheme in a textile industry. Other Japanese companies are interested in energy efficient CDM projects. The Cogeneration technology is described below.

 

There exist many industries, which require substantial quantities of both electricity and heat. In a traditional setup, electricity is either purchased or generated in-situ using natural gas, and the process heat is obtained by burning natural gas in a boiler. In the improved energy efficiency setup a technique known as cogeneration can be employed. Conventional electricity generation is able only to extract a portion of the total energy in the fuel. The exhausted heat whether in power plants or in on-site electricity generators is “wasted”, i.e., released to the atmosphere. Using what is known as a “Waste Heat Boiler”, the 'Wasted heat' from an electricity generator can be used to provide industrial process heat. Excess electricity can be sold to the grid or to the locality. The electricity generation efficiency, which is between 30-35% (Fig1), now gets transformed into total energy efficiency of more than 80% (Fig2). In effect, the heat used by the industry becomes totally free, i.e., the natural gas requirement for the boiler is eliminated

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Potential Sectors for CDM Projects in Bangladesh

 

Through the CDM mechanism GHG emissions can be reduced in three major sectors, namely:

  • Waste;

  • Forestry and

  • Energy, both supply side and demand side;

     

    • The waste sector options mainly prevent the release of methane from bio-methanation processes. The methane collected can be flared or used to generate electricity. When electricity is generated, the GHG reduction due to fossil fuel replacement can be claimed. When waste is converted to replace chemical fertilizer, GHG reduction can be claimed. The waste sector options for Bangladesh can be landfill, poultry waste, human excreta and waste water treatment.

    • The options in the forestry sector can be both aforestation and reforestation.

      •

    • The energy sector options for CDM are numerous. It is best to look at these projects within the type they belong to. The different types of CDM projects along with some suitable examples for Bangladesh are listed below.

      •

    • Switching from carbon intensive fuels to less carbon intensive fuels or renewables

    • Replacing coal by natural gas in brickfields; Replacing diesel buses by CNG buses; Solar home systems

    • Replacing an inefficient device by an efficient one Incandescent bulbs to Compact Fluorescent lamps; Efficient air-conditioners; Efficient grinders in cement industries; Improved cookstoves

    • Increasing the efficiency of an existing device - Retrofitting boilers and motors; Vehicle maintenance; Retrofitting old ammonia-urea plants to bring those to the level of the state-of-the-art plants;

    • Modifications of a process so that it consumes less fossil fuel - Pulping using Continuous digesters in place of Batch digesters; Replacing the wet process of cement manufacture by the dry process in the Chattak Cement Factory

    • Cogeneration Waste heat utilization either from electricity generating turbines or high temperature processes - The first option is also known as Cogeneration which can be employed in Sugar Mills; Textile Mills; Jute Mills; Tea Manufacturing etc. The second option can be employed in Ceramic Industries.

    • Greenfield projects (i.e. using an entirely different process in a new project to accomplish the same outputs as the baseline)

    •  Vertical Shaft Brick Kiln (VSBK) for brick making ; Hoffman Kiln, which uses natural gas, is a greenfield project with fuel switching.

      •

    • Lowering energy consumption through building design and materials Solar reflective glass windows to reduce air-conditioning load, Design buildings to have windows facing south

    • Conservation Car pooling; Using mass transit systems instead of personalized transport modes; occupancy

    • From the long list of projects it would be apparent that there can be many CDM projects in the eight categories listed above. The essential idea is to reduce GHG emission with respect to a predetermined (agreed and approved) baseline emission. Since CDM is a project based mechanism the fact that Bangladesh's overall energy consumption is very low should be no barrier. It is also important to note that CDM is concerned with emission that will occur in the future, and in that respect, the prospect of CDM is bright because Bangladesh's commercial energy consumption is increasing at 6% per year.

Publications:

 

 

 Organizations involved with CDM in Bangladesh

 

 

Links

[ Courtesy : http://cdmbangladesh.net  , Please visit the link to find details ]  

Some Documents on CDM Bangladesh Perspective :

 

 CDM Global Perspective :