Small-scale Clean Development Mechanism Research Articles

Techno-economic and environmental assessment of methane oxidation layer measures through small-scale clean development mechanism – The case of the Seychelles

Unclosed coastal landfills in small island developing states are major sources of greenhouse gases and other environmental impacts. This is a major problem for sustainable waste management systems mainly due to the lack of economic resources. The clean development mechanism (CDM) appears as a possibility to facilitate sustainable financing. Implementing a methane oxidation layer (MOL) emerges as a feasible technical option for this kind of small landfills since landfill gas extraction is usually not viable. This paper presents a techno-economic and environmental assessment of MOL implementation in the Providence landfill (Seychelles) as a small-scale CDM measure. Results show that the MOL measure could avoid by 2030 between 94 and 20 kt CO2 eq. Concerning profitability, results clearly show that it depends on the existence of stabilized biomass material within the island. Thus, the MOL measure starts to be profitable in some scenarios for certified emission reductions (CER) prices higher than 26 €/t CO2 eq. that seem possible depending on the emissions’ market development. When not profitable under CDM, the MOL measure might be used to reduce CO2 emissions from the domestic climate effort under the Paris Agreement since the unitary abatement costs is between 10 and 423 €/t CO2 eq. Moreover, the MOL measure contributes to the sustainable development goals (SDG) achievement – mainly SDG8, SDG13, and SDG14. Finally, results call for a prompt action in Seychelles since the sooner the MOL is implemented after the landfill is closed, the more profitable.

A bioeconomic analysis of the carbon sequestration potential of agroforestry systems: A case study of Grevillea robusta in South Western Uganda

Grevillea robusta is an agroforestry tree species that has been widely promoted under the carbon forestry schemes in South Western Uganda. The objective of the study was to estimate the amount of carbon sequestered and the profitability of carbon offsets in G. robusta woodlot and agroforestry management options under the Plan Vivo system and small-scale Clean Development Mechanism (CDM). An allometric equation for G. robusta was used to calculate the carbon stocks and merchantable wood volume in the woodlot and agroforestry management options over different crediting periods. The results indicated that G. robusta woodlots and agroforestry management options sequestered 470 and 225 t CO2e ha-1 respectively, over a 20 year rotation. The net present values (NPVs) of the G. robusta agroforestry management option of US$4367 and 4447 ha-1 under the Plan Vivo and small-scale CDM, respectively, were higher than US$1358 and 1902 ha-1 in the G. robusta woodlot management option. The NPV of the traditional agroforestry system was US$ 3992 ha-1. These results show that, whereas the woodlot option stores more carbon, it is the least profitable option. Analysis also revealed that, although poor households were well represented in the Plan Vivo scheme, they preferred the agroforestry option. This suggests that forest carbon offsets on productive agricultural land, should focus on promoting agroforestry technologies in order to increase profitability and targeting of the poor households. Key words: Allometric equation, carbon offsets, profitability

The economics of the carbon sequestration potential of plantation forestry in south-western Uganda

This study assessed the amount of carbon stored and the economic viability of the small-scale Clean Development Mechanism (CDM) carbon offsets in Pinus caribaea and Eucalyptus grandis plantations under varying rotations. Volume equations were used to estimate carbon stocks and merchantable wood volume in the plantations, while net present value (NPV) and annual equivalent value (AEV) were used as measures of profitability at the optimum economic rotation age as well as at the CDM-defined crediting period of 20 years. The findings show that over a 20-year rotation, E. grandis and P. caribaea plantations sequestered 638 and 418 t CO2-e ha−1, respectively. The NPVs of E. grandis and P. caribaea with carbon credits over the CDM carbon-crediting period of 20 years were US$2 540 ha−1 and US$1 814 ha−1, respectively. This is higher than the NPVs without carbon credits of US$1 543 ha−1 and US$1 390 ha−1 for E. grandis and P. caribaea, respectively. The AEV of E. grandis harvested at its optimal economic rotation of 10 years was US$316 ha−1. This is slightly higher than the AEV of US$298 ha−1, utilising the CDM carbon-crediting period of 20 years. In contrast, the AEV of P. caribaea under the 20-year CDM carbon-crediting period was higher than harvesting at the optimal economic rotation of 16 years without carbon credits. When the average CDM contract establishment costs exceed US$500 ha−1 and US$1 000 ha−1 for P. caribaea and E. grandis woodlots, respectively, it is not economically viable for one to participate in the CDM forest carbon offsets programme. In conclusion, the study results indicate that whereas E. grandis has a higher biological potential to sequester carbon than P. caribaea, it is currently not economically viable for participation in the CDM forest carbon offset scheme. In contrast, it is economically viable for P. caribaea plantations to participate in the CDM, if the CDM contract establishment costs are low.

Review of Clean Development Mechanism and use of Bundled Projects in Small and Medium Scale Enterprises

Carbon finance through the Clean Development Mechanism (CDM) offers significant opportunity to a developing country like India for an array of greenhouse gas (GHG) emission reduction projects. However, the transaction cost associated with the development of CDM project is a serious barrier to many small scale CDM (SSC) projects due to which these proponents face many difficulties in attracting international investors. To reduce this transaction cost, individual small projects with similar project context can be bundled together to form a single CDM project. These SSC bundled projects that reduce GHG emissions can claim Certified Emission Reductions (CERs) under the concept of bundling. This paper presents 98 bundled CDM projects registered and issued worldwide till October 2014, out of which India has 29 projects, along with a case study on small scale hydro-electric power generation project. The visited project is a good example of clean technology that helps to reduce stress on conventional energy sources and is an improvement of social and economic life of local people. Energy efficiency, grid connected electricity generation, fossil fuels switching, thermal energy production and methane recovery are some of the methodologies in these types of projects. These methodologies reduce GHG emissions without harming the environment.

Optimal sampling plan for clean development mechanism energy efficiency lighting projects

Clean development mechanism (CDM) project developers are always interested in achieving required measurement accuracies with the least metering cost. In this paper, a metering cost minimisation model is proposed for the sampling plan of a specific CDM energy efficiency lighting project. The problem arises from the particular CDM sampling requirement of 90% confidence and 10% precision for the small-scale CDM energy efficiency projects, which is known as the 90/10 criterion. The 90/10 criterion can be met through solving the metering cost minimisation problem. All the lights in the project are classified into different groups according to uncertainties of the lighting energy consumption, which are characterised by their statistical coefficient of variance (CV). Samples from each group are randomly selected to install power meters. These meters include less expensive ones with less functionality and more expensive ones with greater functionality. The metering cost minimisation model will minimise the total metering cost through the determination of the optimal sample size at each group. The 90/10 criterion is formulated as constraints to the metering cost objective. The optimal solution to the minimisation problem will therefore minimise the metering cost whilst meeting the 90/10 criterion, and this is verified by a case study. Relationships between the optimal metering cost and the population sizes of the groups, CV values and the meter equipment cost are further explored in three simulations. The metering cost minimisation model proposed for lighting systems is applicable to other CDM projects as well.

Can the Clean Development Mechanism (CDM) deliver?

The paper investigates whether the Clean Development Mechanism (CDM) under the Kyoto Protocol has played a significant role in the development of rural communities, specifically investigating uptake of small-scale renewable energy projects. The investigation involved an assessment of 500 registered small-scale CDM projects under the Kyoto Protocol in terms of their potential impact on the envisaged sustainable development goals for rural communities. Five case studies from the Indian subcontinent were also examined.The paper concludes that the CDM in its current state and design has typically failed to deliver the promised benefits with regard to development objectives in rural areas. Successful projects were found to have had good community involvement and such projects were typically managed by cooperative ventures rather than money making corporations. The paper puts forward a new framework for the assessment of such benefits in the hope that future projects can be better assessed in this regard. The key problem, however, remains on how to deal with the inherent contradiction between development and sustainability.

Approximation of baselines and greenhouse gas reduction scenarios for a small-scale Clean Development Mechanism on agriculture and livestock in ASEAN

The baselines for greenhouse gas (GHG) and greenhouse gas reduction scenarios were approximated in Thailand so that a small-scale Clean Development Mechanism (CDM) could be introduced into other Association of Southeast Asian Nations (ASEAN) countries. In developing countries, a CDM is defined as the certified emission reduction from a baseline of any project (i.e. by applying new technologies) that could be exchanged for credits, and this credit of certified emission reductions could be acquired by Japan and ASEAN countries. Small-scale CDMs are project activities that reduce anthropogenic emissions and directly emit less than 15 kt of carbon dioxide-equivalents annually. For the success of CDM projects, baseline methodologies are allowed to apply to the United Nations CDM Executive Board. Baseline methodologies use a baseline scenario, which compares the baseline without any project to a case with an emission reduction project. After commencement of a project, reduction of GHG emissions from the baseline by the emission’s reduction project could be exchanged for credit. Therefore, GHG emission from the broiler industry in Thailand was calculated by the Tier 1 method and defaults data in accordance with 2006 IPCC guidelines. The baseline for the waste management system in the broiler industry is defined as drying without energy. Three types of projects on waste management systems the broiler industry were compared: (i) incineration, (ii) drying without energy input and (iii) drying with energy input. Products of these systems are finally used as compost on agricultural fields. The baseline for the manure drying without energy input system was approximated. This baseline was compared with the manure incineration system and the drying with energy input system. GHG emissions produced by adoption of drying broiler manure with energy input could be reduced by ~57% by drying broiler manure without energy input. This reduction in GHG (57%) could be credited to a small-scale CDM when operational. In the future, measurement of GHG on broiler production farms in Thailand should be considered, because estimation with the Tier 1 method, as performed in this study, may not be rigorous enough to be accepted by the CDM Executive Board. After compiling GHG inventories, baseline emissions would be known for the broiler industry in Thailand and other countries in ASEAN. These could then be used to advance CDM.

Small-scale CDM projects in a competitive electricity industry: How good is a simplified baseline methodology?

Setting baseline emissions is one of the principal tasks involved in awarding credits for greenhouse gas emission (GHG) mitigation projects under the Clean Development Mechanism (CDM). An emission baseline has to be project-specific in order to be accurate. However, project-specific baseline calculations are subject to high transaction costs, which disadvantage small-scale projects. For this reason, the CDM-Executive Board (CDM-EB) has approved simplified baseline methodologies for selected small-scale CDM project categories. While the simplified methods help reduce the transaction cost, they may also result in inaccuracies in the estimation of emission reductions from CDM projects. The purpose of this paper is to present a rigorous economic scheduling method for calculating the GHG emission reduction in a hypothetical competitive electricity industry due to the operation of a renewable energy-based power plant under CDM and compare the GHG emission reduction derived from the rigorous method with that obtained from the use of a simplified (i.e., standardized) method approved by the CDM-EB. A key finding of the paper is that depending upon the level of power demand, prices of electricity and input fuels, the simplified method can lead to either significant overestimation or substantial underestimation of emission reduction due to the operation of renewable energy-based power projects in a competitive electricity industry.

Energy efficiency and the CDM in South Africa: constraints and opportunities

Energy-efficiency projects were expected to consti-tute an important project type under the Clean Development Mechanism (CDM). In South Africa, there is significant potential for energy savings in several sectors. The savings possible in industry have been demonstrated through plant-level energy audits, measurement and verification of Eskom’s Demand Side Management (DSM) programme and national energy modelling. Enabling policy for energy efficiency and demand-side management has been adopted by government and the utility, Eskom. A dedicated National Energy Efficiency Agency (NEEA) was established in 2006. Yet, energy-efficiency still fails to realise its potential. The paper seeks to dispel the misconception that energy efficiency projects might not be ‘additional’ under the CDM. Analysis of barriers, which is well understood by those dealing with energy efficiency, can be used to demonstrate additionality. A stan-dard tool for demonstrating additionality is now available, as are baseline methodologies for both large and small-scale CDM projects. It should, therefore, be clear that energy efficiency projects are not a priori ruled out as non-additional. Each proj-ect has to demonstrate additionality, as for any other project type. Finances are available from various sources, and the CDM can offer further funding for initial costs, or in removing the barriers to energy-efficiency projects. Internationally, energy efficiency initially did not account for large numbers of CDM projects, nor a major share of carbon credits. With the recent growth in CDM projects, however, the numbers of energy-efficiency projects are increasing internation-ally. In South Africa, analysis of the emerging CDM portfolio shows that energy-efficiency projects are much better represented at the concept stage than in fully designed CDM projects.The major elements for implementing energy-efficiency projects exist – dedicated institutions, enabling policy frameworks, approved methodolo-gies and even an electricity crisis to raise awareness. Funding is available from various sources, and the CDM can offer further funding for initial costs or in removing the barriers to energy-efficiency projects. The CDM rules should soon allow for registration of entire programmes, which could include energy-efficiency standards or demand-side management. Innovative financing solutions such as clean energy lending can assist as well. All that seems to be needed is a concerted effort to realise the potential. Such efforts could be driven by the Designated National Authority or the National Energy Efficiency Agency. Together with initiatives from the private sector, a dedicated effort might help South Africa find a clear route for ener-gy-efficiency projects under the CDM in South Africa.

CDM wind-energy projects: exploring small capacity thresholds and low performances

This article analyses existing small-scale wind farms located in India as hypothetical projects implemented under the Clean Development Mechanism (CDM). It addresses them from three different viewpoints (sustainable development, financial feasibility and institutional conditions), focusing mostly on identifying the smallest capacities and lowest performances at which these cases may become attractive for CDM investors. Although the case studies exhibit the potential to achieve the dual objective of the CDM; based on our estimates of related transaction costs we find that small-scale CDM wind farms that generate a minimum of 3,500–5,000 certified emission reductions (CERs) per year may start to attract the attention of CDM investors, as long as a minimum of just US$5 per CER is obtained and supportive strategies such as project bundling and unilateral implementation model are in place. Lessons from the Indian wind-energy experience indicate that non-Annex I countries interested in attracting the attention of CDM investors for wind-energy projects should undertake domestic efforts to build institutional and human competences capable of supporting both their domestic windenergy markets and the development of CDM wind-energy projects in general. Some policy recommendations are drawn.