Clean Development Mechanism

Project description

Title: Clean Development Mechanism (CDM) joint implementation initiative
Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)
Country: India
Lead executing agency: Ministry of Environment and Forests (MoEF), Government of India
Overall term: 2008 to 2012

Context

India faces the challenge of sustaining its rapid economic growth while dealing with the global threat of climate change. Although a comprehensive climate change policy, the National Action Plan on Climate Change (NAPCC) has been put in place, there is a shortage of expertise for developing CDM projects. Nevertheless, India is one of the leading destinations for CDM in the world, especially in the fields of renewable energy, biomass and energy efficiency. CDM projects related to forestry and municipal solid waste remain largely untested, despite their vast potential.

Objective

CDM projects have begun in sectors with good potential, but which have so far not seen CDM activity. Other opportunities for CDM have also been identified for small and medium-sized enterprises in particular, and programmatic approaches to CDM have been recognised and developed.

Approach

The CDM initiative supports Indian CDM projects by facilitating investment, technology transfer, the marketing of Indian certified emission reductions (CERs), and networking between the relevant stakeholders. The activities focus on implementing India's climate change policies, for example the NAPCC, and it aims to intensify bilateral cooperation between government institutions and the private sector, both nationally and internationally.

The initiative is active in various fields, such as energy-intensive SMEs, buildings, transport, waste management, renewable energy and reforestation. The interventions aim at establishing CDM support cells aligned with the institutions at state level, especially in states where so far there are comparatively few CDM activities.

With the direct support of BMU and MoEF, the initiative organises Carbon Bazaar, an international event staged annually to encourage European and especially German companies to use the flexible mechanism in India. This has been held twice so far, in 2009 and 2010, providing a platform for business meetings and linkages between companies from Germany and sellers of CERs. The event is a good opportunity for high-level meetings between BMU and MoEF, and for looking at the future prospects of the CDM market in India. The next Carbon Bazaar is scheduled for 12–13 May 2011 .

The initiative is helping to enhance the necessary capacities of project developers, government officials, engineers, consultants, NGOs and other players throughout India through awareness raising workshops and targeted capacity development programme with CDM market studies.

Results achieved so far

The first two Carbon Bazaars were highly successful. More than 1,000 experts participated, and over 200 meetings took place between buyers and sellers. More than 20 of these resulted in memorandums of understanding signed between the business parties. To sustain this success, the event will be repeated in 2011.

The CDM initiative has published a country study entitled 'India: A CDM market overview, identifying knowledge gaps and suggesting ways to overcome the challenges, including key areas of intervention'. The study provides the different stakeholders with comprehensive information about the national CDM market, and can also be used as a baseline to measure the success of national support programmes and of the initiative itself.

MoEF has asked the initiative to undertake capacity building measures with forestry departments in 11 Indian states, to help them develop CDM forestry projects. To this end, for local level support, the initiative has established three CDM cells in the states of Madhya Pradesh, Jammu and Kashmir, and Bihar.

Another result of the technical and financial support given by GIZ and the CDM initiative is the development of the website www.cdmindia.in. This web platform offers the world's first 100% electronic system for submitting CDM projects for approval.

The initiative has already produced tangible impacts, such as the greater involvement of different market players, including SMEs, in the development of CDM projects. Trading of CERs has increased between German buyers and Indian project developers. German low-carbon technology has also become more readily available to companies with CDM projects, and awareness has risen about the potential for high quality and innovative CDM projects.