Cement, Energy & Environment Jan-Mar 2002

; In layman ' s terms, a company from an industrialised country invests in building a highly efficient plant in a developing country. The resultant reduction in emissions -lower than what it would have been wi thout the investment and termed certified emission r eductions (CERs) - is shared by the developing country partner and investing company. There are guidelines to follow in managing this entire process. An Executive Board (EB) constituted from represe~tatives of both developed and developing countries and operating under the guidance of COP/ MOP, is responsible for the operational management of CDM. The Board in tum is supported by designated operational entities (DOEs) . A DOE has twin responsibilities: validation of proposed projects, and verifica tion and certification of CERs. The hos t developing country, where the project is located, certifies the projec t' s contribution to sustainable development in the country. A baselines is essentia lly a method of comparison, in which a reference group is identified based on the project activities against which the proposed project emissions shall be compared. Th e recommended guidelines in the Marrakech Accord on methodology for develop ing baselines are: Existing actual or historical emissions Emissions from a technology that represents an economically attractive course of action, taking into account barriers to investment, or •!• The average emissions of similar project activities undertaken in the previous five years, in similar social, economic environmental and technological circumstances, and whose performance is among the top 20 per cent of their category. CDM provides an extra stream of revenue to make the adoption of energy efficiency lucrative and further reduce the payback periods for energy conservation measures. Despite the complications in energy efficiency projects, however, the general trend of energy audits carried out before undertakin g conservation measures, provides a basis for constructing baselines. ESCOs operational in this field also provide an institutional set-up for developing CDM projects. As mentioned earlier, verifying emissions reduction is an integral part of generating CERs, which in tum requires a sound monitoring plan, ESCOs provide that intermediation , their pay-offs being linked to energy savings. Though the current CER market has shrunk in size following the USA's walkout from the Kyoto Protocol, it is still offering a prize in the rang~ of $2-8 per ~ ton C0 2 (denomination of one CER). Translated into kWh saved, this is approximately Rs 0.2 a t current CER prices. Courtesy : Tile Bulletin on Energy Efficiency, Feb. 2002, Pp. 18-19. E-mail: winrock@vsnl.com Web: www.renewingindia.org Fax: 91 -11-6146004 41