A to Z of Climate Change | A common platform for all stakeholders to discuss everything on climate change and related markets. Feel free to contribute.

This economic crisis has put our backs to the wall….Landslides at stock markets, hundreds of thousands of lost jobs, volatile commodity prices ensured that the important Poland CMP went almost un-noticed. World leaders are concerned that this will provide various countries an excuse to delay the required action in the field….and frankly speaking their doubts have been instated by the fact that several projects have been shelved or atleast stalled. This crisis ensured that we at ClimateThinkers were also stretched at our works and last 2-3 months (chaotic months) went by without any update on the page……..we sincerely apologize to our readers for this long period of lul and ensure that in coming days, we will capture the essence of last 3 months, through series of posts.  The important issues that we have on our agenda are—– Obama and environment. — Economic Crisis & Climate Change — Poland to Copenhagen—  Upcoming World Energy Summit     

Action has began in GCC at full flow as Masdar (Future Energy Company, UAE) signs a major deal, with a plan to reduce more than 100,000 tonnes of CO2 equivalent per year as of 2010.

 Company made a formal declaration regarding its deal with Gulf Petrochemical Inds. Co. , Bahrain to monetise the emission reduction associated with CO2 capture and recycling at GPICs Fertilizer facility.

 The project, which will capture carbon dioxide from flue gas and then recycle the captured gas as feedstock in the production of urea and methanol. A real example of how technology could help us sail through the challenge of global warming and depleting source of energy.

The process for this first of its kind CDM project shall be totally managed by Masdar leading to the project registration. Organization shall also draft a new CDM methodology for the same.

 Masdar, an initiative of Abu Dhabi government is largest single enterprise of its kind with invest plans of around USD 15 Billion towards development of clean energy.

 Masdar has  started aggressively and has already registered various first of its kind projects to it name, including an investment of around USD 2 billion in development of Photovoltaic Solar Energy in collaboration with Germany. However, the targets are high and as rightly indicated by Sultan Al Jaber, CEO of the organization - ” We intend to move fast and with maximum efficiency, achieving dynamic results by creating successful associations and partnerships.”    Way to go Masdar.

The EB-40 report at para 40 states that (Actual Report: http://cdm.unfccc.int/EB/040/eb40rep.pdf)

“The Board noted that many proposed CDM project activities in the energy sector in India seek to demonstrate additionality by means of investment analysis applying a benchmark of 16%, which is based on tariff orders published in accordance with the Central Electricity Regulation Commission. The Board is concerned with the use of this value as a benchmark for proposed CDM project activities, as this value is used in tariff determination for CDM projects and for non-CDM projects. Therefore the Board is of the view that this value is not a suitable benchmark.”

Where do we go now. As such Indian SMEs are not very habitual in maintaining standard financial statements and logs. How does one decide on benchmark if CDM board refuses to accept pointers from national authorities.

In India, the tariff is determined based on national guidelines of State electricity boards do the same on independent basis. All use a benchmark of 14% - 16% Return on Equity to determine the tariff for projects. However the other parameters assumed while tariff determination are usually mean or average figures. The common parameters in a project are Capital cost, Operation and maintenance costs, interest rate of loan, percentage of equity and debt in a project.

These parameters suffer a great lot of variance in ground reality that benchmark of 14 - 16 % is just an indicator or pointer, and can be effectively used to determine the profitability from projects. So using the benchmark for CDM and non CDM projects is completely justified since CDM and Non CDM projects are going to have altogether different project parameters.

In the absence of a readily available benchmarking pointer, the situation would add further to complexity at the time of validation and never ending woes of DOEs.

Being associated up-close to the Emission Reduction projects, I have come across all sorts of GHG mitigation projects which can be broadly categorized into following:

1. CDM projects where some part of capital is sourced by forward selling CERs
2. CDM projects which earn credits later and entitled to sell at best possible price.
3. Projects originally intended as CDM projects but ultimately target VER market.
4. Projects specifically designed for VER market, owing to their unique nature.
5. Projects which land up no where, but was considered a genuine GHG emission project by originator

The category that worries me most is 5, because there could be a large number of projects which genuinely deserved an emission reduction income stream to be on track but missed it due to not so right approach. Here are some key pointers to take a project through successful process for a project developer and person who originates the same for a brokerage / aggregation / Consulting organizations .

• Biggest mistake is to over estimate the emission reduction potential of a project, based on thumb rules or some standard formulas. Every project is unique in tems of its baseline and emission reduction potential. Before embarking the journey of project development based on emission reduction revenue critically examine its emission reduction potential.
• Next is assuming that a project would fit on an approved methodology or one of the baseline scenarios in an approved methodology. People who are familiar would easily agree that one of the most difficult projects are bagasse based cogeneration. So again, each project is a unique one and be originated in careful manner.
• Once you know what end result / product is required from a system or process one should weigh all the options and consult relevant people, who are familiar with technology and emission reduction projects. So plan a project in consultation to avoid new methodology complication as much as possible. Once frozen, stick to the same, not making too much changes during course of implementation.
• All in all technical due diligence of a possible emission reduction project is the key to success of smooth achievement of end result i.e. delivery of Reductions.

For any suggestions and queries, feel free to contact harshpreet@climatethinkers.org (+91 9810071743)

The DOE is requested to explain to the Executive Board the level of assurance with which it can validate that the CDM was seriously considered in the development of this project activity

This is the most common question that pops up during “Request for Review”. What to do? How does one prove that one seriously thought of CDM related revenues during project conceptualization stage? Being very familiar to Indian projects, I can only present my views on Indian projects.

- In India, although CDM revenues are considered and always in mind of project developers while conceptualizing but while applying for bank loans CDM revenues are not included in inflows. The reason is simple, Indian banks are not mature enough to understand the returns and risks associated. This fact usually works against the CDM consideration issue during validation.

- Secondly, the state renewable energy policies don’t have CDM related inflows incorporated in their financial analysis for tariff determination. The tariff is determined based on assumptions which are usually quite skewed from actual project credentials. So when the project proponents actually start the projects he is well aware that his projects is not cabale of returns indicated by state policies but CDM revenues would definitely give some leverage to bridge the gap. CDM revenue is although important to project proponent but third party documentary evidences are not in favor of CDM guidelines.

- Next in line is technical feasibility. In most cases when SMEs are developing small scale projects the technical considerations for setting up of project activity in India usually don’t involve any elaborate due diligence or feasibility studies. The feasibility of technical options combined with CDM approach to achieve the end result would add a lot of weight to the CDM consideration. In india, the projects are sometimes solely finalized on word of mouth in the business community. So all in all if a technical due diligence of available options is done via some consulting organization for the proponent, it would definitely help the proponent to justify the CDM consideration for his project.

All the more it is important and in best interest or all the parties that screen in the form of UNFCCC - RIT team tries its level best to let only the genuine projects get through. My only suggestion would be to make proper documentation at each stage of conceptualization and planning. That gives a confidence and weight to validator and yourself during the validation of project.

(also contributed at: www.reutersinteractive.com/carbon )

Glistering skyscrappers, lush green express ways, larger than life man made islands are real indicators of the strength of strong willed men. The men who transformed a rough desert into a place where people from across the world enjoy living in. This is the story of UAE, one of the leading OPEC nations.

Through their rich oil reserves they have drove the machinary of this world for years and now they are the one who are leading this world to a new era of ENERGY.

World Future Energy Summit’2008 began yesterday in Abu Dhabi. The highlights of the day were the initiatives UAE is taking to make this world an energy efficient place. They are not the one who lack oil, still they are the one who understand the importance of it and are setting benchmarks in the world, when it comes to being energy efficient.

Masdar, Abu Dhabi’s multi-billion dollar response to the global need for alternative sources of energy announced its plan to set up a ZERO WASTE CITY for as many as 50,000 inhabitants. Masdar City, the world’s only zero-carbon, zero-waste city, will be car free.  Personal Rapid Transport vehicles, powered using renewable energy, will move residents and visitors around the city with frequent convenient stops.This billion dollar project will be supported by BP as well.

Further, Masdar also  invited 22 leading international manufacturers of solar photovoltaic (PV) technology to test their products where it counts, in the environmental conditions of Abu Dhabi. Masdar is is carrying out one of the largest ever field studies of solar panel technology and supplying clean, renewable energy to the local electricity grid for the first time in the process.

Masdar’s ‘PV Competition’ will monitor how different technologies endure the effects of heat, humidity and sand. The systems will be ranked for performance, durability and cost efficiency in a stringent series of tests, over a period of 18 months, to gain the most accurate and reliable picture of the long-term utilisation of solar PV power.

Dubai shared the progress of the largest green building in the world. The project is expected to be completed in 2009.

These emirates states have set up high benchmarks to meet for the world. Let’s hope the other nations learn fast and move with same gusto as these ppl to take this world ahead to this new era of ENERGY. 

Surprisingly enough as per the latest data agriculture sector accounts for more than 17% of all industrial greenhouse gas emmisions. This sector has even surpassed the transportation segment. One third of these agricultural are contributed by by nitrogen fertilizers. These fertilizers produce large amount of nitrous oxide which is 300 times stronger than CO2.

Recently a US based company Arcadia Biosciences along with Chinnese Govt have announced its plan to give carbon credits to farmers who plant its genetically produced crops. Company touts that these plants are genetically modified to make it absorb nitrogen more easily, hence requiring less amount of fertilizers. It has announced that using this rice instead of normal crop could generate $1.5 billion for farmers. As says its CEO Mr. Eric Ray - Its a way for farmers and us to make money.

As its first step the company is working in Ningxia, which uses more nitrogen fertilizer than any part of the country. The plan is under testing stage which is expected to be implemented by 2012. In future they have plans to extend this by creating GM wheat, sugarbeets , maize, rape seed oil, cotton, sugarcane and sod, all of which they hope could also be grown for carbon credits. They hope to expand their program globally.

Sounds a winners idea to me …….something that can reduce emmisions but this amount is surely something to look forward for. However, i feel the major hurdle for Arcadia will be regulatory clearances. China has allowed GM crops to be planted and sold before, but has never allowed GM staple foods like rice or soy to be grown and sold for consumption. The project is likely to meet  resistance from anti GM Protestors too. Also the general consensus has also not been in favour of Genetically modified food, especially in EUROPE, where  there is lot of hatred about the concept. So, whats ur call?

EUREKA…EUREKA…EUREKA….. 

Rate of generation of great ideas is directly propotional to depth of crash in stock market……..Varun, Circa 2007.

 The recent 900pts dip in stock market, where I lost a big fortune (almost most of my monthly salary this MNC pays m) led me to evolve this beautiful relation…..

One of these ideas is to transform my house into a money mending machine…..the maxim is GO GREEN TO EARN GREEN…:)

A rough idea of how it work….How much does a family pays on its electricity/water bills? Lets say an average of around 3Kbucks….What if one could cut these expenses by half and invest them in some Power Sector SIP instead…Man Reliance Power Fund is giving return of almost 100% (stock market virus is making me go crazy)…Over the life cycle of a house,  considered 50 years, even at low rate of 12 percent this amount goes to somewhere around 3 Crores….YEAH dude…i’ll be a Crorepati…so could be you….. 

Let’s see how it works…

As per TERI Eco friendly house is one that depletes the natural resources to the min. during construction and operation of a house.

Though the initial investment involved in building this house is higher than that of a normal house (Consultant take a huge chunk in it..) ……it has been estimated that this differential amount spent can be recovered in around 4-5 years. 

Lets now see the way to go…. 

The ideal way to go about is to make a new house as way of construction & architecture plays a big role. Use of building material like flyash bricks, ferro cement,compressed earth blocks and minimum use of steel and concrere help save a lots of energy. 

However using various methods one can make the things work even in an existing house… 

Reduce need for lighting……Arrange the house in a way that it receives the ambient lighting and the dependency on artificial lighting is low. The direction of rooms makes the difference. Better to have your study room in a direction where sunlight is ample.

Try replacing incandescent lights with CFL lamps…though it doesnot work in areas where you need bright light, but surely can be used in Washrooms and in drawing rooms. LED are even more energy efficient, but surely much expensive presently to really compensate for the capital investment.

Use Energy Star compliant equipments….and always look out for Bureau of energy efficiency rating on electronic products you buy.

Minimize Cooling and Heating Costs….: False ceiling in a room can do wonders in this matter. Using an additional layer of ceiling, with nicely selected material not only give your room a uplift but also makes it a lot cooler. Use of glazed tiles or adding a layer of earthen layer in the cieling is recommended by specialists.

Providing sufficient sunshade to the west facing windows supplements substantially and helps in keeping the room cool at night.

Use of water- based non-toxic paint also make the environment cooler and are chemicaly safer too as they donot spew harmful volatile organic compounds. 

Further, greenery provides that extra pinch of oxygen that makes the environment even cooler. So, placing plants in the house further chill up the environment.

Save Water use DEOs….again one of those creepy ideas i get when the work load is high…:) However, there are some real practical tips which can help one save water by around 40%. Water saving fixtures, low-flow showers, double flushing cisterns are few of them. Water used for washing and showers can be reused for flushing….that’s something that really doesnot require cleanest of water…isnt it..

Rainwater harvesting…a regular mechanism being used in various building has shown significant results. The stored rainwater is soft, arsenic free and can be used for drinking. Allowing the rainwater to percolate into ground also helps increase the water table in the area.

So, there are ample ways available to reduce your expenses . Further , you also get additional fringe benefits such as cleaner environment and a inner satisfaction of contributing to the cause against global warming.  

Intense passion can really make a man forget about his strenghts………A researcher tends to miss out how technology is man’s biggest strength in the present age……

Dr.R.K. Pachauri, Director General of TERI and head of IPCC recently quoted in an interview to a famous website that the TATA’s 1 lakh gives him a nightmare. He is afraid of rising number of cars on the road…..

Dear Sir, we really appreciate your concern for the global environment but please donot forget that going back to bullock carts is surely not the alternative. Technology is our tool, not the extra load that we carry.

Few measures that can really help us improvise the emission on roads could be:

Improvise the public transport….why are we still using age old TRAMs in Kolkata, even when it takes 1hr to travel a distance of 10 km on it….Cant we just replace it with a faster means or atleast upgrade the technology…..We shouldn’t forget that europeans have the best tram system available ……there these are used as the mainstream mode of local transportation…..Only reason they could use it even in these days  is regular upgradation of technology….which we have never thought about……

Why cant we have a differential tax structure, where a car with average more than a set norm get rebate and those with less than that be penalised…….it will itself make private sector go all out for better technology.

It was engineering skills of man that helped shape this earth into a beautifull planet….n it will be these skills if put to use effectively that will help succeed in future……

Real estate developers in India don’t want to be left out of the Carbon Credit boom, currently being relished by power, steel and renewable sector developers on the majority. So far (to my knowledge, corrections are welcome) there have been only three projects from India to apply for CDM registration. Currently one project is under validation and shall come up for registration request some time soon. The project is energy efficiency measures taken up in commercial building i.e. “Technopolis” in Calcutta. A registered project in India is developed by ITC i.e. Sonar Bangla Shearton at Calcutta. So in a way Calcutta leads the country in energy Efficiency projects for Buildings. Latest in the fray is project from Chennai named Olympia.

For the last few days the largest number of queries received at Emergent Ventures India (one of the bigger names in Carbon Consulting and Management) is from Real Estate Sector. Either everyone wants to contribute positive to the global cause of climate change mitigation or everyone wants to make hay while the sun shines.  Even if people want to make some extra money, the brighter side to picture is that people will contribute some to the environment.

Real estate developers are thinking of energy efficient appliances, designs to leverage the market riding the high horse of preferential marketing to green buildings and may also earn some extra buck through carbon credits. Since projects in real estate don’t amount to considerable number of emission reductions, going for independent project registrations to UNFCCC could be a possible solution. The programmatic CDM recently launched by UNFCCC could be savior to construction industry but I have my doubts for P-CDM (mainly related to balance between flexibility and complexity). The voluntary market holds a big opportunity for real estate developers. The projects can be coupled with ease and developed independently.

So if you are currently thinking or planning a commercial / residential building, just go through the idea of making it energy efficient or a green building as one may say. A recent survey clearly indicated that people are ready to shell out higher amounts for environment friendly products and services.  So no doubt the bookings would happen at higher premiums nonetheless there is carbon credit income additional to this.

The awareness hasn’t reached a level where all of the developers would think on same page, although it is spreading like a jungle fire. So a green revolution of an innovative kind may be in the offing. Like of most of global citizens and patriotic Indians I look forward to same.

Please feel free to share your views

 
-          Harshpreet Singh (sherrydhingra@yahoo.com)