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CARBON TRADING
Gaining Momentum
One year after the ratification of the Kyoto protocol, Nepal is beginning to establish some CDM projects
By THAKUR AMGAI
Even as the regularisation of material trading is still beyond the comprehension of many Nepalese, the country’s developmental organisations are venturing on something as complex as trading of reduction in carbon dioxide emission.
The process has begun after two projects (Activity 1 and Activity 2) of Bio-gas Support Program- Nepal (BSP-N) was registered in the CDM Executive Board December last year.
According to Saroj Rai, executive director of BSP-Nepal, 18,000 bio-gas plants have been registered in each projects, out of about 140,000 bio-gas plants installed under the assistance of BSP-Nepal.
BSP-Nepal has signed agreement with the Community Carbon Development Fund of the World Bank to sell 93,883 tons of carbon to be traded in a year. According to Rai, BSP-Nepal, is negotiating to fix the rate at $ 6 – 7 with the fund, which had shown interest to buy the emission reduction at $ 5 per ton earlier. It had sent a letter of intent to BSP-Nepal to buy the emission reduction long before the Kyoto protocol had been endorsed.
The formal process got stalled because of Nepal's delay in the submitting instrument of accession to the United Nations Framework Convention on Climate Change (UNFCCC), and formation of Designated National Authority (DNA).
Now, after Nepal submitted her instrument of accession to the UNFCCC on September 16 last year and a DNA was formed through a cabinet decision on December 22, not only the official processes of this project resumed, but it has also opened avenues for interested parties to develop further projects.
Experts say Nepal has a lot of prospects to develop more Clean Development Mechanism (CDM) projects.
After the official registration of the two projects, Nepalese implementers are working on developing other several prospective projects. Any project that can reduce the carbon emissions by replacing use of fossil fuels by clean energy can be developed into a CDM projects. BSP-Nepal, itself is capable of developing many other projects. From among 140,000 biogas plants installed under the program less than 40,000 have been registered.
Other projects that have gone into the process of developing CDM projects are Micro Hydro Power Project, Improved water mill, Solar Tuki, Improved Cooking Stove, Safa Tempo Transportation, Landfill Site Solid Waste Management and Vertical Brick Kiln Shaft.
According to the provisions of Kyoto protocol, Nepal, as an non-annex I country can sell its emissions reductions measured as certified emission reduction (CER), to the industrialised countries. The industrialised countries that have ratified the protocol, known as Annex I countries should reduce their emissions by 5.2 per cent below the level of 1990, by 2012. If they cannot reduce the emissions by themselves they can purchase the reductions from developing countries.
"Kyoto protocol is the first binding agreement to do something to check the effects of climate change," says Jeewan Acharya, climate change officer at the Winrock International Nepal. "The speculations that it might not be implemented have ended after the ratification of Kyoto Protocol on February 16, last year."
The protocol signed in 1997, in the third meeting of UNFCCC, held in Kyoto, Japan, came into effect after Russia-that is responsible for 17 per cent of the total green house gas emissions- ratified it on February 16, 2005.
One year on after the ratification of the protocol, as some countries with higher expertise have gone much ahead in the process, Nepalese development workers, too, are working hastily to find out new prospects and cash the existing ones.
As the Ministry of Environment, Science and Technology (MoEST) – nominated focal ministry for the Kyoto protocol - is working out detailed structure and procedure of the DNA, development workers are advocating including feasible projects such as the Hydro Power projects and community forestry in the CDM. A meeting of concerned parties in Montreal, November last year withheld decision to include non-renewable biomass (community forestry) in the CDM projects.
"Such projects not only help to reduce the emission reductions, but also work as a potent tool for sustained community development," an expert points out. "We have to develop our expertise to get better rates for the emission reduction and include feasible projects in the CDM."
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