CDM Projects Analysis in China Nan Luo Erasmus Mundus MSc European Forestry 26/02/2009 Climate Change and Higher Education

Content  Basic CDM know-how  Current status of world CDM development  Current status of China CDM development  Case study of rural biogas project  Conclusion

Basic CDM introduction  A project-based mechanism under the kyoto protocol that aims at reducing greenhouse gas emissions in developing countries. -Supports the developed countries in reaching their emission targets set by the kyoto protocol. -Supports the developing countries in achieving a higher level of sustainable development through technology transfer and financial assistance.

CDM Application Procedure (8-12 months)

Greenhouse gas  CO 2 : Results of combustion of fossil fuels (coal, gas and oil) for energy purpose and deforestation, (Global Warming Potential=1)  CH 4 : Mainly by-product at coal mines and in anaerobic processes (landfill, lagoons, etc), (GWP=21).  N 2 O: Mainly in industry (Fertilizer production), (GWP=310).  Others (HFCs, PFCs, SF6, etc): Mainly by- product in industry

CDM projects by host party  Until 13 Feb 2009, 1,391 CDM projects have been registered in EB, and total 254,608,649 CERs (969 projects) has been issued.  China is currently leads the supply market

Registered CDM projects (~1st Feb 2009)  The fraction of renewable energy projects has oscillated around 60% of all CDM projects.  The HFC, PFC and N 2 O projects only account for 2.2% of the projects but represent 76% of the CERs issued, and 26% of the CERs by Numbers (%) by type CERs issued by type

CDM projects in the pipeline and expected 2012 kCERs (~1st Feb 2009)

CDM projects in China (Registered) (~1st Feb 2009) No. (%) by type2012 kt CO2

CDM projects in China (in the pipeline) (~ 1st Feb 2009) Numbers of CDM projects by type

CDM projects in China (in the pipeline) (~ 1st Feb 2009) Total 2012 kCERs by type

Projects Comparison with India (in the pipeline ) (~ 1st Feb 2009) Numbers of CDM projects by type

Findings  The largest CERs supplier in the world.  CDM project developed quite fast.  The project type is dominated by hydropower from the numbers, and by HFCs andN2O from the CERs amount. The project type is less diversified.  Projects involved with Technology Transfers are rare, discounting the target in achieving a higher level of sustainable development.

Case study: Rural biogas project Benefit  Improve the quality of environment and the living conditions of farmers (e.g., help improve kitchens and household toilet facilities.)  Promote to switch from traditional energy to clean energy, thus reducing greenhouse gas emissions, help achieving the rural electrization  A decrease in respiratory and eye ailments associated with smoke from traditional fuel stoves.  Decrease in the overall quantity of pathogens in their homes.  The effluent from the digesters can be used as fertilizer.  Rural households benefit from reduced labor associated with collecting firewood for cooking  …

Case study: Rural biogas project Bottleneck  Domestic environmental law constrain – rigid environment pollution punishment regime hasn’t been established, no incentive to change the current status;  Investment barrier;  Financing barrier;  Project scale is relatively small and project is broadly located, leading to high gird operating and maintenance cost (lacking of management experience on large scale distributed power stations);  CDM knowledge and DOE resources constrain;  Complex CDM application and monitoring procedure.

Case study: Rural biogas project Suggestions  Taking the opportunity of CDM financing by developing CDM project (CDM knowledge diffusion)  Government funding  Create preferential policies incentive (tax, subsidy, financing, etc.)  Technology transfer  Enlarging DOE resources  Simplifying CDM application procedure and monitoring methodology.  Training programme  Propaganda on environmental and energy issues.  Bettering policy and law system  …

The way to go…  Taking advantage of the abundant resources and developing the potential CDM project (Research…);  Policy direction, prioritizing the CDM project development, especially those can really fulfill the CDM targets (sustainable development and technology transfer) (How?);  Enhance the stakeholders (government, banks, international organizations, etc.) involvement;  Enhance the CDM propaganda, encourage and help the involvement of small enterprises;  Simplify CDM rules and procedures, shorten CDM project cycle and reducing transaction cost.

References  UNFCCC website  UNEP Risoe CDM pipeline Analysis and Database  Clean Development Mechanism in China website

Thank you for your attention!