ROLE OF NGO’S IN CDM by Prof. Dr. Syed Shabudeen. P. S ROLE OF NGO’S IN CDM by Prof.Dr.Syed Shabudeen.P.S. Kumaraguru College of Technology.

Why is this so? • CDM is a market based mechanism • Markets are efficient but ruthless • Markets are concentrating on CDM projects with high revenue and better cost benefit • A/R (Afforestation and reforestation) and other Rural sector based projects are more over have following disadvantages Cumbersome risky

UNDP Observation (CDM Assessment report, Nov 2006)

Farmers and carbon credits • Farmers are eligible for carbon benefits on commercial plantation and agro-forestry activity. • Industry focusing on other sectors as they have better cost benefit. • Thus a gap existed where Farmers and other bottom of pyramid sections who could do with additional income are not getting CDM income. • Can address livelihoods simultaneously NGOs can be a bridge between farmers and CDM income

UNDP Suggestion for right sect oral mix in CDM projects, as part of Assessment(2006) • More proactive (top-down) investment in the development of new baseline methodologies (both small and large-scale) that are pre-approved by the Executive Board, reflecting the ‘public good’ nature of methodology development (possibly utilizing some of the growing revenues from the EB administrative fee) • Further development of guidelines and procedures pertaining to programmatic CDM projects; • Expanding the types of land use, land use change, and forestry projects that are eligible under the CDM, particularly projects (such as sustainable agricultural practices and the rehabilitation of degraded lands) that offer a range of carbon mitigation, climate change adaptation, and development benefits;

CDM Project TITLE Improving Rural Livelihoods through Carbon Sequestration by adopting environment friendly technology based afforestation practices. NGOs – CDM Agriculture company or University –Provide Clonalseedlings, plantation guidance and Market tie up in purchase of Timber Bank - Loan required to farmer BioCF - Purchaser of Carbon Credits

Benefits to Farmers • Additional revenue from CDM. • Effective market linkages. • Gainful utilization of their degraded lands & lands under subsistence agriculture. • Removal of financial and technical barriers.

Why aren’t there many CDM projects on Agro Sector There are issues; at following levels – Farmer – Project sponsor – Project developer – Project Implementation – DNA – CDM rules – CDM market

Farmer level issues • Many farmers required – Meeting the land ownership requirements – Very stringent CDM requirements; GPS, Polygon etc. • Legal requirements – carbon ownership of individual farmer to a central entity – Mortgage of plantation to the lender of loan vis-à-vis the CDM project requirements Inherent contradiction – not being able to fund the carbon project’s initial expenses – but deserving the maximum out of the carbon revenue received due to their poor income level scenario • Extra costs of annual monitoring due to many farmers as against a single location for other CDM projects. How do you prove Additionality ; Carbon income has been the driver for him to take up the plantation

Project sponsor Who can and should be project sponsor for CDM projects helping many farmers/Rural communities? Farmers them selves, if so, what form? Development organizations, if so, which way? Government, if so, how?

Project developer • Is it possible for only CDM consultancy, as is done in other sectors ? If some developer invests for development, what is the rightful share that he should be eligible? Will it not lead to a criticism of exploiting or profiteering at the cost of the vulnerable sections of society

Project implementation level The requirements of project monitoring are cumbersome, spread out in wider area, in comparison to the CDM projects of Industry,which are in a single location and capable and qualified personnel are already available. How to address this? • Who will bear this cost till receipt of Carbon income?

DNA level Is there a requirement to give special emphasis to these projects Definition of forest Evolving, funding India specific methodologies Addressing requirements of Voluntary market such as Sustainable forestry certification

CDM rules Making them less stringent especially – Leakages – Additionality – Eligibility of lands

CDM markets • Better prices to A/R CDM credits • Tradability on all markets • Better prices to A/R CDM credits

Why A/R CDM projects aren’t in sufficient numbers • Industry associated with plantations sees the benefits have to go to farmers and hence feels not it’s cup of tea • Govt. depts. see risk of not getting a CDM project registered, difficult to justify investments Farmers are not in a position to group them selves on their own and commission CDM projects for them selves

How to break this log jam • Some body should take the role of CDM consulting and CDM project sponsoring role simultaneously Supporting few organizations which have capacity to develop CDM projects to take up the above role Support pilots/models related to the sector Provide new methodology Development specific to Indian conditions India specific carbon funds dedicated to purchase carbon credits from A/R and other rural sector projects on VER/CER basis.

Infrastructure and Incentive Support • Select few institutions across country to be supported with infrastructure and incentives • Infrastructure & Incentives – NRSA data acquisition costs – GPS/GIS equipment – Field organization to mobilize the people – Sponsoring of model, prototype CDM projects – Investments in the form of grant, equity, soft loans in some social enterprises – Providing for the cost of Experts on tapering basis