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Promode Kant

Abstract

The cost of carbon sequestration under the Clean Development Mechanism (CDM) of the Kyoto Protocol is far higher than the normal afforestation costs as it includes the opportunity cost of the land and the costs of project formulation, regeneration, maintenance, monitoring, measuremcnt, verification, baseline construction, leakage accounting, accessing markets and the costs incurred in ensuring additionality, biodiversity conservation and the credibility of the certification system. For purposes of reforestation of degraded forests the ecosystem productivity of the bio.geographic zones in which these forests lie also influences the costs to a very high degree. In India the land rentals alone exceed the current tentative price range of carbon. The withdrawal of the USA from the Kyoto Protocol, the very real possibility of trade in 'hot air' and the limitations on the use of carbon credits earned through carbon sequestration under the CDM would make a demand induced price rise for carbonoeredits unlikely. Also, demand for higher volumes of carbon sequestered in forests may also drive the costs up, as greater requirement for land would enbance its rental, notwithstanding the advantages of the economy of scale. The high transaction costs, arising out of the stringent Kyoto conditionalities and monitoring quality expected of the CDM projects, present another formidable barrier to the profitability of such sequestration projects.

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Promode Kant , R. P. S. Katwal

Abstract

Inclusion of afforestation and reforestation as eligible activities in Clean Development Mechanism (CDM) under the Kyoto Protocol has necessitated change in the existing definition of the baselines. The Subsidiary Body for Scientific and Technical Advice (SBSTA) constituted under the United Nations Framework Convention on Climate Change (UNFCCC) has suggested five options for this purpose for discussion and adoption at the ninth Conference of Parties to UNFCCC. The authors have analyzed the relative merits of these options and have argued that on account of scientific desirability , technical feasibility and economic considerations , the most appropriate definition for baselines for forestry projects under the CDM is a variant of one of the options that defines the baseline as the "scenario that represents the net changes in carbon stocks within the project area in the most likely prospective land use at the time the project starts. It is subject to the condition that the construction of the scenario be based on the land suitability classification , land ownership and legal and policy restraints at the beginning of the project and , further , that the project shall take all necessary and possible measures to reduce the emission of methane and nitrous oxide gases due to project activities".

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Promode Kant

Abstract

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