Countries could reach a new climate agreement in Paris next week to slow down global warming but there’s an adverse payoff for India as the 1997 Kyoto Protocol from which it had benefitted a lot is expected to be tossed aside.
The first commitment period till 2012 of the protocol, the only existing climate treaty, has ushered clean technologies into India through the Clean Development Mechanism (CDM) that provided for substantive funding by rich countries through carbon trading.
The second commitment period was fixed three years ago but is yet to take off.
In its report to the United Nations climate framework, the CDM executive board, which is the funding mechanism under the protocol, said it had cut down its programmes by a third and laid off 15 workers due to the continuing “disastrous state” of the carbon market.
Developing countries like India and China have been pushing for a new lease of life for the treaty which only required developed nations to take on legally-binding emissions targets.
The two countries received around 80% of the CDM projects because of their capability to reduce emissions from new schemes. Among the beneficiaries were the Delhi Metro Rail Corporation, Okhla waste-to-energy plant and afforestation activities in states like Haryana and Himachal Pradesh.
The call for ratification does not appear to have had an impact as an Indian negotiator said “we will walk from Paris with a coffin for Kyoto”.
Sources say the chances of the second commitment period of the protocol seeing the light of day appear bleak as less than half of the 144 countries involved have officially agreed to participate
In 2012, the European Union, which was the biggest buyer of carbon credits – one credit is equal to a tonne of emission saved – decided to prioritise CDM projects to the least developed countries and small island nations because of a geographical imbalance in distribution of the projects, as China and India were getting the most.
But the EU decision has mostly remained unimplemented as the proposed beneficiaries have not applied for new projects because of the declining carbon market.
Environment secretary Ashok Lavasa had another analogy to offer. “In global warming some streams dry up,” he said, while referring to the discussion on the Kyoto Protocol.
The price of a carbon credit in European exchanges is less than 10 euros, making the CDM projects financially unviable.
Many civil society groups have said relying on carbon markets is unproductive and instead direct finance should be considered, an option being examined for the Paris agreement.