Milind Pathak, Leena Srivastava, and Sudhir Sharma* Tata Energy Research Institute, New Delhi
More than twenty potential Clean Development Mechanism (CDM) projects in five different sectors are reviewed in this chapter. They include new technologies and fuel-switching options for conventional power generation, applications of renewable technologies for power generation and agricultural activities, and efficiency improvements in the production of cement and iron and steel. All projects advance sustainable development in some form. Non-climate environmental benefits include improved air and water quality, reduced solid waste, and soil protection. Development benefits include rural electrification, employment opportunities in particular groups, and improvements in industrial efficiency. An analytical tool—the Analytical Hierarchical Process (AHP)—is used to evaluate the benefits of different options— in particular, their consistency with national priorities articulated in the planning process and their environmental and economic development benefits. Among the abatement opportunities reviewed, there appears to be a very high overlap between projects that are low-cost and projects that are consistent with India’s development priorities. In three of the four sectors for which comparisons can be made, the first and second options ranked by price are also the first and second options when ranked by their non-carbon benefits. This suggests that projects advanced under the CDM would make a significant contribution to India’s own development goals.
Planning Priorities and Development Paths
In India, the planning process takes the form of FiveYear Plans formulated by the Planning Commission.1 The development objectives laid out for the upcoming period provide a touchstone for assessing the CDM’s potential to address domestic priorities. The objectives stated in the ninth and current Five-Year Plan (1997–2002) reveal a mix of economic, environmental, health, and social goals. They include
• promoting agriculture and rural development, • accelerating economic growth while maintaining stable prices,
• improving the supply of drinking water and
primary health care,
• containing the population growth rate, • ensuring environmental sustainability of the development process,
• empowering women and socially disadvantaged groups,
• promoting and developing people’s participatory institutions, and
• strengthening efforts to build self-reliance.
The opinions expressed herein are those of the authors and do not necessarily reflect the positions of their institutions.
Financing Sustainable Development with the Clean Development Mechanism
After independence in 1947, planning was initially geared toward the development of agriculture, with a focus on irrigation and power. Over time, emphasis has shifted toward energy-intensive sectors and energy generation. The growing importance of the energy sector is evident from its increasing share of total outlay under successive plans, rising from 19 percent of total spending in the first plan to 27 percent in the latest. Energy planning in the Five-Year Plan is supplemented by some medium- and long-term planning by other groups. For example, in 1985, the Advisory Board on Energy drew up plans for the energy sector up to the year 2004–05. Similarly, the Central Electricity Authority has a National Power Plan up to 2011. The principal objectives outlined in the Ninth Five-Year Plan for the energy sector are to meet the economy’s energy needs through efficient and sustainable use of resources. This will be achieved by developing institutional mechanisms for energy conservation, demand management, research and development (R&D), and regulatory mechanisms. Continuing the effort to promote renewables, the government is aiming for a gradual commercialization of non-conventional energy and increased exploitation of...