NGO "ANOTHER WAY" (STICHTING BAKENS VERZET), NETHERLANDS, SUSTAINABLE INTEGRATED SELF-FINANCING DEVELOPMENT PROJECTS AND ADVANCED DEVELOPMENT TECHNOLOGIES

ONG Stichting Bakens Verzet (Une Autre Voie), 1018 AM Amsterdam, Pays Bas.

01. Cours e-learning : Diplôme de Développement Intégré (Dip. Dév.Int)

Édition 15: 27 Décembre, 2010

[Cette section se trouve toujours en phase de rédaction. Elle n’est pas par conséquence complète et comprend toujours des concepts en forme de notes préliminaires]

Valeur attribuée : 05 points sur 18

Travail prévu : 125 heures sur 504

Les points ne sont attribués qu’après le complètement réussi de l’examen consolidé pour la Section C : Le Modèle.

Bloc 8 : Les aspects économiques.

[Valeur 03 points sur 18]

[Travail prévu : 85 heures sur 504]

Les points ne sont attribués qu’après le complètement réussi de l’examen consolidé pour la Section C : Le Modèle.

Bloc 8 : Les aspects économiques.

Sect. 3 : L’analyse des coûts et des bénéfices. [17 heures]

01. Introduction. (02 heures)

02. Les investissements faits.(02 heures)

03. Les résultats détaillés. (02 heures)

04. Le cadre logique : L’efficience et l’efficacité. (02 heures)

05. Les frais de gestion.(02 heures)

06.Analyse des coûts et des bénéfices : introduction. (02 heures)

07. Analyse des coûts et des bénéfices : détails. (02 heures)

08. Traité de Kyoto : analyse des possibilités de financement. (Additionnel – file en anglais).

Section 3 rapport : 03 heures.

Sect. 3 : L’analyse des coûts et des bénéfices. [17 heures]

08. Traité de Kyoto : analyse des possibilités de financement. (Additionnel – file en anglais).

This analysis has ten sections:

SECTION 1. INTRODUCTION.

SECTION 2. POTENTIAL AREAS OF APPLICATION OF CDM MECHANISMS TO INTEGRATED DEVELOPMENT PROJECTS.

SECTION 3. SMALL SCALE CDM ACTIVITIES.

SECTION 4. PROGRAMMES OF ACTIVITIES.

SECTION 5. SELECTION OF THE CDM meTHODLOGIES FOR THE APPLICATIONS LISTED IN SECTION 2.

SECTION 6. INFORMATION SPECIFIC TO AFFORESTATION AND REFORESTATION (AR) METHODOLOGIES SPECIFICALLY APPLICABLE TO INTEGRATED DEVELOPMENT PROJECTS.

SECTION 7. NOTES SPECIFIC TO THE ROLE OF BAMBOO IN AFFORESTATION AND REFORESTATION PROJECTS.

SECTION 8. CDM FUNDING INDICATIONS FOR THE SELECTED METHODOLOGIES.

SECTION 4. GENERAL APPLICATION PROCEDURES.

SECTION 5. SOME MATERIAL SPECIFIC TO SMALL CDM COOK-STOVE INITIATIVES.

SECTION 1. INTRODUCTION.

Introduction.

A "certified emission reduction" or "CER" is a unit representing one ton of carbon dioxide-equivalent (CO₂-e) sequestered or abated, using global warming potentials defined by 2/CP.3. CERs are issued to project participants in CDM projects under Article 12 of the Kyoto Protocol and the CDM modalities and procedures (3/CMP.1, Annex, paragraph 1(b)).The value of CERs varies sharply over time. Prices on 14^th November 2010 were about € 14 per ton.

The main source for information on the Clean Development Mechanism (CDM) is the CDM website of the United Nations Framework Convention on Climate Change (UNFCC). Many will find the Rulebook : Clean Development Mechanisms Rules, Practices and Procedures developed by Baker and McKenzie for the www.cdmrulebook.org website easier to navigate. The Baker and McKenzie rulebook includes an A-Z index of key words which is easy to consult. The www.cdmrulebook.org site is not, however, complete. For instance, it says what a Designated Operational Entity (DOE) is, but does not provide a list of approved DOEs. The list of DOEs can instead be found at the UNFCCC site. There are currently 48 of them. Most of them are based in industrialised countries, though there are some in “emerging” countries too. Designated Operational Entities (DOEs) intermediate between the people proposing a project and the CDM Executive Board which approves it. They evaluate and validate initial project applications and carry out periodic inspection and certification activities ensuring on-going compliance. Most of these DOEs are large international institutions which in practice are given (hold) a virtual licence to complicate or facilitate procedures. Project proponents are placed at their mercy. Furthermore, if the issuing organ (in the case of CDM projects, the Executive Board) makes an arbitrary decision either with regard to registration or to issuance of certificates, applicants have no remedy. In December 2010 there was still no CDM appellate body to handle appeals against the decisions of the CDM Executive Board. A preliminary discussion on this issue took place during the UNFCCC meeting in Cancun (Mexico), December 2010.

Recently introduced Programmes of Activities (PoA) appear to offer greater potential for CDM financing of integrated development projects in developing countries. A programme of activities defines parameters for CDM activities to be included in the programme. It is a sort of convention. Once registered by the CDM Executive Board, the PoA applies to activities brought under it from time to time without the need for project by project applications. For more information refer to : Beaurain F., Schmidt-Traub G, Developing CDM Programmes of Activities : A Guidebook, South Pole Carbon Asset Management Ltd, Zurich, 2010. “As of November 2010, after EB meeting 57, a total of 54 PoAs were under validation and 5 were registered.”(Beaurain, op.cit. p. 17)

Click here to see how this might work on a sub-continental scale in developing countries. In the example, a sub-regional authority is the “owner” of the Programme of Activities which form an integrated part of its development policy. The programme is run by a consortium of leading NGOs represented throughout the sub-region. This consortium is responsible for the operation of the programme and for the sale of CER emission certificates. On behalf of the project owner it collects CER emission funds and distributes them to the cooperative responsible for each individual project. Its activities are controlled and audited by a DOE (Designated Operating Entity) which acts on behalf of the CDM Executive Board (EB).

Limitations of Clean Development Mechanism (CDM) applications under the Kyoto Protocol.

CDM projects are used to replace or improve on current energy consumption. If there is no current energy consumption it cannot be replaced or reduced. This means that industrialised countries currently using 50 times more energy per inhabitant are offered much better opportunities under the protocol than least developed countries where very little energy is used. There is for the time being no practical limit to the amount of energy savings possible from the introduction of alternative energy sources in industrialised and even larger emerging countries. In contrast, the introduction of solar home systems in least developed countries is covered under the Kyoto Protocol only for the replacement of, for example, a few kerosene lamps and batteries. This means the entire CDM mechanism is (deliberately) biased to the advantage of the industrialised countries, though it is unlikely this will ever be openly admitted.

The use of the Kyoto protocol as a potential source for the funding of integrated development projects was foreseen in the Model for Integrated Development from the moment the Model was first formulated. Lip service to the possibility of financing small-scale CO2 projects in developing countries under the Kyoto protocol was finally raised at official level after several years of operation of the Protocol. Basic indications for official small-scale methodologies for cook-stove emissions reductions were, for instance, introduced at the end of 2009. Since the first commitment period of the Protocol is to expire in 2012 and the preparation of project submissions and their approval usually takes two years, it can be assumed that the extension to coverage of small-scale projects such as cook-stove projects was intended to show late and half-hearted “goodwill” towards projects benefiting the world’s poor while at the same time making sure the use of the Protocol for this purpose before the close of the commitment period would be limited. Methods of application still had to be “developed”. Monitoring was made so complex as to be virtually impossible to carry out at all. The compliance costs and costs of monitoring were set so high in proportion to the value of the CO2 savings that the number of applications to the CDM executive board would in any case be extremely limited. The complexity of bundling of small scale projects within the framework of single CDM applications procedures appears to be such that the only players to profit from the initiative are the international consultants paid to propose rules for them. As for Programmes of Activity (PoA), “As of November 2010, after EB meeting 57, a total of 54 PoAs were under validation and 5 were registered.”(Beaurain and Schmidt-Traub, op.cit. p. 17).

The CDM system is business- rather than development-oriented. With the exception of sectors 14 and 15, it is not clear how projects for the improvement of the quality of life of the poor in developing countries are intended to fit into it. The industrial bias built into the 15 nominated sectors speaks for itself :

01. Energy industries.

02. Energy distribution.

03. Energy demand.

04. Manufacturing industries.

05. Chemical industries.

06. Construction.

07. Transport.

08. Mining/mineral production.

09. Metal production.

10. Fugitive emissions from fuels (solid, oil, and gas).

11. Fugitive emissions from production and consumption of halocarbons and sulphur hexafluoride.

12. Solvent use.

13. Waste handling and disposal.

14. Afforestation and reforestation.

15. Agriculture.

The CDM system is also fraud-sensitive :

“[Europol states that] Carbon credit carousel fraud in the EU ETS resulted in losses of about 5 billion Euros in 2008-2009 and is estimated to account for 90% of carbon trading volume in some countries.” (Silverstein D., A method to finance a global climate fund with a harmonized carbon tax”, Munich University, MPRA paper 27121, 03 December, 2010. )

One theoretical advantage for projects in the least developed countries (LDCs) (according to their status on the date of the publication of the request for issuance) is that LDCs were exempted from the payment of registration and adaptation fees at the third meeting of the Conference of the Parties (COP) (2/CMP.3 par. 31) . Many of those countries have not been involved in CDM projects under the Kyoto Protocol at all. Other compliance and monitoring costs are still, however, payable.

SECTION 2. POTential areas of application of CDM mechanisms under the Kyoto Protocol to integrated development projects.

CDM applications under the Kyoto Protocol are organised by sector and sub-type or purpose. The 15 sectors are listed in section 1 above. Since integrated development projects involve a wide range of services and activities, CDM applications can in principle be made under several sectors and for several purposes, provided doubling-up of benefits is carefully avoided. CDM applications apply only to the replacement or improvement of existing energy use and conservation measures which increase carbon sinks. The known long-standing degradation of forested areas in most developing countries offers prospects for afforestation and reforestation projects there. These activities may take place in forests and natural reserves, built-up areas, grass- and croplands, wetlands, marginal lands, and areas unable to support bio-mass. These possibilities are included in items 02, 03, 04, 05, 06 and 07 below. Provided sufficient water is available (integrated development projects to not cover irrigation projects), afforestation and reforestation activities in a given integrated development project area may take place in any one or any combination of the described land-use types.

Most integrated development projects are likely to involve at least some of the following applications, listed in their likely order of importance:

01. (Small scale) CO2 savings through the reduced use of biomass for cooking purposes through the introduction of improved stoves. (Sector 3. Energy demand ?)

02. (Small scale) afforestation and/or reforestation projects. Recovery of forest lands and natural parks and reserves using traditional species and/or bamboo and/or other species. (Sector 14 - Afforestation and reforestation.)

03. (Small scale) afforestation and/or reforestation projects. Afforestation activities in settlements as defined Distributed planting of fruit and nut trees and similar. (Sector 14 - Afforestation and reforestation.)

04. (Small scale) afforestation and/or reforestation projects. Small-scale agro-forestry activities – distributed bamboo plantations, palms, soap-nuts and jatropha on grasslands and croplands. (Sector 14 - Afforestation and reforestation.)

05. (Small scale) afforestation and/or reforestation projects. Small-scale agro-forestry activities – distributed plantations for practical purposes for local use, including but not limited to bamboo, palms, soap-nuts and jatropha. (Sector 14. (Small scale) afforestation and reforestation.) on marginal lands.

06. (Small scale) afforestation and/or reforestation projects on wetlands using traditional species. (Sector 14 - Afforestation and reforestation.)

07. (Small scale) afforestation and/or reforestation projects on lands having low inherent potential to support living biomass. (Sector 14 - Afforestation and reforestation.)

08. (Small scale) use of renewable biomass instead of non-renewable biomass with improved cook stoves. (Sector 1. Energy industries ?)

09. (Small scale) recycling of human waste to avoid the use of industrial fertilisers. (Sector 13. Waste handling and disposal ?)

10. (Small-scale) methane recovery from animal waste for cooking and lighting purposes in pastoralist areas. (Sector 13 – Waste handling and disposal ?)

11. (Small scale) replacement of kerosene lamps incandescent light bulbs and of the use of throw-away batteries by renewable energy sources (wind, solar and/or renewable bio-mass including but not limited to plant oil, gasification of biomass). (Sector 3. Energy demand ?)

12. (Small-scale) replacement of non-renewable electrical and diesel-driven sources for mechanical equipment such as pumps and mills and, where applicable, pubic lighting systems. (Sector 1- 01. Energy industries ?)

13. (Small scale) local recycling and recovery of materials from solid wastes, including but not limited to plastics. (Sector 13. Waste handling and disposal ?)

Different methodologies are used for different sectors and purposes. Each methodology is unique to the sector it is listed under. Click here to see which methodologies are linked with which sectors. Since an activity may fall under any one of several sectors, there may be more than one methodology which can be applied to it.

Integrated development projects involve many sectors and purposes. The choice of sector and of the most suitable methodologies within the sector is complex. In some cases an application for the approval of a new combination system might turn out to be the best option as new methodologies can also be submitted to the CDM Executive Board for approval. The CDM methodologies currently available are described in the CDM Methodology Booklet issued by the United Nations Framework Convention on Climate Change (UNFCC), Bonn, November , 2010. Many of them could be applied to integrated development projects. The United Nations Environment Program (UNEP) has recently issued a Tool for Selecting CDM Methodologies and Technologies (United Nations Environment Programme (UNEP) Risø Centre CD4CDM, Roskilde, November 2010). The tool does not split methodologies for sub-types sector by sector. It is also incomplete. Only six of the thirteen preferred methodologies listed below are included in the Tool for Selecting CDM Methodologies and Technologies. Surprisingly, with the exception of AMS-III-AJ they were all available at the time the tool was published. In the following texts, suggestion in the tool are introduced by the words : “Possible tool indication :”.

SECTION 3. SMALL SCALE CDM ACTIVITIES.

Small-scale CDM project activities.

Small-scale CDM project activities are classed in three groups:

I : Renewable project activities with maximum output capacity up to 15 MW or equivalent.

II : Energy efficiency improvements which reduce energy consumption involving emissions of up to 60 gigawatt hours per year.

III: Other activities reducing emissions which directly emit less than 60 kilotonnes of CO2, with savings up to 15 kilotonnes of CO2. Calculation procedures for group III projects have been simplified.

Individual small-scale activities under integrated development projects may fall under all three groups or any combination of them. Common sense would indicate that where possible they be included under group III where procedures are simplified. The fact that more small-scale activities so have taken place under groups I and II than under group III may be linked to the history of the development of the CDM mechanism and the relatively recent introduction of simplified procedures. For instance, there is still no specific simplified group III methodology for bio-mass briquettes ( covered under methodology AMS-I-E below) and the use of improved stoves (see AMS-II-G), except for methodologies AMS-III-D, AMS-III-F, and AMS-III-R which are all related to the capture of methane gas.

Type III small-scale methodologies have been selected in Section 4 below wherever practicable.

Advantages of registration as small-scale projects.

The advantages of small-scale projects are that they :

- Can be bundled (several projects presented as one) using the form for submission of bundled small-scale project activities (CDM-SSC-Bundle).

- Use the “simplified” CDM-SSC-PDD (version 03 – 22 December 2006) project design document. A guideline for the drafting of this document is available.

- Use “simplified” baseline methodologies.

- New baseline methodologies can be also submitted following the “simplified” monitoring plans for:

a) the collection and archiving of data needed to estimate or measure anthropogenic emissions by sources of greenhouse gases occurring within the project boundary during the crediting period as specified in appendix B for the relevant project category;

b) the determination of the baseline of anthropogenic emissions by sources of greenhouse gases occurring within the project boundary during the crediting period, as specified in appendix B for the relevant project category;

c) the calculation of the reductions of anthropogenic emissions by sources by the proposed small-scale CDM project activity, and for leakage effects, in accordance with provisions of appendix B for the relevant project category (4/CMP.1, Annex II, paragraph 32).

- Use the same designated operational entity (DOE) for initial validation, and for subsequent verification and certification. For large-scale projects two different DOEs are needed.

Despite these advantages, the complexity of the preparation and management of small-scale CDM projects means they too are time-consuming and expensive and need well-qualified personnel. Initial investment costs and on-going compliance costs always need to be carefully weighed against the potential financial benefits. It may take two years, or even more, for project approval and several more years before CER certificates are actually made available for trading. This means that the high set-up costs have to be paid in advance without any guarantee the application will be accepted.

SECTION 4. PROGRAMMES OF ACTIVITIES.

Click here to see a drawing showing how this might work on a sub-continental scale in developing countries. In the example, a sub-regional authority is the “owner” of the Programme of Activities which form an integrated part of its regional development policy. The programme is run by a consortium of leading NGOs represented throughout the sub-region. This consortium is responsible for the operation of the programme and for the sale of CER emission certificates. On behalf of the project owner it collects CER emission funds and distributes them to the cooperatives responsible for each individual project. Its activities are controlled and audited by a DOE (Designated Operating Entity) which acts on behalf of the CDM Executive Board (EB).

SECTION 5. SELECTION OF THE CDM meTHODLOGIES FOR THE APPLICATIONS LISTED IN SECTION 2.

01. CO2 savings through the reduced use of non-renewable biomass for cooking purposes through the introduction of improved stoves.

CO2 savings through the reduced use of non-renewable biomass for cooking purposes through the introduction of improved stoves. ( Application 01 : Sector 3. Energy demand ? Possible tool indication : Power Consumption, sublevel “Various household installations”, sub-type “Stoves”, small-scale applications, methodologies AMS-II-G.(Version 2) or AMS-I-C. Of these, AMS-II-G.(Version 2 ) is compatible with Sector 3. AMS-I-C is compatible with sector 1 – energy industries) AMS-I-C refers to electricity generation and may therefore be excluded. AMS-II-G refers to energy efficient measures in thermal applications of biomass. So the preferred methodology appears to be AMS-II-G.(Version 2). This application my be supplemented by application 08 below. Doubling up with application 08 should be carefully avoided. A CDM application in 2009 on biomass residues as the fuel source for individual stoves complete with proposed new base-line and monitoring methodologies relates to an actual project in China. The documents cited are the actual project texts. They could be used as a basis for drafting small-scale cook-stove projects for integrated development projects once the methodology has been approved by the Executive Board.

02. Recovery of forest lands and natural parks and reserves using traditional species and/or bamboo and/or other species.

(Application 02. Sector 14 - Afforestation and reforestation.) The preferred methodology is AR-AMS-0004 , version 2, 11 June, 2009 - Approved simplified baseline and monitoring methodology for small-scale agroforestry - afforestation and reforestation project activities under the clean development mechanism. It would be used for forest recovery (afforestation or reforestation) with preferably with trees natural to each project area. Bamboo and/or other plantations may also be cultivated. This methodology is not included in the Tool for Selecting CDM Methodologies and Technologies.

The prescribed parameters are:

“(a) Project activities are not implemented on grasslands;

“(b) Project activities lead to establishment of forest (according to area, height and crown cover thresholds reported to the EB by the host Party) and allow for continuation or introduction of a cropping regime;

“(c) The pre-project crown cover of trees within the project boundary is less than 20% of the threshold for crown cover reported to the EB by the host Party;

“(d) If there is a decrease in the area cultivated with crops attributable to implementation of the project activity then the decrease is not more than 20% of the total area cultivated with crops at the start of the project.”

03. Afforestation activities in settlements as defined Distributed planting of fruit and nut trees and similar.

Afforestation in settlements as defined in 2006 IPCC Guidelines for National Greenhouse Gas Inventories, and Good Practice Guidance for Land Use, Land-Use Change and Forestry (IPCC 2003), may include all developed land i.e., residential, transportation, commercial, and production (commercial, manufacturing)infrastructure of any size, unless it is already included under other land-use categories. The small-scale methodology AR-AMS-2 (version 2, 17 October 2008) falls under sector 14 “Afforestation and reforestation” but is not included in the Tool for Selecting CDM Methodologies and Technologies.

The prescribed parameters are:

“(a) Project activities are implemented on settlements. Specifically the following lands fall under the settlement category:

(i) Transportation infrastructure: Land strips along streets, country roads, highways, railways, waterways, overhead power cables, gas pipelines, provided such land is functionally or administratively associated with the transportation infrastructure and is not accounted for in another land-use category;

(ii) Human settlements: Residential and commercial lawns (rural and urban), gardens, golf courses, athletic fields, parks, provided such land is functionally or administratively associated with particular cities, villages or other settlement types and is not accounted for in another land-use category.

“(b) Project activities are implemented on lands where areas used for agricultural activities within the project boundary, and displaced due to the project activity, are less than 50 per cent of the total project area;

“(c) Project activities are implemented on lands where ≤ 10% of the total surface project area is disturbed as result of soil preparation for planting. “

04. Small-scale agro-forestry activities – such as distributed bamboo plantations, palms, soap-nuts and jatropha on grasslands and croplands.

Afforestation and/or reforestation projects. Small-scale agro-forestry activities including but not limited to distributed bamboo, palm, soap-nut, and jatropha plantations on grasslands and croplands. (Sector 14 - Afforestation and reforestation. Methodology AR-AMS-0001 “Simplified baseline and monitoring methodologies for small-scale A/R CDM project activities implemented on grasslands or croplands with limited displacement of pre-project activities.” Possible tool indication : (Sector 14 – Afforestation and Reforestation - sublevel forests - sub-type either afforestation or reforestation.

The applicable parameters are :

“(a) Project activities are implemented on grasslands or croplands;

“(b) Project activities are implemented on lands where the area of the cropland within the project boundary displaced due to the project activity is less than 50 per cent of the total project area;

“(c) Project activities are implemented on lands where the number of displaced grazing animals is less than 50 per cent of the average grazing capacity of the project area;

“(d) Project activities are implemented on lands where ≤ 10% of the total surface project area is disturbed as result of soil preparation for planting.”

05 Small-scale agro-forestry activities – distributed plantations for practical purposes for local use, including but not limited to bamboo, palms, soap-nuts and jatropha on marginal lands.

Afforestation and/or reforestation projects. Small-scale agro-forestry activities on marginal lands – distributed plantations for practical purposes for local use, including but not limited to bamboo, palms, soap-nuts and jatropha. (Sector 14 - Afforestation and reforestation.). The preferred methodology is AR-AMS-0004 , version 2, 11 June, 2009 – which is intended for forest recovery (afforestation or reforestation) including but not limited to traditional trees and/or bamboo This methodology is not included in the Tool for Selecting CDM Methodologies and Technologies.

The prescribed parameters are:

“(a) Project activities are not implemented on grasslands;

“(c) The pre-project crown cover of trees within the project boundary is less than 20% of the threshold for crown cover reported to the EB by the host Party;

06. Afforestation and/or reforestation projects on wetlands using traditional species.

Afforestation and/or reforestation projects on wetlands. (Sector 14 - Afforestation and reforestation.) AR AMS-003, Version 1, 14 December 2007. Simplified baseline and monitoring methodology for small scale CDM afforestation and reforestation project activities implemented on wetlands. Possible tool indication : (Sector 14 – Afforestation and Reforestation-sublevel forests, sub-type mangroves. Applications will apply to mangroves in mangrove swamps. Other traditional species will be used according to the bio-spheres involves.

07 Afforestation and/or reforestation projects on lands having low inherent potential to support living biomass.

Afforestation and/or reforestation projects on lands having low inherent potential to support living biomass. (Sector 14 - Afforestation and reforestation). AR-AMS-0005 (Version 2, 8 April 2009) falls under sector 14 “Afforestation and/or reforestation” but is not included in the Tool for Selecting CDM Methodologies and Technologies. This methodology can be used as foreseen in applications 4, 5, 6, and 7 where project activities are implemented on areas having low inherent potential to support living biomass without human intervention.

The project activities shall be implemented on areas listed in (i) to (iv) below. The project participants (PPs) shall provide evidence/data to support that the selected project sites meet the local/national criteria for these categories using information from verifiable sources and/or expert opinion as appropriate:

(i) Sand dunes;

(ii) Bare lands;

(iii) Contaminated or mine spoils lands;

(iv) Highly alkaline or saline soils.

08. Use of renewable biomass instead of non-renewable biomass with improved cook stoves.

Use of renewable biomass instead of non-renewable biomass with improved cook stoves. (Application 3. Sector 1. Energy industries? Possible tool indication : “Waste”, sublevel “Biomass”, sub-type “Biomass briquettes”, small-scale applications, methodologies AMS-I-C or AMS-III-B.) The more common application of the two methodologies is AMS-I-C. Both methodologies are compatible with Sector 1). AMS-I-C refers to thermal energy using renewable energy sources instead of fossil based ones. AMS-III-B refers to switching of fossil fuels. Neither of these appears applicable to integrated development projects. Methodology AMS-I-E (which falls under the sub-type “manure”) refers to a switch from non-renewable biomass to renewable biomass for thermal applications by the user. Integrated development projects provide for the local production of mini-briquettes made from renewable biomass wastes and residues supplemented as necessary by purpose-grown renewable crops, rather than to manure. So the most appropriate technology appears to be Sector 1. Energy industries ? Possible tool indication : “Renewable Energy”, sublevel “Biomass”, sub-type “Manure”, small-scale applications, methodology AMS-I-E, using renewable bio-mass instead of manure. This application supplements application 01 above. Assuming 65% of non-renewable biomass is saved under application 1 above, the remaining 35% of biomass incorporated in the locally produced mini-briquettes under application 08 must be renewable and it must be proved that the remaining 35% of biomass being substituted by the mini-briquettes is non-renewable.

09. Recycling of human waste to avoid the use of industrial fertilisers.

(Application 09. Sector 13. Waste handling and disposal ? Possible tool indication : “Waste”, sublevel “Liquid waste”, sub-type “Waste water”, small-scale applications, methodologies AMS-III-I, or AMS-III-H, or AMS-III-F, or AMS III-D, or AMS-I-F, or AMS-I-D, or AMS-I-C, or AMS-I-A. Of these the most common applications in descending order are AMS-III-H, AMS-I-D, and AMS-I-C. Methodologies AMS-I-A, AMS-I-C, AMS-I-D and AMS-I-F are all compatible with sector 1, energy industries). Methodology AMS-III-D is compatible with Sector 15 (Agriculture). Methodologies AMS-III-I, AMS-III-H, and AMS-III-F are all compatible with sector 13 - waste handling. Of these, AMS-III-I refers to substitution of anaerobic systems with aerobic ones. AMS-III-H refers to methane recovery in wastewater treatment. Application 09 does not refer to methane recovery (AMS-III-H), nor does it refer to the “substitution of an anaerobic system”. AMS-III-F on the other hand refers to controlled biological treatment of organic matter by aerobic composting of the biomass and proper soil application of the compost. The faecal component of human waste is composted aerobically then applied as proper soil as provided in AMS-III-F. The urine component of human waste is mixed with grey water to form liquid fertiliser comprising 1 part of urine to 10 parts of grey water and applied directly for food production purposes. Imported industrial fertiliser is thereby substituted by locally produced liquid fertiliser, which would otherwise have been wasted. The Tool for Selecting CDM Methodologies and Technologies therefore appears to indicate AMS-III-F as the best solution. However, AMS-III-Y seems to be more appropriate. Although the second version of methodology AMS-III-Y dates back to 30^th October 2009, it has not been included in the Tool for Selecting CDM Methodologies and Technologies.

Without referring to methodology AMS-III-F, the CDM Methodology Booklet actually provides a guideline in its description of AMS-III-Y as follows :

“1. This methodology comprises technologies and measures that avoid or reduce methane production from anaerobic wastewater treatment systems and anaerobic manure management systems, through removal of (volatile) solids from the wastewater or manure slurry stream. The separated solids shall be further treated, used or disposed in a manner resulting in lower methane emissions.

“2. The project activity does not recover and combust biogas i.e., the baseline wastewater or manure treatment plant as well as the project system are not equipped with methane recovery. Project activities which recover and combust biogas from manure management systems shall consider AMS-III.D or AMS-III.R. Project activities which recover and combust biogas from wastewater treatment systems shall consider AMS-III.H. Project activities that substitute anaerobic wastewater treatment systems with aerobic wastewater treatment system shall consider AMS-III.I.

“3. The technology for solids separation shall be one of the below or a combination thereof so as to achieve a minimum dry matter content of separated solids larger than 20%:

(a) A pre-separation phase of chemical treatment by mixing flocculants with the wastewater, adopted to improve the efficiency of the subsequent mechanical solid liquid separation process;

(b) Mechanical solid/liquid separation technologies (e.g., stationary, vibrating or rotating screens, centrifuges, hydrocyclones, press systems/screws), operated inline with the inflowing freshly generated wastewater or slurry manure stream so as to avoid stagnation;

(c) Thermal treatment technologies that evaporate water content from the waste stream, either releasing vapour to the atmosphere or condensing it into a liquid fraction (condensate) containing negligible volatile solids or COD load, resulting in a solid fraction. Examples include evaporation and spray drying technologies.”

The technical solution applied in integrated development projects is b) mechanical solid/liquid separation through the use of urine diversion in toilets.

10. Methane recovery from animal waste for cooking and lighting purposes in pastoralist areas.

Small-scale methane recovery from animal waste for lighting purposes and electricity generation in pastoralist areas. The resultant energy from this application can also be used for cooking purposes under : Sector 3. Energy demand ? Possible tool indication : Power Consumption, sublevel “Various household installations”, sub-type “Stoves”, small-scale applications, methodology AMS-II-G as provided in application 01 above. Doubling-up will cause loss of income to project beneficiaries. Common sense therefore suggests that energy from the application be used for lighting purposes and/or for small scale electricity generation. If it is used for lighting purposes, it can be brought under (Sector 1 - Energy industries ? Possible tool indication : Power Consumption, sublevel “Various household installations”, sub-type “Lighting”, small-scale applications, methodologies AMS-II-J or AMS-II-C or AMS-I-A or the new methodology AMS-III-AR). AMS-II-C refers to adoption of energy-efficient appliances. AMS-II-J applies specifically to the adoption of compact fluorescent lamps. AMS-I-A refers to small-scale stand-alone or mini-grid electricity generation by the user with installed capacity up to 15MW with emissions reductions per renewable energy based lighting system is less than 5 tonnes of CO2 equivalent a year and where it can be shown that fossil fuel would have been used in the absence of the project activity. The new methodology AMS-III-AR (from 26^th November 2010) applies to the adoption of LED lamps. It refers to the lighting technology itself, and would be included under application 11 below. AMS-I-A can be used for the rest of the methane produced in application 11 to substitute other existing electricity/power generation activities. The challenge is to find alternative existing uses of non-renewable energy within each integrated development area. Beneficiaries may also choose to use the gas for new energy uses, but this would not qualify for CDM funding. They may prefer to use their methane gas to replace the mini-briquettes for stoves under application 01 above. As already stated, this would, however, lead to a drainage of CDM resources.

11. Replacement of kerosene lamps, incandescent light bulbs, and of the use of throw-away batteries by renewable energy sources (wind, solar and/or renewable bio-mass including but not limited to plant oil, gasification of biomass).

Replacement of kerosene lamps and of the use of throw-away batteries by renewable energy sources (wind, solar and/or renewable bio-mass including but not limited to plant oil, gasification of biomass). (Sector 3 - Energy demand ? Possible tool indication : Power Consumption, sublevel “Various household installations”, sub-type “Lighting”, small-scale applications, methodologies AMS-II-J or AMS-II-C or AMS-I-A. AMS-I-A is compatible with sector 1 (energy industries). AMS-I-A refers to small-scale stand-alone or mini-grid electricity generation by the user with installed capacity up to 15MW with emissions reductions per renewable energy based lighting system is less than 5 tonnes of CO2 equivalent a year and where it can be shown that fossil fuel would have been used in the absence of the project activity. Methodologies AMS-II-C and AMS-II-J both conform to Sector 3. AMS-II-C refers to adoption of energy-efficient appliances. AMS-II-J applies specifically to the adoption of compact fluorescent lamps. However it is a new methodology, AMS-III-AR (introduced 26^th November, 2010, which applies to the adoption of LED lamps, which appears to offer the best solution. It is not included in the Tool for Selecting CDM Methodologies and Technologies. Methodologies AMS-II-C, AMS-II-J, and AMS-III-AR are all coupled to energy savings inherent in the introduction of lighting technology, not to the source of energy. The highest energy savings with the greatest flexibility of use are given by the adoption of LED lights, so AMS-III-R appears to be the preferred methodology. The substantially higher initial investment cost of the lamps is directly recovered by the reduction in the size of the alternative energy power source installed.

12. Replacement of non-renewable electrical and diesel-driven sources for mechanical equipment such as pumps and mills and, where applicable, pubic lighting systems.

Replacement of non-renewable electrical and diesel-driven sources for mechanical equipment such as pumps and mills and, where applicable, pubic lighting systems. (Sector 1, Energy industries ? Possible tool indication : “Renewable Energy”, sublevel “Solar”, subtype “Solar PV”, small-scale applications, AMS-I-D or AMS-I-A; or sublevel “Wind”, subtype “Wind”, small-scale applications, AMS-I-F, or AMS-I-D or AMS-I-A. All three methodologies are compatible with Sector 1). By far the most common methodology of the three, AMS-I-D, applies only to alternative energy supply to a regional or national grid and is therefore not usually applicable in integrated development projects. AMS-I-F refers to substitution of electricity from a national or regional grid, from a fossil-fuelled captive power plant or from a carbon intensive mini-grid. AMS-I-A refers to small-scale stand-alone or mini-grid electricity generation by the user.

Methodology AMS-I-A is described in the CDM Methodology Booklet as follows :

“This category comprises renewable electricity generation units that supply individual households/users or groups of households/users included in the project boundary. The applicability is limited to individual households and users that do not have a grid connection except when;

“(a) A group of households or users are supplied electricity through a standalone minigrid powered by renewable energy generation unit(s) where the capacity of the generating units does not exceed 15 MW (i.e., the sum of installed capacities of all renewable energy generators connected to the mini-grid is less than 15 MW) e.g., a community based stand-alone off-the-grid renewable electricity systems; or

“(b) The emissions reduction per renewable energy based lighting system is less than 5 tonnes of CO2e a year and where it can be shown that fossil fuel would have been used in the absence of the project activity by;

(i) A representative sample survey (90% confidence interval, ±10% error margin) of target households; or

(ii) Official statistics from the host country government agencies.

“The renewable energy generation units include technologies such as solar, hydro, wind, biomass gasification and other technologies that produce electricity all of which is used on-site/locally by the user, e.g., solar home systems, wind battery chargers . The renewable generating units may be new installations (Greenfield) or replace existing onsite fossil-fuel-fired generation. To qualify as a small-scale project, the total output of the unit(s) shall not exceed the limit of 15 MW.”

Since AMS-I-A has already been used for applications relating to both wind and solar energy and to biomass applications for electricity generation including but not limited to palm oil and manures, this appears to be the most flexible methodology for application 12.

13. Local recycling and recovery of materials from solid wastes, including but not limited to plastics.

Small scale local recycling and recovery of materials from solid wastes, including but not limited to plastics, is a feature of integrated development projects. Recovery and recycling of plastics materials is covered under methodology AMS-III-AJ. This methodology is not included in the Tool for Selecting CDM Methodologies and Technologies. It comprises activities for recovery and recycling of high density polyethylene (HDPE) and low density polyethylene(LDPE) materials in municipal solid wastes to process them into intermediate or finished products e.g., plastic resin to displace production of virgin HDPE and LDPE materials in dedicated facilities thereby resulting energy savings and emission reduction. Mechanical Recycling: Physical/mechanical processes are defined as those by which recyclable materials e.g., HDPE and LDPE plastics are obtained from municipal solid waste by way of separation, cleaning and compaction/packing for further processing in order to produce intermediate/finished products to substitute virgin raw materials in an industrial production chain. The process may be accomplished manually and/or using mechanical equipment including but not limited to one or more of the following measures: washing of the separated LDPE and HDPE materials with hot water, drying, compaction, shredding and pelletizing. Recycling facility is (are) facility (ies) where the recyclables in the municipal solid waste collected are sorted, classified and prepared into marketable commodities for processing/manufacturing in single or multiple locations. The term Processing/Manufacturing facility includes industrial processes to transform recyclable materials obtained from recycling facility into intermediate or finished products e.g., plastic resin.

Methodology AMS-III-X relates to the recovery of HFCs (hydrofluorocarbons) from the recycling of refrigerators. Until now, AMS-III-AJ is the only other methodology covering energy savings through the recycling of non-organic solid waste products.

SECTION 6. INFORMATION SPECIFIC TO AFFORESTATION AND REFORESTATION (AR) METHODOLOGIES SPECIFICALLY APPLICABLE TO INTEGRATED DEVELOPMENT PROJECTS.

A general reference.

A good up-to-date reference to Afforestation and Reforestation (AR) projects is Building Forest Carbon Projects : A Step-by-Step Guide, by J.Olander and J.Ebeling, published by Forest-Trends and the Katoomba Group, December 2010. This work includes specific aspect by aspect information boxes with references to the leading resources on the aspect in question.

Key factors which should always be borne in mind are that project areas must be under the control of the project proponent(s) and that a given dimension of at least 10.000 to 20.000 tonnes of CO2 per year is needed to offset the high costs of project preparation, validation, and monitoring. Pre-implementation costs can be € 100.000-250.000 and more; preparation of a methodology for € 20.000-75.000 and more; each periodic verification event between € 15.000-40.000 and more. Most of these funds are absorbed by nominated DOEs (auditors) and large international (especially financial) institutions which in practice hold a virtual licence to complicate or facilitate procedures. Project proponents are placed at their mercy. If the issuing organ (in the case of CDM projects, the Executive Board) makes an arbitrary decision either with regard to registration or to issuance of certificates, project proponents have no remedy. In December 2010 there was still no CDM appellate body to handle appeals against the decisions of the CDM Executive Board. A preliminary discussion on this issue took place during the UNFCCC meeting in Cancun (Mexico), December 2010.

Some definitions.

Each host country must have adopted its own threshhold parameters for forest coverage. If it has not done so, and some countries have not, it is not possible to apply for CDM funding for an AR project there.

Some important definitions (source : Decision -/CMP.1 Land use, land-use change and forestry ) for afforestation and reforestation projects are:

(a) “Forest” is a minimum area of land of 0.05–1.0 hectare with tree crown cover (or equivalent stocking level) of more than 10–30 per cent with trees with the potential to reach a minimum height of 2–5 metres at maturity in situ. A forest may consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground or open forest. Young natural stands and all plantations which have yet to reach a crown density of 10–30 per cent or tree height of 2–5 metres are included under forest, as are areas normally forming part of the forest area which are temporarily unstocked as a result of human intervention such as harvesting or natural causes but which are expected to revert to forest. Before a country can host a CDM AR project, its Designated National Authority (DNA) must have approved its own definition of forest within the parameters indicated in the foregoing definition. Countries may also change their definition if required. It is important that the country definitions be extended to cover woody grasses, such as palm trees and bamboo, which can play an important role as carbon sinks. [Yiping L. Yanxia L. et al, Bamboo and Climate Change Mitigation, International Network for Bamboo and Rattan (INBAR), Beijing, 2010 ]. “ ….until a DNA provides clarification that the definition of forest as reported by them to the Board includes palm (trees) and/or bamboos it shall be deemed that the definition does not include palms (trees) and bamboos” [Report of the 27^th meeting of the afforestation and reforestation working group, UNFCCC Headquarters, Bonn, Germany 17.19 February 2010.]. Carbon sequestration in agricultural crops and soils is not eligible for sale under the CDM in the first commitment period (CP) 2008-2012. This is a handicap for bamboo, two-thirds of the carbon sequestration of which is underground.

(b) “Afforestation” is the direct human-induced conversion of land that has not been forested for a period of at least 50 years to forested land through planting, seeding and/or the human-induced promotion of natural seed sources

(c) “Reforestation” is the direct human-induced conversion of non-forested land to forested land through planting, seeding and/or the human-induced promotion of natural seed sources, on land that was forested but that has been converted to non-forested land. For the first commitment period, reforestation activities will be limited to reforestation occurring on those lands that did not contain forest on 31 December 1989

For the CDM mechanism, land degradation is defined as a long-term decline in ecosystem function and productivity and measured in terms of net primary productivity. All forms of land degradation will ultimately lead to a reduction of soil fertility and productivity. The general effect is reduced plant growth, which in turn causes loss of protective soil cover and increased vulnerability of soil and vegetation to further degradation (e.g. erosion).

The importance of afforestation and reforestation in integrated development.

Afforestion and reforestation activities are potentially very interesting for integrated development projects. Many developing countries have vast areas of marginal lands. The level of on-going degradation of existing woodlands is appalling nearly everywhere. The main cause of this is the ruthless exploitation (theft) of the existing timber resources of developing countries for the benefit of large private commercial industrial interests. (See Block 1 of , Section 1 of the course : 08. In depth : Financial leakage : theft of resources. ) A second cause is degradation through non-sustainable use of woodlands for cooking fuel and charcoal production.

Greenhouse gas emissions calculations for afforestation and reforestation projects are particularly complex. Some of these projects have been highly criticised in international circles. (Silverstein D., A method to finance a global climate fund with a harmonized carbon tax”, Munich University, MPRA paper 27121, 03 December, 2010. )

Biomass default tables are given in annex 3A.1 of the Good Practice Guidance for Land Use, Land-use Change and Forestry, published by the Institute for Global Environmental Strategies (IGES) for the Intergovernmental Panel on Climate Change (IPCC), Kamiyamaguchi, 2003.

Risks.

Long-term and permanent certified emission reductions (ICER) and (CER) for afforestation and reforestation projects are more vulnerable than those for other CDM sectors. Natural disasters such as fire or floods may wipe out many years of investment in a few hours. Where this happens, CDM funds received during the build-up of the carbon sinks have to be repaid, because the carbon sinks have been lost. This risk is in principle insurable, but the cost of insurance is very high and represents financial leakage from the integrated development area where the AR project is situated. Regional level project owners ( for instance UEMOA in West Africa) may be in a position to supply guarantees of coverage against these risks. This problem is not an issue with temporary or short-term credits (tCER) which, however, are valid only for credit period during which they are issued. That is why short-term credits command much lower prices.

Flowering of bamboo plants should be avoided. Like other grasses, flowering may lead to the end of the life cycle of some bamboo species and may lead to death of the plant and loss of the sequestered carbon. However the average flowering interval of bamboo is in the region of 30 years.

Grazing in plantations is another risk.

SECTION 7. NOTES SPECIFIC TO THE ROLE OF BAMBOO IN AFFORESTATION AND REFORESTATION PROJECTS.

Introduction.

The use of bamboo for afforestation and reforestation projects within the framework of integrated development projects is important in the exploitation of CDM financing under the Kyoto protocol.

For information on the potential of bamboo for CDM AR projects see : Lobovikov, M., Yiping, L., et al, The poor man’s carbon sink. Bamboo on climate change and poverty alleviation, Food and Agriculture Organisation (FAO), Forestry Department, Non-Wood Forest Products, working document no. 8, Rome, 2009. This work contains a complete bibliography with some 160 references. Another good resource is Yiping L. Yanxia L. et al, Bamboo and Climate Change Mitigation, International Network for Bamboo and Rattan (INBAR), Beijing, 2010.

The annual productivity of bamboo varies from 5 to 12 tonnes of biomass per hectare with some 2000-10000 shoots or culms. This corresponds to 9 to 22 tonnes of CO2. Small scale projects cover up to 15000 tonnes of CO2 per year, involving a minimum of 1700 hectare for full density planting to 9000 hectares for minimum density planting. At about Euro 14 per tonne CO2 (14^th November 2009), this means income from a small-scale bamboo AR project can reach Euro 214200 to Euro 523000 per year. This is in principle sufficient to finance a typical integrated development project over a period of ten years of growth and harvest. Typical planting densities are 1000-2500 plants per hectare (monopodial species) and 150-300 clumps per hectare (pachymorph species). Bamboo plants respond well to the application of all types of organic manures. Charcoal from bamboo itself fixes carbon in the soil and retains water and soil nutrients.

Assuming a minimum area of 1700 hectares of full-density planting and 250 tank commission areas in a given integrated development project area, each with 40-50 families, the planted area would be about 7 hectares per tank commission area or an area of say, 300m x 240m.

Bamboo cultivation : water requirements.

A disadvantage of bamboo cultivation is that it needs a good supply of water, which is not always available in developing countries, especially in arid and semi-arid areas.

For ecological reasons, integrated development projects do not provide for industrial-level or extensive irrigation schemes. This means that available rainwater in water-scarce areas might need to be supplemented by labour-intensive hand-fed drip irrigation, possibly through the recycling of urine and grey water from households.

For more information on water requirements of bamboo crops and their yearly distribution see Aspects of Bamboo Agronomy, Kleinhenz B. and Midmore J., Academic Press, North Rockhampton, 2001.

Minimum annual rainfall requirements for bamboo are indicated at 1000 mm., but higher rainfall levels are preferable. The distribution of water supply according to specific growing phases is important. Bamboo plants have shallow, bushy roots which are good for holding and stabilising moisture in the soil. At the same time, where they dry out, bamboo production will be low.

Careful analysis is therefore needed before bamboo is adopted for CDM purposes in arid and semi-arid areas as regular systematic provision of water by hand for say 5-10 thousand plants there is no joke, especially where net daily formal money income from the work can be as low as Euro 2,50.

The main features of bamboo.

“Bamboos provide raw material for about 1500 known commercial products (Scurlock, Dayton et al. 2000). These range from handicrafts, such as woven baskets, to edible bamboo shoots produced by about 200 species, to high value industrial goods, such as pulp, paper and textiles, bio-fuels, charcoal, housing, panels, flooring and furniture (Lobovikov, Paudel et al. 2007) ” [Lobovikov, M., Yiping, L., et al, The poor man’s carbon sink. Bamboo on climate change and poverty alleviation, cited above, p.13.] Where they are used to produce durable goods, large percentages of carbon savings are retained over a long term in the products. These activities produce wide-spread employment possibilities. Note, however, that harvested wood products are still not accepted for carbon accounting under the Kyoto Protocol, though this issue is under discussion.

Flowering of bamboo plants should be avoided. Like other grasses, flowering may be the end of the life cycle of some bamboo species and may lead to death of the plant and loss of the sequestered carbon. However the average flowering interval of bamboo is in the region of 30 years.

Bamboo attributes for climate change ” [ from Lobovikov, M., Yiping, L., et al, The poor man’s carbon sink. Bamboo on climate change and poverty alleviation, cited above, Table 3, p.28]

Attribute	Advantage	Disadvantage

Short rotation.	Early returns; flexibility in land use and high nutrient exports; high frequency of adaptation to climate change; consequence of losing stand; smaller needed for sustained-yield operation; fits well into crediting periods and tCER concept; fits capital intensity; short exposure to risks.	Lowers potential site-degrading interventions, e.g. area compaction; no l-CERs.
Continuous yields.	Continuous economic returns, employment, labour demand.
Uneven-aged management .	Multitude of products; no clear-cuts; less soil nutrient losses and site deterioration; weeding, herbicide use, establishment-stage risks.	Difficult access to interior of sympodial clumps; lower more difficult monitoring; thinning rules.
Persisting rhizomes after culm harvest.	Low decline in biomass and carbon store: easy regeneration.	May impede intermittent or subsequent agricultural use.
Plethora of products.	Very high conversion efficiency, low conversion losses; flexible reaction to market fluctuations; continuous economic benefits along supply chain from cottage industry to large-scale industrial production.
High appeal to consumers.	High economic returns for bamboo products from T-shirts to medicines to floor panels.
Wood substitute.	Reduces demand for timber.
Establishment vegetatively .	Cheap, easy, independent of seed years.
Labour intensive.	Creates employment or self- employments; sensitive to rising wages at industrial scale capital extensive; employment for women, youths.
Light when air-dry.	Manual skidding and transport, animal use, no soil compaction.
Possible integration into agro-forestry schemes.	Reduces slash and burn agriculture and/or deforestation; opportunities for climate change adaptation; synergies mitigation/adaptation.	Allelopathy possible.
May species, worldwide distribution.	Adaptation to specific sites and climate change possible; use as introduced species; overlap with CDM countries.
Rapid below-ground growth.	Site reclamation and organic matter and carbon accumulation.	Possible invasiveness; slope failures on dense root mass.
C3 – plant.	Increases production at higher CO2 concentrations .	More sensitive to drought than C4 plants.
Anatomy and physiology.	Low ash-, silica- and water content as bio-fuel.	Challenging carbon monitoring; emissions of methane and NMVOC; cyanide content.

SECTION 8. CDM FUNDING INDICATIONS FOR THE SELECTED METHODOLOGIES.

The following indications are purely indicative and subject to change on detailed calculation under each of the methodologies applied.

01. CO2 savings through the reduced use of non-renewable biomass for cooking purposes through the introduction of improved stoves.

AMS-II-G.(Version 2). Energy efficiency measures in thermal application of non-renewable biomass. Introduction of high-efficient thermal energy generation units utilizing non-renewable biomass or retrofitting of existing units (e.g. complete replacement of existing biomass fired cook stoves or ovens or dryers with more-efficient appliances) reduces use of non-renewable biomass for combustion. The idea is that renewable biomass savings cannot reduce greenhouse gas emissions because the re-growing biomass reabsorbs them. This is the category under which improved cooking stoves in integrated development projects best fall. This methodology first introduced in February 2008 was considered very complex to use. Version 2, introduced in December 2009, is supposed to be easier to use. Its use would usually be coupled with a switch from non-renewable biomass to renewable biomass. (See also AMS-I-E). The methodology has been adopted in just four (unregistered) small-scale projects without the issue of CER certificates.

For each integrated development project with 50.000 people and 10.000 families, there is a market for 20.000 to 30.000 improved cooking stoves. According to this methodology, the fraction of the total annual biomass savings originating from non-renewable resources is determined and multiplied by the net calorific value of the biomass actually used and the emission factor of the fossil fuel that would most likely be used in the project area in the absence of the project activity.

Supposing a saving of 6.5 kg of non-renewable wood or equivalent per family per day, 65 tons of wood per day are saved in each project area, or 23725 tons of wood a year, being two-thirds of the annual total of 36.500 tons non renewable total wood use. Converted into tons of CO2, that is 18705 tons of CO2 a year.

The website of the Intergovernmental Panel for Climate Change (IPCC) provides a default value for wood of 0,015 TJ [a terajoule = joule + 12 zeros] per ton and a default emission factor for kerosene of 71,5 tons of CO2 per TJ. Calculations for integrated development projects have to be expressed in kerosene equivalent as kerosene is the fossil fuel that would most likely be used in the absence of wood in the project areas.

Total wood used in each project area is 36500 tons a year.

Assuming savings of 65 % through the use of high efficiency stoves, the amount of wood saved would be 23725 tons of wood.

23725 tons of wood x 0,015 TJ = 355,875 TJ.

355,875 TJ x 71.5 tons of CO2 equivalent of kerosene = 25545 tons of CO2.

Conclusion : 25545 tons of CO2 @ abut Euro 14 per tonne {as at 14 November 2009] would produce Euro 357630 a year.

It should be noted that CDM projects cover CO2 only. Voluntary credits (so-called VERs) can be obtained for CH4 (methane) and N2O (Nitrous oxide) through the privately operated Gold Standard label, which is based in Geneva. The Gold Standard accepts parallel applications. For more information refer to AMS II.G Small-scale “Efficiency measures in thermal applications of non-renewable biomass” with its accompanying “clarification on the determination of savings in SMS II.G”.

02. Recovery of forest lands and natural parks and reserves using traditional species and/or bamboo and/or other species.

Each integrated project area with 50.000 inhabitants is divided into about 250 local development units and about 40 intermediate units.

2.f) Some logical advantages offered by integrated development projects for applications for CDM finance under the Kyoto Protocol.

01. They are suitable for a new-generation cooperative multi-methodology Programme of Activities (PoA) initiative at sub-continental level, without the need for business plans, promotional activities and similar. They would form part of policy implementation at sub-regional level.

02. Actions covered by integrated development projects are universally applicable in each clearly defined project area. For example, installation of improved stoves in each project area takes place over 2-3 years, so the so-called evolving base-line approach would need to be followed.

03. Formal money and micro-credits are not required for the purchase of items such as improved cook-stoves and mini-briquettes. All production, distribution and maintenance is carried out under the local money system set up in each integrated development project area. Briquette production, for example, is organised at well-commission level, in areas serving about 350 families. Formal money transport costs are eliminated.

2.g) Schematic drawing of a business plan for a CDM cook-stove project under integrated development projects.

Cook-stoves projects in integrated development projects are designed to fall under the type iii) small-scale CDM projects provided for under par. 6 c) of decision 17/CP.7 covering “other project activities that both reduce anthropogenic emissions by sources and directly emit less than 60 kilotonnes of carbon dioxide equivalent annually”. (17/CP.7, paragraph 6(c) as amended by 1/CMP.2, paragraph 28).

A proposed business plan for a CDM cook-stove project under integrated development projects.

SECTION 3. GENERAL APPLICATION PROCEDURES.

3.a) Some specific issues to be faced when applying the CDM mechanism to integrated development projects.

01. Integrated development projects cover all structures and services needed for a good quality of life for all in each given project area. Afforestation/reforestation initiatives and the use of improved cooking stoves and of locally-made mini-briquettes for them are activities carried out under the local money system set up in each project area. Proceeds from the CER applications would be used to finance the formal-money costs of the projects and not directly related to the improved cooking stoves and mini-briquettes and other facilities themselves. The formal money costs of the projects are used to finance a wide range of services guaranteeing a good quality of life to all the inhabitants of each project area.

02. Why can’t a concept of agreed default values be introduced as methodology, so as to avoid complicated compliance and expensive monitoring activities altogether? Projects are in least-developed countries and would be exempt from registration and adaptation fees. The problem is how to get compliance costs down to a reasonable level, or eliminate the DOE altogether (???). Could this be done on the basis of a standard convention, either with a DOE or with the EB itself, given that all integrated development projects are more or less the same size with similar characteristics ? Integrated development projects are in the world's poorest areas where the rate of ecological degradation is highest. Some 2500 integrated development projects are needed to cover West- and Central Africa (excluding Nigeria and Ghana).

03. How exactly can it be proved that bio-mass reductions achieved are reductions of non-renewable biomass?

04. How exactly, can one “prove” that carbon savings can only be obtained where carbon finance is made available ? Under the CDM mechanism, it must be shown that the claimed energy savings would not have been possible without applying the CDM mechanism. They must therefore be additional to any savings which would have taken place through the application of laws, national projects and similar which would normally be financed through other sources. This is called additionality. Proof of additionality is often the most difficult part of a CDM application. A Project is considered additional if, when it is compared with other investment possibilities, it is either “financially unattractive” or would meet insurmountable barriers for execution if carbon credits were not made available. The project should not be based on any common practices in the project area and may often have special features making it risky for investors.

3.b) Definition of renewable biomass.

Renewable biomass was defined for the purposes of the Kyoto protocol in the Definition of renewable bio-mass Annex 18 by the Executive Board of the UNFCC United Nations Council for Climate Change in its Report of the 23rd meeting, Bonn, par. 57, on 24 February 2006.

Biomass is “renewable” if it meets any one of five conditions :

01. The biomass comes from forests defined as such by the country in question. The area must remain a forest, be free from loss of carbon stocks and be sustainably managed.

02. The biomass is woody biomass coming from cropland and/or grasslands. The areas must remain crop and/or grasslands (or returned to forests), be free from loss of carbon stocks and be sustainably managed.

03. The biomass is non-woody biomass coming from cropland and/or grasslands. The areas must remain crop and/or grasslands (or returned to forests), be free from loss of carbon stocks and be sustainably managed.

04. The biomass is a biomass residue where there is no reduction in carbon pools. This means that if dead wood is already being systematically collected from a forest before the CDM project starts, then its use after the CDM starts is considered renewable as there is no decrease in carbon stocks there. If dead wood is not being systematically collected from a forest before the CDM project starts, dead wood biomass extracted from the forest after the CDM project starts is non-renewable, because the extracted bio-mass would result in a decrease of carbon stocks there.

05. The bio-mass is the non-fossil fraction of industrial or municipal waste.

By implication, any other biomass is non-renewable.

In the case of fire-wood for cook-stoves factors indicating that the wood is non-renewable include aspects such as variations (increases) in the time women and girls spend fetching wood, increases in the price of fire-wood, increase in the use of non-woody fuels, visible on-going reduction in the size of woodlands and forests. If any two of the factors apply, the wood is considered to be non-renewable.

3.c) Approval of projects by the Designated National Authority (DNA).

Each duly prepared project has to receive a letter of approval from a Designated National Authority confirming that the project activity contributes to the sustainable development of the country concerned. The DNA for any given country can be found at the list of designated national authorities at the CDM website of the United Nations Framework Convention on Climate Change. Note that on 9^th November 2010, 130 of the 191 countries that have ratified the Kyoto Protocol had less than 10 CDM applications. Of these, 50 countries had 1-9 projects, 53 countries with a DNA office had no applications, and 27 had no DNA office at all.

SECTION 4 : SOME MATERIAL SPECIFIC TO SMALL CDM COOK-STOVE INITIATIVES.

4.a) Introduction.

Cook-stoves for integrated development projects are locally made in the project areas themselves from gypsum composites. The material used is inert and 100% ecological. Used and broken items can be returned to the local factories and recycled there to make new products. Production is carried out under the local money systems set up in each project area.

Guide.

Carbon Markets for Improved Cooking Stoves : A GTZ guide for project operators, Blunck and others , 3^rd revised edition, GTZ-Hera, Eschborn, February 2010, offers a general introduction to the subject.

Methodologies specific to cook-stove projects.

CDM projects : AMS II.G Small-scale “Efficiency measures in thermal applications of non-renewable biomass” with its accompanying “clarification on the determination of savings in SMS II.G”.

CDM projects : A CDM application in 2009 on biomass residues as the fuel source for individual stoves complete with proposed new base-line and monitoring methodologies relates to an actual project in China. The documents are the actual project texts. They can be used as a basis for drafting small-scale cook-stove projects.

Gold standard projects : Methodology for Improved Cook-stoves and Kitchen Regimes V.01 by Climate Care for the Gold Standard Foundation, Geneva, 2008 offers more specific guide to cook-stove projects.

4.b) Determining existing cooker user groups.

01. Accurate identification of the non-renewable part of bio-mass (or of other fuels) traditionally used for cooking purposes is at the heart of CDM cook-stove projects. The weight in tons of non-renewable biomass saved by the introduction of high-efficiency stoves multiplied by its carbon-dioxide conversion factor to produce a weight in tons of carbon-dioxide emissions is what determines the number of CER (Carbon Emission Reduction) units awarded.

02. A “photograph” is made of current energy use for cooking. “Woody biomass”; “Renewable energy fuels” (solar, fuels without GHG); “Alternative fuels” ( fossil fuels, dung, residues not falling under the term “renewable energy”. This is done by dividing users into “clusters” according to their traditional features, e.g. biogas, solar cookers, charcoal, fire-wood, kerosene, institutional kitchens, commercial kitchens etc.

03. How much of each cluster of materials is traditionally used in the project area ? How much does it cost? This is done through a “kitchen survey” with minimum surveys of 10% of kitchens (families) with a minimum sample of 100 where there are more than 1000 users in a cluster. In principle, the more samples the better.

04. It must be shown which biomass used is not offset by re-growth in the collection area. What is the fuel collection (e.g. forest, grassland) area? How much of it is regenerated in forests and on grasslands on an annual basis ?

05. Calculate the amount of non-renewable extracted woody biomass, non-woody biomass used, and biomass residues used for each source area (e.g. forest, grassland).

06. Take into account eventual lower than required use of cooking utensils and fuels. (E.g. Where there is under-nourishment ; where is food not available; where people cannot afford to pay for fuel).

07. Can use of renewable energy in the project area lead to increase in the use of non-renewable energy elsewhere? (This is called “leakage” and has to be taken into account).

4.c) Calculate base-line emissions.

01. Decide units of emission : e.g. stove-year, kitchen-year, meal-year, product-year.

02. Groups or clusters are formed for each of the energy sources traditionally used in each project area. Mostly there are four categories : wood collected by hand, wood bought commercially, charcoal, and kerosene bought commercially. All cluster groups would then use the same new stove technology distributed only within the project area and the same mini-briquettes distributed only within the project area.

03. The control period for each sample in each cluster should be for at least one week before the installation of the new stoves with use of the mini-briquettes, and for one week thereafter.

04. Calculate the base line emissions. These are (the non-renewable fraction of biomass harvested times the mass of biomass consumed, multiplied by its CO2 emission conversion factor) plus (the mass of alternative fuel consumed multiplied by its CO2 emission conversion factor). The sum is expressed in tons of CO2.

05. Decide the percentage of non-renewable bio-mass used in the project area.

06. Compare emissions under the new stove regime with those under the old one(s). This is the difference in the efficiency of the old stoves compared with the new ones. This is most commonly done by a water boiling test.

07. Decide which type of non-renewable fossil fuel would be used to substitute non-renewable bio-mass if the improved cook-stoves were not introduced.

08. Choose the preferred application period. This can be a single period of ten years, or a period of seven years renewable twice (for a total of 21 years) subject to full review and analysis by a Design Operational Entity (DOE) after each of the first two seven-year periods.

4.d) Monitoring.

01. The monitoring of CDM projects is an expensive and complex exercise. It involves full base-line emission reviews, usually on a two-year basis, and on-going comparison with the original base line statistics. This is particularly onerous with small CDM projects where on-going compliance costs have traditionally been out of proportion with the relatively low value of the carbon credits granted.

02. In some developing countries with potential carbon emission savings projects, the on-going ecological degradation and the total lack of sustainability in project areas are so obvious that a common sense man in the street would wonder why simple default monitoring systems could not be applied, doing away with costly and complex compliance requirements altogether. This common sense logic might not, however, be in the interests of the multinational CDM “servicing” companies involved in the administration of Kyoto-based projects.

03. Since most production items, including improved cooking stoves, tanks, toilets are made locally under the local money system set up in each project area, monitoring is easy because it can be carried under the local money system . For example, the monitoring of a stoves project can be carried out by coupling the number of stoves actually sold to the number of locally-made mini-briquettes which serve as fuel for the stoves distributed over any given period.

4. e) Agreements

Try to avoid forward CER sales as the unit price is reduced because of the risks accepted by the buyer. For this reason the backing of a regional authority in a position to provide initial finance is important. The regional authority then becomes the formal “project owner”.

Hawkins S. et al

Contracting for Forest Carbon : Elements of a Model Forest Carbon Purchase Agreemeent.

published by Forest-Trends and the Katoomba Group, December 2010.