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

This section is technical. In it, an attempt is made to justify the choice of methodology made for each of the thirteen proposed CDM applications for integrated development projects.

Choice of methodology is a complex procedure. Contributions to the improvement of this section are welcome.

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 includes only six of the thirteen preferred methodologies notwithstanding the fact that, with the exception of AMS-III-AJ, they were all available at the time the tool was published. UNEP tool indications are introduced in the following paragraphs with the words “Possible UNEP tool routing:”

The UNEP tool does not split methodologies for sub-types CDM sector by CDM sector. This makes it difficult to use.

Details on individual applications and indicative calculations of possible CDM funding are included in section 09. CDM funding indications for the selected applications and methodologies.

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

Application 01 comes under CDM sector 3 : Energy demand . Possible UNEP tool routing : Power Consumption > sub-level “Various household installations” > sub-type “Stoves” > small-scale applications > methodologies AMS-II-G (version 5) or AMS-I-C.

Of the two technologies indicated by UNEP, AMS-II-G (version 5) is compatible with CDM Sector 3. AMS-I-C instead is compatible with CDM sector 1 – energy industries). AMS-I-C refers to electricity generation and may therefore be excluded.

AMS-II-G (version 5) refers to energy efficient measures in thermal applications of biomass. So the preferred methodology appears to be AMS-II-G (version 5) with its accompanying “clarification on the determination of savings in SMS II.G”. This application may be supplemented by application 08 below, which refers to a switch from non-renewable to renewable bio-mass for the bio-mass used for the manufacture of mini-briquettes for the new stoves. Doubling up of CDM credits under application 01 with those in 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 here are the actual project texts. The new methodology could perhaps be used as a basis for drafting small-scale cook-stove projects for integrated development projects once it has been approved by the CDM Executive Board.

02. Demonstration projects for the recovery of forest lands and natural parks and reserves.

Application 02 comes under CDM 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 trees native to each project area. This methodology is not included in the UNEP 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.”

The applicability of Reducing Emissions from Deforestation and Degradation in Developing Countries (REDD) projects is still under discussion. Lists of REDD projects so far submitted can be found at the Climate, Community and Biodiversity Alliance (CBBA) website and at the Forest Carbon Portal website. Because of the uncertainty still surrounding REDD projects at this time, their use has not been explored further for use within the framework of integrated development projects.

For an analysis of the effects of REDD+ proposals see : Key Arguments Against Reducing Emissions from Deforestation and Degradation (REDD+), Carbon Trade Watch et al, Barcelona, June 2011. Further information is available in An end to forest offsets : why forests should not be part of the carbon market, Grundtvig Learning Partnerships “Forests and climate protection..”, European Commission, Education and Training, Lifelong Learning Programme, Brussels, May, 2012.

“For those indigenous and peasant communities that still occupy territories covering a substantial surface area and containing the best-preserved natural resources, the preferred carrot for the moment is the sale of environmental services and their by-products, especially REDD and REDD Plus. As many social organisations have shown, REDD/environmental services allow numerous companies, among them the most polluting and destructive on the planet, to continue contaminating and generating profits from their destruction, while creating the necessary conditions for the gradual expropriation of land and territories under the control of peasants and indigenous people. REDD begins by expropriating the capacity of families, communities and people to freely determine forms of control, holding and protection of their spaces and common goods. Using the pretext of the market, the REDD projects impose contracts or management plans drawn up by outside authorities that reduce sources of food and subsistence for local people. This alters local systems of co-existence and destroys or weakens social organisations, all in exchange for minimal monetary revenues that do not resolve the problem at its source and that actually exacerbate tensions. There are well known examples of communities running into debt, fragmenting or breaking up, which leads to resignation, migration, the division of communal land and the eventual acceptance of long-term renting concessions or the sale of the land to access mortgages. The carrot rarely succeeds in curbing discontent but it does keep it at bay until a point where the affected communities are no longer in a position to react or resist.” (Behind the “Green Economy” : Profiting from environmental and climate crisis, GRAIN, Allianza Biodiversidad, WRM, ATALC, www.grain.org website, Barcelona, 11 September, 2012.).

As Mbow, C. et al mildly put it in their report Challenges and Prospects for REDD+ in Africa : Desk Review of REDD+ Implementation in Africa, (GLP Report no. 3, Global Land Project International Project Office International for the Geosphere-Biosphere Programme (IGBP) and the International Human Dimensions Programme (IHDP), University of Copenhagen, Copenhagen, 2012, p.25):

“there is a critical gap between the fundamental aims of REDD+ as elaborated in the international dialog, and the realities on the ground.”

They add drily on p. 35 that “The REDD-mechanisms are more likely to succeed if they build on, rather than conflict with, the interests of local communities and indigenous groups.”

They then conclude at p. 49 that “A REDD-scheme that functions poorly will keep local forest communities and indigenous people imprisoned in extreme poverty. There is the fear that a group of actors will exert its influence of REDD-revenues to the detriment vulnerable communities.”

03. Afforestation activities in settlements as defined with 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 published by the Institute for Global Environmental Strategies (IGES) for the Intergovernmental Panel on Climate Change (IPCC), Kamiyamaguchi, 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 chosen small-scale methodology AR-AMS-0002 (version 2, 17 October 2008) falls under CDM sector 14 “Afforestation and reforestation” but is not included in the UNEP Tool for Selecting CDM Methodologies and Technologies.

The parameters prescribed in AR-AMS-0002 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 on grasslands and croplands.

Small-scale agro-forestry activities including but not limited to distributed bamboo plantations on grasslands and croplands. The come under CDM sector 14 - Afforestation and reforestation.

Methodology AR-AMS-0001 is a “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 UNEP tool routing : Afforestation and Reforestation > sub-level 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 demonstration plantations for practical purposes for local use, including but not limited to Moringa plantations on marginal lands.

This activities comes under CDM sector 14 - Afforestation and reforestation. (AR)).

The preferred methodology is AR-AMS-0004 , version 2, 11 June, 2009. Methodology AR-AMS-0004 is not included in the UNEP 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. Demonstration afforestation and/or reforestation (AR) projects on wetlands using mangroves, eventually other traditional species.

These activities also comes under CDM Sector 14 - Afforestation and reforestation.

The preferred methodology is AR-AMS-003, Version 1, 14 December 2007. This is a “simplified baseline and monitoring methodology for small scale CDM afforestation and reforestation project activities implemented on wetlands.”

A possible UNEP tool routing is Afforestation and Reforestation > sub-level forests > sub-type mangroves.

Applications will usually apply to re-construction of mangrove forests in mangrove swamps. Other traditional species will be used according to the bio-spheres involved.

07 Demonstration afforestation and/or reforestation (AR) projects on lands having low inherent potential to support living biomass, using Jatropha, eventually other trees and shrubs.

These activities come under CDM Sector 14 - Afforestation and reforestation.

The chosen mMethodology AR-AMS-0005 (Version 2, 8 April 2009) is not included in the UNEP Tool for Selecting CDM Methodologies and Technologies. The methodology can be used where project activities are implemented on areas having low inherent potential to support living biomass without human intervention.

The project activities must be implemented in areas listed in (i) to (iv) below. The project participants (PPs) have to provide evidence/data to show 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.

This application comes under CDM Sector 1. Energy industries.

A possible UNEP tool routing is : “Waste” > sub-level “Biomass” > sub-type “Biomass briquettes” > small-scale applications, methodologies AMS-I-C or AMS-III-B.

The more commonly applied of the two methodologies is AMS-I-C. Both methodologies are compatible with CDM 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. However, neither of these appears applicable to integrated development projects. AMS-I-C has been applied for renewable energy briquettes distributed to individual households for cooking purposes. The principle that small-scale type I projects for the generation of renewable energy up to 15MW or equivalent for briquettes for cooking stoves has therefore been accepted.

AMS 1.E Small-scale Switch from non-renewable biomass for thermal applications by the user (Version 3) together with its accompanying clarification on the calculation of the thermal output for applicability of small-scale limit of 45 MWth on the other hand falls under the UNEP sub-type “manure” and 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. This appears to a more appropriate methodology than AMS-I-C or AMS-III-B. The Possible UNEP tool routing for AMS 1.E is : “Renewable Energy” > sublevel “Bio-mass” > sub-type “Manure” > small-scale applications, methodology AMS 1.E, using renewable bio-mass instead of manure.

The clarification on the calculation of the thermal output for applicability of small-scale limit of 45 MWth for AMS 1.E refers to agreement by the working group for small-scale projects that the “useful power” concept, being the manufacturers specifications on the installed/rated capacity of a cook stove, be used to verify compliance with the small-scale limit of 45 MW thermal output limit of group I projects.

Integrated development projects provide for the local production of mini -briquettes made from renewable biomass residues supplemented as required by specially cultivated renewable energy crops instead of animal wastes.

Methodology AMS 1.E therefore appears to be more appropriate than AMS-I-C and AMS-III-B.

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. It must therefore 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.

This application would presumable fall under either CDM sector 04. Manufacturing industries or 05. Chemical industries.

While the market price of fertilisers is interesting from the point of view of project benefits, CDM savings would be directed to savings of CO2 emissions during the production, packaging and transport of the fertilisers.

There is no existing methodology for this. The small scale of the project initiative in this respect would not appear to justify opening negotiations for the approval of a new methodology.

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

The application refers to 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 CDM sector 3 : energy demand.

A possible UNEP tool routing is : Power Consumption > sublevel “Various household installations” > sub-type “Stoves” > small-scale applications > methodology AMS-II-G (version 5). as provided in application 01 above. Doubling-up will cause loss of income to project beneficiaries.

Risk of doubling up must be avoided. The energy from this application 10 could be used for lighting purposes and/or for small scale electricity generation. If it is used for lighting purposes, it can be brought under CDM Sector 1 - Energy industries. A possible UNEP tool routing for this is : Power Consumption > sub-level “Various household installations” > sub-type “Lighting” > small-scale applications > methodologies AMS-II-J, AMS-II-C, AMS-I-A, or the new methodology AMS-III-AR.

Of the four named methodologies, 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 (introduced 26^th November, 2010) applies to the adoption of LED lamps. Methodology AMS-III-AR is discussed in more detail in application 11 below.

A better option may be methodology AMS-III-R, which falls under CDM sector 15, Agriculture.

A possible UNEP tool routing for AMS-III-R is : Renewable Energy > sublevel “Biomass” > sub-type “Domestic Manure” > small-scale application AMS-III-R, methane recovery in agricultural activities at household/small farm level. This must be used in combination with AMS-I-C Thermal energy production with or without electricity.

The technology/measure for methodology AMS-III-R is as follows :

“1. This project category comprises recovery and destruction of methane from manure and wastes from agricultural activities that would be decaying anaerobically emitting methane to the atmosphere in the absence of the project activity. Methane emissions are prevented by:

“(a) Installing methane recovery and combustion system to an existing source of methane emissions, or

(b) Changing the management practice of a biogenic waste or raw material in order to achieve the controlled anaerobic digestion equipped with methane recovery and combustion system.

“2. The category is limited to measures at individual households or small farms (e.g. installation of a domestic biogas digester). Methane recovery systems that achieve an annual emission reduction of less than or equal to 5 tonnes of CO2e per system are included in this category. Systems with annual emission reduction higher than 5 tonnes of CO2e are eligible under AMS III.D.

“3. This project category is only applicable in combination with AMS I.C.

“4. The project activity shall satisfy the following conditions:

“(a) The sludge must be handled aerobically. In case of soil application of the final sludge the proper conditions and procedures that ensure that there are no methane emissions must be ensured.

(b) Measures shall be used (e.g. combusted or burnt in a biogas burner for cooking needs) to ensure that all the methane collected by the recovery system is destroyed.

“5. Aggregated annual emission reductions of all systems included shall be less than or equal to 60 kt CO2 equivalent.”

Methodology AMS-I-C in turn “comprises renewable energy technologies that supply users with thermal energy that displaces fossil fuel use. These units include technologies such as solar thermal water heaters and dryers, solar cookers, energy derived from renewable biomass and other technologies that provide thermal energy that displaces fossil fuel.”

The new methodology AMS-III-AR (introduced 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-III-R can be used with AMS-I-C 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. This too would, however, lead to a drainage of possible CDM revenues.

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).

The 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 falls under CDM Sector 3 - Energy demand.

A possible UNEP tool routing is: Power Consumption > sub-level “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 CDM sector 1 (energy industries). It 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 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 CDM 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 which was introduced on the 26^th of November, 2010 that appears to offer the best solution for integrated development projects. It applies to the adoption of LED lamps. It is not included in the UNEP 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 improved lighting technologies, rather than 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-AR appears to be the preferred methodology. The substantially higher initial investment cost of the lamps is potentially 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 (street) lighting systems.

This falls under CDM Sector 1, Energy industries.

A possible UNEP tool routing is : (for solar) “Renewable Energy” > sub-level “Solar” > sub-type “Solar PV” > small-scale applications > AMS-I-D or AMS-I-A; or (for wind) “Renewable Energy” > sub-level “Solar” > sub-level “Wind” > sub-type “Wind”, small-scale applications > AMS-I-F, AMS-I-D or AMS-I-A.

All three methodologies are compatible with CDM 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 the 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.

Of the three names methodologies, the most appropriate one is methodology AMS-I-A which does not, however, enjoy the advantages of simplified procedures.

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.”

Methodology 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. It therefore 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 a CDM sector 13 activity. It is covered under methodology AMS-III-AJ.

Methodology AMS-III-AJ is not included in the UNEP tool for Selecting CDM Methodologies and Technologies.

Methodology AMS-III-AJ 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. Examples are plastic resin to displace production of virgin HDPE and LDPE materials in dedicated facilities thereby saving energy and reducing CO2 emissions.

AMS-III-AJ is about mechanical recycling. It defines physical/mechanical processes 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. Measures taken include but are not limited to one or more of the following : washing the separated LDPE and HDPE materials with hot water, drying, compaction, shredding and pelletizing.

Recycling facility (ies) is (are) facility (ies) places where the recyclables in the municipal solid waste that are 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.

Until now, AMS-III-AJ is the only other methodology covering energy savings through the recycling of non-organic solid waste products.

Another methodology, AMS-III-X ,relates specifically to the recovery of HFCs (hydrofluorocarbons) from the recycling of refrigerators. It is not appropriate for integrated development projects.

Block 8 : Economic aspects.

Sect. 5 : Kyoto Treaty : Analysis of possibilities for finance. (Additional)

01. Executive summary.

02. Introduction.

03. Potential areas of application of CDM mechanisms to integrated development projects.

04. Small-scale CDM activities.

05. Programmes of activities.

06. Selection of the CDM methodologies for the applications listed in section 03.

07. Information specific to afforestation/reforestation (AR) methodologies specifically applicable to integrated development projects.

08. Notes specific to the role of bamboo in afforestation and reforestation (AR) projects.

09. CDM funding indications for the selected applications and methodologies.

10. Graphs and conclusions.