Climate Change, UNFCCC

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Climate Change, UNFCCC Kyoto, CDM

• By
• Promode Kant
• Director, IGWES

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Global mean temperatures are rising faster with
time
Period Rate Years ?/decade
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Retreat of the Gangotri glacier snout in last
220 year
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Kilimanjaro 1970 2000
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Greenhouse effect

• Natural greenhouse gas effect known for last 175
  years
• Fourier (1827)- atmosphere acts like glass of
  hothouse because it lets thru light rays of the
  sun but retains the dark rays from the ground
• These trace gases are transparent to incoming
  short wave solar radiation
• But absorb the outgoing long wave terrestrial
  radiation and remitting this energy in all
  directions
• Thus fundamentally altering the radiation balance
  of the earth atmosphere system

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Radiative forcingSource Stern Review
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Link between GHGs and climate change Source
Stern Review
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Global carbon stock

• Carbonated rocks 65000000 Gt
• Fossil fuel reserves 4000 Gt
• Deep ocean 38000 Gt
• Surface ocean 1020 Gt
• Terrestrial ecosystems 2070 Gt (vegetation 610
  Gt, soils 1400 Gt litter 60 Gt)
• Atmospheric ecosystem 750 Gt

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Greenhouse gases

• Kyoto Protocol recognizes six GHGs
• Carbon di oxide
• Methane
• Nitrus oxide
• Sulpher hexafluoride
• Hydrofluorocarbons
• Perfluorocarbons

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Kyoto protocol

• Gives effect to the aims and intents of the
  UNFCCC to reduce anthropogenic changes in the
  climate
• Adopted under article 17 of UNFCCC
• Places legally binding commitments on developed
  countries to bring their collective emissions
  5.2 below the 1990 levels during the first
  commitment period 2008-12

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Land use, land use change forestry (LULUCF)

• The Forests are both sources and sinks of carbon.
  
• Appropriate management practices can enhance
  their net sink values.
• Net changes in GHGs caused by direct human
  induced LULUCF limited to afforestation,
  reforestation and deforestation (ARD) since 1990
  eligible for meeting commitments of Annex 1
  countries
• These activities should be based on sound science

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Land use, land use change forestry (LULUCF)

• These activities should contribute to
  conservation of biodiversity and sustainable use
  of natural resources,
• Limited use of forest management activities
  allowed within Annex 1 countries for meeting
  their commitments

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LULUCF (contd)

• Defines forest as a min area of 0.05-1.0 ha
  (India 0.05 ha) with tree crown cover of more
  than 10-30 (India 30) with trees (or
  regeneration) with the potential to reach 2-5 m
  (India 5 m) at maturity
• Afforestation is conversion of land which has
  not been a forest for atleast 50 years through
  planting, seeding and/or the human induced
  promotion of natural seed sources
• Reforestation is raising forest on lands not
  containing forests as on 31.12.1989

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Mitigation Action of Forests

• By emission avoidance or conserving existing
  carbon pools by slowing deforestation or
  improving forest harvesting practices forest
  management
• By carbon sequestration or expanding the storage
  of C in forest ecosystems by increasing the area
  and/or C density of forests management
  reforestation
• By lengthening C storage in forest ecosystems
  in forest products end use management

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Mitigation Action of Forests

• By substituting sustainably grown wood for energy
  (bio-fuel) and energy intensive cement based
  products (construction material) end use
  management

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Bio-fuels

• Biomass used as replacement for fossil fuel
• The credits earned are equal to the fossil fuel
  replaced
• Very short rotation possible quick income
• Biomass-based energy generation technologies
  costly, long distance transportation of this
  resource not economical, hence limited use
• With technological changes this may prove to be
  the most attractive activity

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Barriers to biofuels

• In EU biofuels become competitive when petrolium
  prices reach 70/barrel
• In US 50 to 60 only
• Brazilian threshold is 25-30
• Petroleum prices can be manipulated just to harm
  nascent biofuel industry
• Food security when corn, sugarcane, wheat etc
  used or excessive land utilization

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Barriers to biofuels

• Threat to biodiversity and forests
• Environmental consequences of large scale
  monocropping
• Large usage of water
• Pollution due to pesticide and fertilizers
• Land degradation

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Promotion of biofuels in China

• A risk management scheme to cover losses caused
  by reduction in fossil fuel prices
• Preferential treatment and/or subsidies to raw
  material producers using idle land,
  saline/alkaline/desert lands
• Encouragement to model projects using high and
  new technologies
• Preferential tax treatment to biofuel companies
  that face operating difficulties

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Jatropha and beyond

• There are hundreds of species of TBOs in forests
  of India
• We need to use a large part of the existing oil
  potential in forest and non-forest lands too
• Use of oilseeds from forests
• Exploitation within threshold possible with
  appropriate management

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Some TBOs in India(source CRDT, IIT, Delhi)
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Growing TBOs in forest lands

• Total geographic area of JK 222236 sq km
• Total forest cover 21267 sq km
• Dense 2102 sq km, moderately dense 8395 sq km
• Open 10770 sq km
• Can we use a part of these open forests for
  raising TBOs say 10, or about 0.1 Mha by
  mixing locally appropriate TBOs in 25 mix

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Using wastelandssource PCRA

• India has 64 Mha of wastelands of which
• Gullies/ravines 2055300 ha
• Waterlogged/marshy lands 1656800 ha
• Saline/alkaline 2047700 ha
• Shifting cultivation 3514200 ha
• Degraded grazing lands 2597800 ha
• Degraded lands under plantation crops 582800 ha

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Using wastelands

• Sands inland/coastal 5002100 ha
• Mining/industrial wastelands 125200 ha
• Barren rocky patches 6458400 ha
• Steep slopes 5578800 ha
• Can we develop models that encourage private
  initiatives to use WL for growing TBOs
• Private ownership of WL distribution among poor

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Food Security and Biodiesel

• Corn for bio-ethanol in US and China competes
  with animal feed
• Oilseed farming like Rape seed competes with
  foodcrop farming
• In biodiesel we limit ourselves to nonedible oil
  grown over agri surplus lands
• And also used edible oil
• Biotech research for far higher food productivity
  so as to release more lands for biofuels

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Scope for bioenrgy

• A galloping demand for energy
• Finding balance between energy security, economic
  development and environmental protection
• Creating a demand of biofuels in India and
  worldwide
• Land availability- shifting cultivation lands,
  encroached lands and waste lands
• Open forests source of tree borne oilseeds?
• Dense and moderate dense forests for biodiversity
  conservation
• Reaching one third forest and tree cover target
• Waste lands
• Need for diverse sourcing of raw material
• Biodiversity and bioenergy
• Food security and bioenergy

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Clean development mechanism

• Undertaken by Annex 1 countries or their entities
  in non-Annex 1 countries
• Objectives are to mitigate climate change
  effects, assist developed countries meet their
  commitments at reduced costs taking advantage of
  low costs in non-Annex 1 countries and help
  developing countries achieve sustainable
  development
• Emission reduction and sink enhancement projects
  are eligible. In forestry only afforestation and
  reforestation projects are currently eligible

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Clean development mechanism

• Only areas not forested as on 31.12.1989 eligible
• Additionality-reduce GHG above BAU, sequestration
  to be additional to any that would occur without
  the project
• Emission reduction must be real, measurable and
  bring long term mitigation
• Should be voluntary, approved by host country
• Projects must begin from 2000 onwards

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CDM administrative and functional structure

• CDM Executive Board (EB) at apex
• to develop CDM rules and methodologies for
  baseline, additionality and leakage assessments
• accredit DOEs, expected to monitor their
  performances
• review validation register projects,
• review certification reports and issue CERs
• Maintain public data base for CDM projects

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CDM administrative and functional structure

• Designated National Authority (DNA) in each
  country - to develop and publicize country level
  operational procedures, decide sustainable
  development criteria, confirm voluntary nature of
  participation and projects contribution to
  sustainable development biological diversity
  issue letters of approval for validation and
  registration

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CDM functional structure - DOE

• Designated Operational Entities (DOE) to work
  independent auditors of the projects
• Should be a legal entity with a documented and
  public internal structure of governance and
  management
• Should have sufficient in-house expertise in CDM
  rules, methodologies and in monitoring of
  emission sources and sinks

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CDM functional structure - DOE

• Should have financial stability to support the
  activities and insurance to cover the legal and
  other liabilities arising from its activities
• Demonstrate that it has no conflict of interest
• Can either validate projects for registration or
  verify emission reductions as per Marakkesh
  Accord but EB can permit it to do both
• Verify monitoring reports

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CDM project initiation

• Project Developer to prepare the Project Design
  Document (PDD) and submit to DNA
• Provide or obtain debt or equity finance for
  project
• Implement the project after registration
• Monitor in accordance with approved monitoring
  schedule
• Deliver CER to purchaser thru market or other
  mechanisms

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Project Design Document

• Sets project objectives
• Defines project boundaries
• Projects a baseline using an approved methodology
  or getting a new one approved
• Provides proof of additionality
• Assesses leakage and plans for reducing it
• Technical design of the proposed operations

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Project Design Document

• Project duration and crediting period
• Addresses biodiversity conservation and
  sustainable development issues
• Asseses environmental impact
• Proposes a monitoring plan
• A plan for the needed human and financial
  resources
• Establishes a project management plan

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Validation

• Validation is evaluation of project by DOE after
  ensuring that basic eligibility conditions have
  been met
• Participation is voluntary
• Host country and Annex 1 partner are Parties to
  Protocol have established DNA
• local stakeholders comments have been taken into
  account

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Validation

• socio-economic, environmental impacts impacts
  outside project boundary have been considered
• leakage minimized
• Additionality established
• An approved baseline methodology monitoring
  plan adopted
• harvesting, thinning verification cycles
  adopted in such a manner that verification does
  not show peaks in carbon stocks

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Validation

• DOE to make PDD publicly available for comments
  for 30 days and take comments into consideration

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Registration monitoring

• Registration is formal acceptance by CDM-EB of a
  validated project prerequisite for
  verification, certification and issuance of
  tCER/lCER
• Project participants to include an acceptable
  monitoring plan in project design for collection
  and archiving of all relevant data, methodology
  for collection of data, taking uncertainties into
  account, quality assurance and control procedures
  for data collection

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Verification certification

• Verification is periodic independent review and
  ex post determination of net GHG removal by sink
  by project activity since the beginning of the
  project by DOE
• Certification is written assurance by CDM-EB of
  the net GHG removal by sink after verification

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Permanency

• All biological sinks are non-permanent
• Non-permanency is handled thru the mechanism of
  temporary CER / longterm CER
• AR projects to be issued with credits after the
  initial verification and certification of the
  project and then every five year after vc till
  the end of the crediting period

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Crediting

• Crediting period is AR project life during which
  C sequestered is utilizable for issuing CERs
• It can be 20 years subject with up to 2
  extensions of 20 years each subject to
  revalidation of baseline
• Or 30 years without extension
• Selection of crediting period is a business
  decision

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tCERs

• tCER valid till the end of commitment period
  subsequent to one for which they were issued
  potentially valid till 9 years if issued in
  2008 valid till 2017
• Issued after a CR verifies C sequestered since
  registered project starting date
• Thereafter every five years, but the tCER issued
  previously remains valid till the end of the
  subsequent commitment period

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tCERs

• At the end of validity the Annex party using that
  tCEr required to replace it with a permanent CER
  or another tCER/lCER
• But it is not necessary to replace the tCER from
  a different project activity thus from a
  project that continues to be alive and well can
  continue to provide tCERs to replace the earlier
  ones

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lCERs

• lCER validity ends with the project crediting
  period but is subject to vc every five years
• If there is addition in C after 5 years more lCER
  will be issued if reduction then the lCER issued
  earlier will have to be replaced by the country
  using it for compliance
• If no certification then also replacement is
  necessary

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CERs

• Both cannot be banked, must be used in the
  commitment period in which these were issued
• Both stop gap arrangements to be replaced by
  Annex 1 party using them for compliance after
  their expiry by ERU/

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Arranging finances

• Host country invests and sell CERs generated
  unilateral project
• Annex 1 participant provides debt in return for
  assurance of CERs within a prearranged range of
  prices
• Annex 1 partner provides equity capital in CDM
  venture and shares revenues generated

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Arranging finances

• An annex 1 multinational company dealing in
  renewable energy brings latest technology and
  swaps it with CERs generated
• Bundling CERs with fossil fuel imports eg India
  exports coal to UK through a contract which
  includes purchase of CERs from a CDM project from
  India also

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Foreign investment in CDM

• FDIs enter in a conducive atmosphere, most go to
  China, Brazil and India etc
• FDI in land based ventures not permitted in India
  - Foreign Investor can invest thru forward
  purchases of carbon credits
• Unilateral, bilateral and multilateral projects

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Risk insurance

• Major bearing on CER costs. Risk assessment
  and allocation among various participant
  necessary through contractual arrangements
• Policy related risks changes in Protocol, CDM
  rules, changes in national policies related to
  CDM or FDI, changes in taxation policies,
• Major fires, disease or pest attack
• Land related disputes going out of control and
  leading to destruction

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Risk insurance

• Land opportunity costs sky rockets thus
  increasing the true costs leading to pressure on
  the project participants to abandon AR project
• Technological innovations provide cheaper options
  of generating CERs
• Major internal or external security threats

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Key Requirements

• Baseline carbon emission by sources or
  reduction by sinks in the absence of the CDM
  project
• Baseline could be based on the most likely land
  use at the project start
• Or, most economic course of action taking into
  account barriers to investment
• Or, existing or historical changes in carbon stock

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Key Requirements

• Leakage GHG emission due to project activity
  outside the project boundary. Only negative
  leakage to be considered in LULUCF. It is due to

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Small scale AR projects

• AR Projects with net GHG removal lt 8Ktons of
  CO2/yr developed/implemented by low income
  communities and individuals. Renewable energy
  projects lt 15MW
• Simplified PDD, baseline monitoring methods,
  EIA analysis. Lowered registration costs
• Allowed to bundle project activities for PDD,
  registration, verification to reduce transaction
  costs.

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Crediting

• Crediting period is AR project life during which
  C sequestered is utilizable for issuing CERs
• It can be 20 years subject with up to 2
  extensions of 20 years each subject to
  revalidation of baseline
• Or 30 years without extension
• Selection of crediting period is a business
  decision

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Voluntary carbon market

• Many MNCs invest in carbon sequestration efforts
  outside Kyoto
• Reason- Corporate Social Responsibility and also
  legislations as in California that requires
  carbon emission reductions or sink enhancement
• Relaxed conditions of additionality, leakage, low
  transaction costs
• Also low carbon prices
• Suitable for casuarina plantations in coastal
  areas which would otherwise not fulfil
  additionality conditions

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CDM VCM

• CDM in LULUCF sector proof of additionality,
  leakage assessment, non-permanence, absence of
  post harvest norms only 1 forestry project
  current
• VCM- outside Kyoto- more relaxed, 53 from LULUCF
  sector
• CDM generally not viable below 3000 ha and 10
  tC/yr productivity (about 100000 t CO2e) VCM 46
  below 5000 tCO2e, 69 below 20000, 86 below
  50000
• CDM price range for permanent CERs 13/t CO2e
  VCM ranges from 0.5 to 20/ tCO2e, usually higher
  for lower volumes and also when backed by
  certification
• CDM very high standards VCM 9 CDM norms, 17
  near CDM, 12 Gold standards, uncertified 34
• CDM market size 350 Mt CO2e, VCM currently 2 Mt
  but rising very fast and by 2010 expected to
  cross 400

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Potential of Open Forest for CDM VCM Project
Activities

• Open Forest (CDR 10-20) Ist Priority
• Open Forest ( CDR 20-30) 2nd Priority
• Open Forest (CDR 30 40) Not Applicable
• (Assumption Open Forests equally divided into
  three ranges of 10-20, 20-30 30-40 cover
  density range.)

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Possible priority areas

• Glaciers etc 1.5 - not suitable
• Hyper arid 7 - not suitable
• Typic arid 100-500 mm rainfall, 7 - Priority 1
• Semi arid (dry) 500-750 mm, 15.6, some part -
  Priority 1
• Shifting cultivation areas Priority 1
• Rehabilitation of encroached areas- Priority 1
• Lands to be allotted under Tribal Act Priority
  1
• JFM areas Priority 1

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Priority areas

• Human settlement land (along roadside and rail
  tracks, residential, parks, green belts) etc
  methodology under approval Priority 2
• Semi arid (moist) 750-1000 mm, 22, mostly good
  for agri, small part can be used - Priority 2
• Coastal areas-shelterbelt biofuel plantations
  casuarina etc

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Some possible projects

• CDM/ VCM project on sequestration and fossil fuel
  replacement by fuelwood plantations
• CDM / VCM Projects on reforestation in degrade
  Reserve forests under JFM control.
• CDM/VCM project on Biomass Gasifier Using
  Available Biomass
• CDM/VCM village energy project for household
  lighting using existing Tree bearing oilseed in
  forest areas

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• CDM / VCM Pilot Small Scale Project on biodiesel
  from jatropha owned by small farmers
• VCM project on replacement of fertilizer by
  vermicompost by small vegetable growers
• CDM / VCM Large Scale Project on biodiesel
  from jatropha plantations
• VCM project on biogas plants in a cattle
  intensive villages

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Organizing the community

• Projects taken up by individual farmers would not
  capture much carbon, and its is an expensive
  affair
• The carbon offset projects can be profitable only
  if taken up collectively at a community level
• This calls for organization of people
• Willing project participants can form a society
  that can initiate and execute the project.

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How to organize

• Conceptualizing the possible project activity
• Should benefit the low-income
• Meeting of the stakeholders
• Formulation of Byelaws of the society
• Registration of the Society

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Byelaws

• Society byelaws are the soul of societies
• Have to be drafted very carefully to keep the
  members together for a long time
• Must provide opportunities for all sections of
  society including women and minorities
• Should not allow a small number of people to
  monopolize the society as it will weaken the
  interest of others who would then walk away

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• Membership in the society to be given to any
  adult farmer/stakeholder of the area who is
  willing to contribute land voluntarily for the
  project
• The society should be formed under the guidance
  and leadership of the forestry department or
  other able organization working in this field

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• Carbon credits to be managed and shared by the
  society
• The Forest Department may take no share of CERs
  so as to encourage more CDM and VCM based
  projects to sequester the GHGs and mitigate
  climate change

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Role of Forest Department

• The department can provide technical know how for
  the project
• Department can help in selling the credits
  generated from the project
• The forest department can provide seedlings
• But the basic responsibility for the running of
  society lies with the villagers

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• The technical assistance to the society in the
  form of skills in nursery development etc and as
  tree seedlings may be provided by the forest
  department.
• either the society will directly manage the whole
  project land or the individual members shall be
  responsible for the land that has been
  contributed by them to the project activity.

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The Haryana Small Scale CDM project

• 227 farmers from 8 villages in Ellenabad Block of
  Sirsa district in Haryana formed a society
• They contributed 370 hectares of land
  collectively for a period of 20 years
• These lands were degraded due to sand dunes and
  very low in productivity due to less rainfall
• Now they are planting those degraded lands with
  trees that are native and tolerant to such
  conditions
• This project is expected to earn a net revenue of
  Rs. 47.5 crore over 20 years

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Avoided deforestation

• Discussions are ongoing on providing incentives
  for avoiding deforestation
• Preventing deforestation beyond the baseline
  deforestation for a non-Annex 1 country would be
  rewarded under this system if approved
• But countries like India and China which have
  avoided deforestation at considerable cost to the
  society will not benefit from it

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Thanks