Bright lights on the Bay of Bengal
Article from TÜV SÜD Journal 4/2010
 | Companies from industrial countries can finance climate-protection projects in developing countries and trade the saved CO2 emissions as certificates. This adds up to something more than a boost to the environment: The technology transfer related to this action creates know-how, jobs and a new attitude about environmental protection. |
The city with the tongue-tying name of Vishakhapatnam is located on the eastern coast of India, right on the Bay of Bengal: a prosperous metropolitan area with more than 1 million residents who have untied the pronunciation knot by calling the city simply »Vizag.« This name is a lot easier to pronounce and it takes less time to say as well. Business in Vizag is doing well. It is one of India's fastest-growing metropolitan areas. It has been designated a spe-cial economic area with a port that boasts of ISO 9001, ISO 14001 and OHSAS 18001 quality certifications – the only one of the country that does so.
Since February 2009, a project that was initiated by the German companies Osram and RWE has been under way. The goal: Osram intends to collect 700,000 light bulbs from about 580,000 households in the city and replace them with energy-saving bulbs. Some of the bulbs will be given away. Others will be sold at extremely reduced prices. The old bulbs will be recycled in an environmentally conscious manner. As a result of the exchange, the CO2 emissions will be measurably reduced. The reason for this need is clear: The power plants that produce Vizag's electricity emit about 850 grams of CO2 for every kilowatt hour of power they produce. By comparison, the CO2 emissions per kilowatt hour of electricity in Germany total about 572 grams in the entire energy-provider mix.
Achieving much with relatively few means
The fact that two German companies are thinking about the light bulbs used in the eastern Indian city has less to do with the concerns for humanity shared by the manufacturers of energy-saving bulbs and more to do with the Kyoto Protocol. Osram and RWE – just like many other companies based in industrial countries – are using the Clean Development Mechanism (CDM) that was established by the protocol to create incentives for investment in climate-protection projects in developing countries. In such nations, it is generally possible to achieve much at relatively low costs. Companies that initiate such projects receive climate-protection certificates as a reward. Instead of lowering emissions in their own countries, companies invest in projects in India, China and Colombia, and then have the resulting CO2 reductions credited to them.
CDM puts climate protection on the agenda
»Of course, we would like to have more projects in the area of renewable energy and energy efficiency to assure economic development that is not based on the burning of environmentally damaging energy sources like crude oil, natural gas and coal,« says Juliette de Grandpré, a climate-protection and energy-policy expert at the WWF in Berlin. »We also welcome additional investments in small projects that experience has shown contribute more to sustainable local development.«
The blanket criticism that industrial countries would absolve themselves by sponsoring projects in developing countries is incorrect for several reasons: First, only one-fifth of a company's reduction total may consist of CDM certificates. The much larger portion must come from its own conservation efforts. Second, CDM projects are required to ensure that a technology is transferred from an industrial to a developing country. And, finally, CDM projects like the one in Vizag actually represent the activity that moves the issue of environmental protection onto the public agenda of many countries for the first time. »The critics frequently think in overly one-dimensional terms. After all, why should climate-protection projects in a country like China be bad per se?« says Stephan Hild from Carbon Management Service at TÜV SÜD in Munich. »We achieve the best climate effects in a country that meets up to 80 percent of its electricity needs from coal when we make the switch to wind or hydroelectricity.«
The multinational TÜV SÜD team of auditors at Carbon Management Service is a »designated operational entity.« Their job is to review and certify the impact of CDM project before they are registered with the United Nations. A planned project may be pursued only if it meets the criterion of additionality. »Additionality« means that the environmental-protection measure would not be pursued in the absence of the – expected – credit from the sale of emission certificates. »Making this determination is the most difficult part of our work,« Hild says. TÜV SÜD plays a critical role within the framework of the validation of a CDM project because the certification is the most important instrument used to guarantee the seriousness and credibility of projects. The auditors themselves also have a major interest in showing that their work also meets strict criteria. In the past eight years, the emission-trading experts at TÜV SÜD have processed more than 1,200 projects on the basis of the Kyoto Protocol, and 97 percent of the CDM projects supported by TÜV SÜD were registered by the United Nations. In addition, the readers of the British business magazine »Environmental Finance« selected TÜV SÜD in the years 2007 and 2009 as the best certification company for climate-protection projects based on the Kyoto Protocol.
In developing countries like Eritrea, TÜV SÜD reaches its limits. A project was to be certified here, but it had to be canceled because of the security situation in the country. Hild says: »Beginning in 2012, the least developed countries, the LDCs, will be more closely integrated into CDM projects through emission trading in order to achieve uniform distribution, which is to produce an upswing and contribute to sustainable development in countries and sectors that have not received much consideration from CDM, including energy efficiency and agriculture.«
As the Indian light-bulb project shows, it is easier to replace an item that damages the climate with one that helps it. Because it can clearly show how much CO2 can be saved by taking the step. In this specific case, the total is 400,000 tons – roughly the amount of CO2 emissions produced by 40,000 Germans each year.