CLEAN DEVELOPMENT MECHANISM AND ITS APPLICATION ON DEMAND SIDE SECTOR

Submitted to: Sir Tanzeel-ur-Rasheed Submitted by: Muhammad Umar (09-ME-84)

Brief introduction:
The increase in pollution, continuous threats to the environment and the global warming are the major problems since the industry has developed. In order to control carbon content in air due to excessive industrialization the “United Nations Framework Convention on Climate Change” has developed a system which will maintain a code of conduct and will do reforms regarding the control of carbon release or pollution.

Essay:
Rapid industrialization and inactive behavior of government and non government organizations over pollution control, environmental hazards and changing climatic conditions leads to a high rate of damage to environment, global warming and formation of new diseases and problems. The high production of goods and services leads to a better prospect apparently but in the inside view the area or the country is going towards carbon constraints, that means one day the pollutant level will lead to such a level that one cannot ignore it. One of the major scale of pollution measurement with respect to the industrial scenario is the carbon content and the green house gases. For it the “United Nations Framework Convention on Climate Change “ has made a special protocol named “Kyoto protocol” according to which the level of green house gases in the air should be controlled to such a minimum level that it could no longer effect the climate in any way. Actually it is a flexible market based approach to control the industries. It tends to reduce the already polluting factors but more effectively its approach is based on the formation of less polluting technology or techniques. The protocol divides the including countries in two groups. One is the “Annex 1” and the other is “Non Annex 1”. The division is based on development level, the countries which have attained sustainable development and are highly industrially equipped are included in “Annex 1” like Japan, Australia and USA. And the countries which are on the way to prosperity or are not so much sound industrially are included in “Non Annex 1” like Brazil, Peru and Pakistan etc. The base of clean development mechanism is similar but differentiated responsibility for the included countries. The mechanism has two basic goals according to the protocol articles , one is to create sustainable and reliable development in Non Annex 1 countries and the other is to limit the Annex 1 countries to their quantified emission limit. The controlling factor to these two objectives is the environmental control and prosperity. The first objective is met by doing initiatives and projects in undeveloped countries and the second one is met by putting a heavy charge on crossing the limit of emission defined by the protocol. The Annex 1 countries which are limited at a specific level of emission have to bear fine if they exceed the level but according to the rules of the Kyoto protocol the industries can release

any amount of harmful green house gases by purchasing carbon credits from the protocol. This means they are not confined to stop , they are only fined or taxed on excessive emission. The credits issued by the clean development mechanism executive board are called “ Certified Emission Reduction” and the industry can pollute the environment as more as its carbon credits or certified emission reduction credits are. And each certified credit is equal to one ton of carbon dioxide. But the commission justifies sale of certified emission reduction credits in fulfillment of the first objective of it. That means by the income which is assembled by credits sale the commission do development projects in Non Annex 1 countries. A comes in mind that why the “United Nations Framework Convention on Climate Change” do the development and take initiatives in Non Annex countries as they are already producing less carbon and other harmful gases. The approach of commission to justify it is that it is much more difficult and expensive to Implement the desired changes and initiatives in the Annex 1 developed countries than the non developed Non Annex 1 countries. And in this way the non developed countries will start with a good and clean and more efficient way as comparable to already developed ones. The heavy cost which the industries pays to buy the carbon credits leads the economy of the industry to think about the reduction of these gases or to device any possible mechanism to reduce the harmful gases and at least keep them on limits. On the other side the projects in underdeveloped countries leads to betterment of environment and in this way more increase in the pollution is given a shock by both Annex types. But according to actual performance of the clean development mechanism the second objective is not met properly. It has funded only projects like landfills and disposal type. They are good but the true reform is zero waste that means recycling, reduction, reuse, composition etc. On demand side sector this mechanism can be seen in another perspective. The production side of a country is facing a heavy fine on carbon credits buying and if the production side wants to maintain its production with no change in its emission level then the charges will penetrate the prices of goods and will eventually leads to same situation as it was before the introduction of this mechanism. If the industry invests in ways to reduce the emission level of green house gases then it may also effects the price for demand side. But if the production side is the Annex 1 group and the demand side is Non Annex 1 group then in this case we can say that the demand side is getting benefit in a way that their money is getting back to them and is used for their welfare and the nature. Further the clean development mechanism provides opportunities of jobs to the people of demand side area and the best point is that, it initiates a sense of self production of independence with respect to goods production. This all will lead a country eventually to a prosperous future and a less polluting production system and a good environment.

References:
1. What is clean development mechanism by “Marie Marciano” for Global alliance for incinerator alternatives. Official website:www.no-burn.org/climate 2. The clean mechanism development guide 2009 Copyright © 2009 by Isaura Frondizi, Rio de Janeiro, RJ/ Brasil 3. CDM methodology booklet information including EB56 november 2010 by UNFCCC

4. 2010 the CDM and sustainable development by “Jaison Gordon” Evans school of public affairs PB AF 608C 5. Introduction to Kyoto protocol and CDM by official websie of UNFCCC http://unfccc.int/kyoto_protocol/items/2830.php