Upsetting the Offset - Transnational Institute

Upsetting the Offset
been met. Nor is there any hint of a rural development programme to show that
the company is bothering at all about those promises.
The MSPL did not even bother to conduct the necessary consultation
process with the local population, village panchayat, and the local elected body
of representatives before initiating the project. But the PDD claims to have
roped in the people in ‘playing a big role in mitigating the climate crisis’ by
directly participating in this CDM project. In reality, the local residents are not
even aware about the nature and activities of the project, let alone concepts of
CDM and carbon trading. Since the project has just led to a lot of woes for the
people instead of benefitting them, the local populace hate the project.
However, the wind mill project is reaping huge profits both by selling electricity
to the state grid and from its CDM component. On 12 February 2007, the
project was issued 267 666 CERs for the verification period 22 March 2004 to
31 March 2006. Other parties in the CDM project are the United Kingdom and
Northern Ireland. In monetary terms, this meant a windfall of no less than 4
million Euros (going by the average secondary CER price of 15 Euros during
early 2007), provided that the project had sold all its credits at that time.
So much money...for doing what? We have seen how the apparently benign
wind projects can usurp people’s commons and destroy livelihoods. We have
also seen how the nicely worded and sleekly laid out PDDs can be full of
unabashed lies. But, what about the tall claims of emissions reduction? Wouldn’t
the projects have come up anyway, with or without the CDM money? Is any
wind CDM project in India truly additional?
Additionality
The additionality of the wind energy CDM projects in India has always been
under the scanner mainly because of the existing subsidy regime – both the state
governments and the Government of India offer a range of subsidies to any
renewable energy project including wind mills. Besides, there is this stipulation
that the certain portion of the total electricity supplied to the grid and thereafter
distributed to industrial consumers has to come from renewable sources. The
UNFCCC has rejected a number of Indian wind projects on additionality
grounds, including a Bajaj Auto wind project from Maharashtra. Now that the
Indian government proposes to extend 1 incentives to wind farms for 10 years,
the additionality of all wind CDM projects becomes doubly suspect. Perhaps the
incentive move is due to the fact that wind is big business now; with the
presence of corporate giants like Tata, Reliance, ONGC, and Suzlon, the
government plans to extend GBI (generation-based incentive) to wind farms for
a period of up to 10 years. Under this scheme, benefits equivalent to accelerated
depreciation of 80 per cent at NPV (net present value) will be made available to
private investors every year. The move is supported by the Planning
Commission of India and the MNRE (Ministry of New and Renewable Energy),
in tune with the National Action Plan for Climate Change. Currently, the wind
mills can enjoy 80 per cent depreciation benefit only during the installation
period in the first year. However, the new move is likely to boost up wind
energy production considerably as the country plans to double its installed
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