Unilateral Clean Development Mechanism for Sustainability
4 Pages Posted: 21 May 2014
Date Written: May 20, 2014
The feasibility of Brundtland Commission sustainable development as "development that meets the needs of the present, without compromising the ability of future generations to meet their own needs" is a flying pig in case of Karnataka as it is passing through 27 percent power shortage at present. The fact that has iron out this problem to an extent is Kyoto Protocol Clean Development Mechanism (CDM) that provides for emissions reduction projects which generate Certified Emission Reduction (CER) units which may be traded in carbon markets which contributes to sustainable development. The paper deals wind power venture at Mundargi in Gadag, district of Karnataka, having a wind power generation capacity of 42.5 MW. Under this project, agreements are made for VRL, to install wind turbines of total capacity 42.5 MW at Mundargi in Gadag at its own cost. The construction/up gradation of the interconnection facilities, the transmission lines and the receiving station were also to be carried out by VRL. The power generated at the wind turbines was to be purchased by HESCOM at the preferential price of rate per unit of Rs 3.40 paisa. The paper provides evidence that in the absence of CDM benefits the project would not have been implemented because of investment barrier and it would not have been possible for the government of Karnataka to come out with a preferential tariff structure for the power generated in wind based power plants. Finally an analysis of how CDM project could contribute to sustainable development and criticism where this project can be improved is dealt in detail.
Keywords: Clean Development Mechanism, CER Trading, Preferential Tariff Structure, Certified Emission Reduction (CER)
JEL Classification: F00
Suggested Citation: Suggested Citation