Clean Development Mechanism

Clean Development Mechanism Strengthening Corporate Criminals & Climate Mafia in India Souparna Lahiri National Forum of Forest People & Forest Workers

CDM Projects • total projects today1207 • Registered projects 471 • Expected CERs - 239488K by 2012 • Total CERs of all projects by 2012 - 453741K • Total CERs by 2020 - 1152770K

Nature of Projects • Clean coal and super critical thermal Ultra Mega Power projects • Waste and corex energy generation steel projects • Dirty sponge iron projects • Wind energy projects • Small and large hydro projects • Waste to energy incinerator projects • Hydro fluorocarbon reduction projects • Paper and pulp

Corporates involved…the bigger ones • Jindal group • Tatas • Reliance – the Ambani brothers • Suzlon • ITC • Birlas • Bajaj • JCT • ESSAR • Major fluorocarbon companies

The windfall… • Till early 2008, the Jindal group made more than US $200 million (and perhaps more) from selling supposedly ‘reduced emissions’ (1.3-million CERs) at their steel plant in Karnataka • The Tata Motors sold 163,784 CERs from clean wind projects at 15.7 euros/CER in 2007. Their sponge iron projects in Orissa are set to yield 31,762 CERs every year • Reliance CDM Kitty—with 7 projects registered with 88,448 CERs per year (till 2007 December), four more CDM projects under validation with 149,533 CERs per year, and seven more potential CDM projects with about 400,000 CERs per year

…free gifts to corporates… • Biggest profits have been made by the SRF (Rajasthan) and the GFCL (Gujarat Flurochemicals Ltd), both by selling carbon credits from their HFC (hydroflurocarbons) reduction projects • In 2006/07 alone, the GFCL group’s earning from carbon money was twice its total corporate assets • Allain Duhangan HEP, (192 MW) funded by the World Bank is slated for a massive US $75 million in carbon credits

The notorious Jindals • Deals in energy, steel, sponge iron • Their biggest earning from Jindal Steel Works in Bellary, Karnataka • According to company sources, this boosted other incomes, and helped them to record their best ever quarter in terms of profit • considering the present issued-CER figures, the total earning from their ‘profitable’ clean projects can be anything between 2 to 3 billion US dollars! • According to another estimate, at the current market price of 15.5 euros per CER in early 2007, the company stood to gain 109-million euros over a 10-year period from the sale of CERs • JSW Steel is expected to ‘save’ on an average 0.77 million CERs per annum that can be sold in the open market, which means that the company would hold on to its CERs in wait of even bigger ‘profit’

…field reality… • Jindal’s Bellary plant at Torangulu, one of the biggest CDM projects • A glittering empire complete with its own airport, tree-line avenues, and a huge sprawling campus guarded by a private security force. • Built on displacement without compensation • Fraudulent land transfers and promises of job • Grabbing more village land every year • Ruining villagers’ crops and water source by dumping toxic pollutants

Torangulu villagers say… • Day in and day out, the smoke from the plant blackens their homes and whatever little crop is grown. • The effluents from the plant drains into the water the villagers use, polluting it beyond redemption: 'It is dust, dust, and dust’ • ‘The plant is like a foreign land that permanently shuts us out, and we get nothing but misery out of it'

Tata winde energy plants… • Suzlon is the developer • The lands were acquired forcibly or fraudulently, even forest lands without any prior NOC from the forest department • protests were short-lived. The company is too powerful for the likes of the tribal villagers of Satara or the semi-nomadic tribes from the Tungabhadra reservoir area to put up any organized and prolonged resistance • These are monsters that make so much noise that we cannot sleep at night…the children are going deaf, and even the wild animals that lived in the hill forests are straying down to the village and raiding crops! One gypsy woman said • They cannot go to the hills any longer to collect fuel wood or to graze cattle. • The company says it is their forest now, and anybody found entering it will be fined or arrested • The villagers own land ahs now been turned in to a fortress with private security guards

A clean reputation • The village of Sanajahanpur has lost almost all its agricultural land and pasture • the headman of the village says that the company has 'duped and fleeced' him • The company made so many promises: jobs to every villager, good roads, money for the village temple, new school buildings, health facility, and so on. • Nothing materialized. • ‘The company simply took our land, and posted security guards everywhere so that we cannot use it anymore.' • the land deal was not even legal because they still retain the legal ownership of the land • This is the'celebrated' Tata windmill project, which has earned such a 'clean' reputation that it not only sold carbon credits worth billions of rupees through the Kyoto market mechanism, but was also subject of non-Kyoto voluntary 'offset' certificates

Sponge iron CDMs – the dirtiest • There are a total of 66 sponge iron CDM projects • Mostly in Orissa, Chhattisgarh andWest Bengal • Run by the Jindals, Bhushan Steel, the Birlas and a host of other companies • the skyline full of chimneys belching foul, noxious smoke, the rivers red with toxic effluents, the hills deforested - • Operating often without any knowledge of the pollution control authorities, without any proper clearances! • Agricultural fields, drinking water source, village ponds all polluted from toxic effluents • Have hired guards and goons, terrorise protesting villagers • The workers in the projects are mostly temporary wage workers earning merely US $50 to 100.

The fraud of hydro CDMs • There are 98 hydro CDMs and the number is ever increasing • From small and micro hydels the applications have now included large hydros • Himachal Pradesh, a Himalayan state has the largest – 28 projects • Their additionality is suspect since the Govt. of India’s Ministry of New and Non-renewable Energy provides 40 per cent subsidy already to small and micro hydel projects • The CDMs are merely topping their profits • The companies are largely new, often offshoots of infrastructure companies

The Allain Duhangan fraud… • 1993: The project developer signed the memorandum of Understanding with the Himachal Pradesh govt. • 1996: The Environment Impact Assessment conducted • March 1996: The Central Electricity Authority (CEA) gives in principle Techno Economic clearance (TEC). • This means that the project is economically viable. • Aug 2002: The CEA gives final TEC, following an application by the project authority in May 2001 • And after that the developer applies for CDM! • Gets it registered

Now comes the Ultra Mega Projects… • Two current Ultra Mega Power Projects run by coal in pipeline • Reliance Sasan Project and the Tata Mundhra Project are both 4000 MW capacity each • Which means more coal mining, more displacement, more pollution • But, the clean coal and super critical technologies that they will use is now acceptable under UNFCCC regime

What India’s National Action Plan says…. • The NAPCC notes that 32% of the projects registered with UNFCCC’s CDM Executive Board come from India and 28.3% of the Certified Emission Reductions (CERs) issued came from India. • The expected investment from the 753 projects approved would be Rs 1069 billion. • The NAPCC also notes that CDM has not led to technology transfer from the developed countries • It also notes that high transactions costs prevent the small scale sector from participating in CDM. • Despite this, the NAPCC is happy that “there is encouraging response from the Indian entrepreneurs to the CDM across different sectors and is hopeful that the market in the VERs (Verified Emission Reductions) also will grow in future.

Finally… • Whose investments are helping these climate mafia and rogue corporates • India has around 40 per cent bilaterals in CDM • Financed by United Kingdom, Switzerland, the Netherlands and Japan. • Other countries involved are Sweden, Germany, Spain, Italy, Austria, France, Canada, Denmark,Finland

Clean Development Mechanism