Carbon Credit projects can be very relevant for the socio-economic benefit of the rural people in India and South Asia and other developing countries, but as mentioned, in the present form it faces many problems and barriers. At present the CDM, Gold Standard and other registering bodies of the carbon credit projects, use the mechanism which are not only too cumbersome, but also time consuming, as it takes as much as 3-5 years.
Presently, it is very heavily loaded in favour of highly paid external consultants, as it involves detail documentations, baseline survey and other regular field surveys, validation, verification and monitoring etc. Because of all these the transaction cost becomes too high and the main project developer has to be on the mercy of these high-fi external consultants, not knowing till the end (which could take up to 3-5 years or more durations) whether the carbon credit project will be approved for registry or not? For any reasons the project falls through at any of the stages, the project developer has to pay heavily, and if a small developer is involved, it can lose, both money and become bankrupt, as well as lose credibility with the other stakeholders. In this process the real stakeholders (project developer/holder and the local NGOs with meagre resources as well as the poor end users) suffer, and mistrust is generated amongst them due to these delays.
It is very clear that the whole process of registering the carbon credit projects has been designed by the registration agencies that it is time consuming and resource guzzling for the stakeholders, like the project developers, the members, partners and the end users. After clearing each step successfully one wonders if it was worth going through it, and whether the next step will be cleared or not?
The majority of NGO groups/NGOs network working in the developmental programmes/projects operate on meagre resources and try to reach the normally unreachable target groups in difficult situations. Their concern is to deliver the best to the target groups in as much cost effective manner as possible, as their resources, both in term of manpower and financial are very limited. At the same time, NGOs also have to maintain their credibility with the local people, as they have to continue working with them regardless of external support, as that is what they have choose to do. Therefore, in spite of good work, they could never do foolproof documentation of the entire process. On the other hand, the carbon credit projects are heavily loaded in favour of over documentation, perhaps not required so much for registration, but more to protect the registration agencies themselves and their reputation. Because of too much dependent on such approach, many very good grassroots projects which have very strong social dimensions perhaps will never get registered as Gold Standard projects, as the people managing and working for such groups are very far from the grassroots realities. For the household biogas plants, which is highly decentralised programme, and so much relevant to be considered for carbon credit, only those who have long practical experience of implementing such projects can understand the many socio-economic benefits which it provides to the rural communities, without even studying such elaborate documents like, PDD, Passport and other reports based on new studies by highly paid external experts.
From the step-by-step process of validation, verification for the GS registration for INSEDA biogas project, described above, it becomes clear that there is a need for capacity building of NGOs and other grassroots stakeholders involved in the carbon credit projects, to fully understand the requirements of the certification agencies which needs to be followed strictly. Most NGOs operating at the state level and the small stakeholders don’t have the expertise and resources to send their functionaries for capacity building for preparing the carbon credit projects and later on to complete the entire process leading up to registration. Moreover, the capacity building of NGOs and the other smaller stakeholders should be ably backed by good socio-technical organisation with expertise and experience in both theoretical and field level practical knowledge as well as financial resources to act as development oriented consultants for developing bundled carbon credit projects by combining a number of small scale decentralised units/systems. The job of socio-technical organisation acting as project consultant would also be required to do hand-holding as well as guide and assist NGOs and other stakeholders at important stages of the process and facilitate preparation of monitoring reports and answer all the queries of DOE and international registration agencies satisfactorily to ensure that the project fulfils all the requirements of the registration and issuance of VER/CER credits.
The average greenhouse gas (GHG) reduction per house biogas plant of 2 m3 capacity (if properly fed with cattle manure, and properly operated by its owner) would be 4 ton per year. Under the INSEDA biogas gas carbon credit project, over 4,000 household biogas plants, 1, 2, 3, 4 & 6 m3 capacity (mainly 2 & 3 m3 capacity) were included from the two states, namely Madhya Pradesh (MP) and Kerala. These biogas plants generates over 20,000 VERs annually. If the support were available then on an average of 10,000 house hold plants/year can be built by the NGO members and partners of INSEDA in these two states of India. 38 4. Conclusion and Recommendations When looking back, why we got involved in the carbon credit project for household biogas plant of INSEDA members and partners under the Gold Standard, and continued going through the cumbersome process for registering the project, the reasons were several.
Some of them being, INSEDA’s external consultants, were so good in marketing the idea of carbon credit that they sold us the moon in terms of this project, and also we were able to find a very credible and trusted buyer, the First Climate, as buyers. The First Climate signed the agreement with INSEDA in May 2008 to buy the VER generated from our bundled household biogas project, and ever since have been providing moral support. The FC also agreed to take care of some of the cost on validation, verification and registration etc., as well as provided INSEDA with some advance funds at the very advanced stage of verification and issuance of VERs. Their top executive even visited the project sites in MP, which is one of INSEDA biogas project states, to understand the project and realities at the grassroots level, meeting and talking with the local poor owners of the biogas plants about the direct and indirect benefits as well as made movie for awareness building of people in the western countries and for promotional aspects.
Another reason for continuation with the process and not giving up in the middle was because of the faith and expectations of our grassroots members and partners in INSEDA, who along with INSEDA had spent meagre resources for collection of data, field level information, documentation and in the development of this biogas project and in organising various stakeholders meetings as well as their own commitments to their end users, mainly the rural biogas plant owners. Therefore, in spite of five years of long wait we continued in the entire process and took it to the logical end.
In view of the above, we would like to recommend that the entire process of registration should be completely revamped, to cut down the roles of high cost external consultants, reduction in the transaction costs as well as reduction of project registration time by at least one fourth of the present duration. There is also a need for providing some kind of “Development Fund“ or ”Revolving Bridge Fund”, in the form of grant from the donor groups, which could be used for capacity building and sustain the NGO project holders and members and partner grassroots NGOs till the project is registered. The registering agencies should review the process to ascertain what pro-active role they can play and become NGO friendly and provide hand holding role, especially in the case of socially relevant carbon credit projects for highly decentralized applications. Based on over five years of process oriented involvement in developing its own carbon credit project, INSEDA now has in-house expertise and practical field experience to develop carbon credit project for registration by the international certification agencies, both CER and VER, using step-by-step process oriented approach. INSEDA can act either as socio-technical organisation for the capacity building of NGOs or provide consultancy to NGOs in develop carbon credit projects or act as partner organisation in any joint development of carbon credit project, starting from inception till the registration and issuance of VER/CER credits.