India CDM Scam – Press Release


23rd November 2011



Rapid increase in atmospheric concentration of CO2 and other greenhouse gases (CH4, N2O, NO*) since about 1850 has raised numerous questions of global significance. For over 200 years, industries of the world have been transferring fossil carbon from underground deposits of coal, gas and oil to a more potent and rapidly active circulating carbon dump in the entire biosphere including the air, oceans, soil and the vegetation. If this trend goes on, and every year around six additional billion tons of carbon gets released into the atmosphere, then a time will come when earth would probably become inhabitable. It was the turn for the community of nations—especially developed countries who have been largely responsible for more than 60% of total greenhouse gases added to the biosphere in last hundred years—to take initiatives to reduce their carbon emissions.


The inter-governmental efforts which culminated in the Kyoto Protocol and a pledge to reduce GHGs in a time-bound manner raised hopes. But the post-Kyoto developments sadly belied those hopes, as instead of initiating definitive emission-cutting measures the protocol became an ‘environmental’ excuse for rich nations and their polluting, GHG-emitting Corporations to start a quixotic and absurd trade in the World’s climate, mainly its carbon–absorbing capacity. An environmental challenge, and a natural disaster of the greatest magnitude, turned into an economic opportunity for the rich and powerful of the world, and the absurd trade in GHG replaced the real and tangible measures that could have proved effective to actually combat climate change.

Carbon Trade is the formulae with which governments, corporations and consumers of the era of globalization propose to keep climate change at bay, and go about their businesses-as-usual. No physical or actual reduction of GHGs responsible for global warming takes place, and no consumer consume less. Yet, if we have to believe the Carbon traders, the trade is ‘working’, and we have the situation in control. Emissions are going down.

It is the worst lie ever told.

The Clean Development Mechanism (CDM), instead of ensuring real and measurable GHG emission reduction, has become an important part of the global carbon market that grew rapidly once the Kyoto Protocol came into force. Instead of promoting sustainable development in developing countries or resulting in actual emission reduction, during the last few years the CDM aroused only a worldwide interest in carbon investment; the ‘mechanism’, instead of providing incentives for a low-carbon and equitable growth trajectory in the industrially aspirant developing economies of the world, has become an instrument of the global carbon market as many said it was bound to be. Despite a current slump in the global market, in India CDM projects are still going strong in the sense that the number of projects seem to be increasing.

Ever since the unique mitigation strategy of carbon trading was conceptualized in the Kyoto Protocol, India seems to have been one of the busiest countries to put the concept into action. By the end of June, 2011, India had 645 CDM projects registered with the UNFCCC, 261 of which had already been issued 93834 kCERs. At that point of time, India accounted for 1603 CDM projects (it has since gone up to 1914, as of 8th November 2011), including the registered and CER-issued ones, with 922 at validation, and another 36 at various stages of registration. Taken together, the projects claim to reduce a whooping 444293 million tonnes of CO2 equivalent by 2012(meaning that the same amount of tradable CERs will be credited to the projects, if UNFCCC registers them all). The corresponding figures for 2020 are 1516432 ktCO2meaning that, taken together, the projects will reduce about 1520 million tonnes of Green House Gases. Looking at India’s CDM scenario in terms of corporate participation, we find that the energy efficiency sector, including HFC, is generating the maximum CERs. Big corporations such as Tata, ITC, Reliance, Ambuja, Birla, Bajaj, GFL, HFL, NFIL, and many others, who ritually emit millions of tonnes of carbon dioxide into the biosphere earn handsome returns in the name of ’clean development mechanism’. The current market price of a ton of CO2 reduced and sold in form of CERs in the global market is anywhere between 6 and 10 Euros, even in this ‘bearish’ situation, whereas the most optimists of carbon consultants would not have given more than 5 dollars in 2005!

The corporate hegemony over Indian CDM seems to be no less than absolute. Profits not only from large industries hosting energy-efficiency projects, but also relatively low-key and ‘sustainable’ renewable-energy projects in the biomass and wind sectors went to the corporate sector up to 16th May 2011, corporations collared about 90 percent of the country total of 8108 kCERs issued to biomass projects, and they also own most of the CDM wind projects in India.

Some of the profit figures for companies engaged in the carbon trade are astounding. Till early 2008, the Jindal group made 11-billion rupees (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. Tatas’ sponge iron projects in Orissa are set to yield 31,762 CERs every year. Reliance publicly boasts of its CDM Kitty—with seven registered projects with an annual CER-potential of 88,448 (till 2007 December),four more CDM projects under validation with an annual total of 149,533 CERs, and seven more potential CDM projects to generate about 4 lakh CERs per year. In 2007/08 alone, the GFCL group’s earning from carbon money was thrice its total corporate profits (after tax).

The main problem with these projects’ claims of reducing GHG Emissions is that there is no credible way to verify these claims. Dirty and utterly ineligible projects routinely sail through, without bothering to clean up their acts. Though the projects are ‘validated’ by overseas ‘agencies’ like DNV, who certify that the projects validated by them are ‘in effect’ reducing emissions, there is no monitoring of the validating agencies themselves, many of whom have been accused of half-done and highly manipulative jobs.

Though there is a proviso in the CDM mechanism that the projects must result in all-round sustainable development and benefit communities where those are located, the CDM projects in India barefacedly violate the sustainability criteria. Because the Indian government doesn’t have any regulatory mechanism to enforce compliance, this practice goes on unchecked.

Instances of irregularities and fraud cut across sectors. Several large thermal power plants in India have applied for CDM status of late and two of those are already registered with UNFCCC (the Tiroda Plant by the Adani group, and the Sasan Plant by the Reliance) despite complaints of large-scale land grab and rampant pollution at the project sites in Maharashtra and Madhya Pradesh(see case studies).

Irrespective of sectors, all CDM projects the present Report covers so far display a surprising uniformity in community level impacts: they pollute (large and small industrial projects including the so-called ‘clean’ biomass power projects), displace (‘renewable’ and ‘green’ wind power and large and small hydro, large industrial projects) and destroy or enclose commons (forests, agricultural fields, pastures). Not a single project was found to yield any discernible benefits for the local economy, society and environment. CDM projects generated no new jobs apart from a few temporary posts of security guards here and there, and all tall talks of corporate social responsibility etc disappeared once a project got going.

The Research Report titled The Indian CDM: Subsidizing and Legitimizing Corporate Pollution raises these issues and questions. Edited by Soumitra Ghosh and Subrat Kumar Sahu, the Report contains the findings of a study that looked at 34 CDM projects spread in 8 Indian States, especially the impacts of such projects on local communities, apart from a detailed analysis of the Indian CDM Scenario. The Research was done by National Forum of Forest People and Forest Workers (NFFPFW) in collaboration with NESPON and DISHA, both environmental groups based in West Bengal.

At a meeting was jointly organized by NFFPFW, Focus on the Global South and SANDRP, the Report was formally released in Indian Social Institute, Delhi on 23rd November, by Praful Bidwai, the noted columnist.

The Report Release program was jointly organized by the National Forum of Forest People and Forest Workers, Focus on the Global South and South Asian Network of Dams, Rivers and People.

Released Jointly By NFFPFW, NESPON and DISHA    


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