CDM Reforms Needed for Green Buildings

by Joydeep Gupta

Poznan (Poland), Dec 6. A five-star hotel and an office complex in Kolkata went green in various ways but their applications to be registered under the UN's Clean Development Mechanism (CDM) so that they could be paid for their troubles were rejected for no fault of theirs, an official said here Saturday.

"It shows that the CDM needs reform," Mark Radka, head of the energy branch in the United Nations Environment Programme (UNEP), told IANS.

On the sidelines of the Dec 1-12 UN Framework Convention on Climate Change (UNFCCC) summit, Radka was releasing a UNEP report on how the CDM has failed to take care of the building industry.

The two Kolkata buildings - the ITC Sonar Bangla Hotel and the commercial building Technopolis - were among the four studied by the UNEP worldwide to see why only 10 out of 4,000-odd proposed CDM projects were from the building sector - and why even fewer of those had been approved.

"And this is in a situation where one-third of all greenhouse gas (GHG) emissions are from buildings," Radka pointed out.

GHG emissions, mainly carbon dioxide, are leading to climate change that is already affecting farm output, leading to more frequent and more severe droughts, floods and storms and raising the sea level, with developing countries bearing the brunt of the effects.

The UNFCCC built the CDM so that green projects in developing countries could be rewarded by giving them carbon credits, that they could then trade for money through international carbon markets.

But the CDM has been structured keeping large factories in mind, and the building sector finds it almost impossible to use, Radka said. "The problem is that in each building, energy savings are through small measures that add up to a lot. But each individual energy saving is very hard to measure and to monitor regularly, which is what the CDM management wants."

The other problem is more fundamental. The CDM was meant to encourage green projects that would not be taken up if this extra money was not available. How does one say if a builder, or an individual living in a house, would not put in extra insulation or a CFL lamp unless he knew he would get money from CDM?

The management of the ITC Sonar Bangla Hotel retrofitted its air-conditioning system, pumps and sewage treatment system to increase energy efficiency, replaced electric water heaters with solar alternatives and also used waste heat to warm the water for its guests.

The hotel saved 3.42 gigawatt hours (GWh) in the first year, which by CDM calculations translated to reducing carbon emissions into the atmosphere by 2,987 tonnes.

But the monitoring agency appointed by the CDM board could verify carbon emission savings of 1,886 tonnes only, because the other steps taken were individually too small to measure. That did not make it worth the while of the hotel management to go through the complicated administrative process of applying for CDMs in the first place.

Technopolis is an office complex that has got the gold-level certification for an energy efficient building from the US Green Building Council. Its 14 floors were rented out within five months of the completion of construction in 2005.

In May 2007, the builder applied for CDM approval, largely for further recognition as a green building, says the UNEP report. The various energy efficiency features installed in the building save an estimated 8.37 GWh per year, which means its reduces GHG emissions into the air by 8,724 tonnes a year.

The problem was that the building was already there, with all green features installed, when the builder applied for CDM approval. There was a question on whether he could prove that he would not have done all this if he did not get CDM approval.

The approval is pending. A supermarket chain in Sao Paulo and a housing project in Cape Town are in the same boat.

At the ongoing Poznan summit, CDM reform is one of the important items on the agenda. Radka suggested four reforms:

* Move towards performance-based measures from project-based measures; for example look at energy use in a given area and to what extent it has been reduced.

* Use sampling for verification, as it is obviously prohibitively costly to check if 10,000 homes all have CFL lamps installed in them.

* Make the baselines from which you calculate energy savings performance-based too.

* Allow CDM to reward governments that enact tighter building standards.