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Sweet carbon: An analysis of sugar industry carbon market opportunities under the clean development mechanism

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  • McNish, Tyler
  • Jacobson, Arne
  • Kammen, Dan
  • Gopal, Anand
  • Deshmukh, Ranjit

Abstract

Bagasse power generation projects provide a useful framework for evaluating several key aspects of the Clean Development Mechanism of the Kyoto Protocol. On the positive side, our analysis, which draws in part from a data set of 204 bagasse electricity generation projects at sugar mills, indicates that these projects provide Annex I country investors with a cost-effective means to achieve greenhouse gas emissions reductions. Our analysis also confirms that the marketplace for Clean Development Mechanism-derived offsets is robust and competitive. Moreover, bagasse projects appear to provide a positive example in a "new wave" of clean energy investment that has replaced the earlier industrial gas projects. At the same time, we also identify two aspects of the CDM that demand improvement. First, the additionality standard needs to be tightened and made more transparent and consistent. Financial additionality should be required for all projects; however, any financial additionality test applied by the Clean Development Mechanism's Executive Board must be informed by the significant barriers faced by many projects. Second, the administrative processes for registration and verification of offsets need to be streamlined in order to prevent long registration time lags from chilling clean energy investment.

Suggested Citation

  • McNish, Tyler & Jacobson, Arne & Kammen, Dan & Gopal, Anand & Deshmukh, Ranjit, 2009. "Sweet carbon: An analysis of sugar industry carbon market opportunities under the clean development mechanism," Energy Policy, Elsevier, vol. 37(12), pages 5459-5468, December.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:12:p:5459-5468
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    References listed on IDEAS

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    1. Jane Ellis & Sami Kamel, 2007. "Overcoming Barriers to Clean Development Mechanism Projects," OECD Papers, OECD Publishing, vol. 7(1), pages 1-50.
    2. repec:wbk:wboper:13404 is not listed on IDEAS
    3. Restuti, Dewi & Michaelowa, Axel, 2007. "The economic potential of bagasse cogeneration as CDM projects in Indonesia," Energy Policy, Elsevier, vol. 35(7), pages 3952-3966, July.
    4. Karan Capoor & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2008," World Bank Publications - Reports 13405, The World Bank Group.
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    1. Yasar, Abdullah & Ali, Aleena & Tabinda, Amtul Bari & Tahir, Aleena, 2015. "Waste to energy analysis of shakarganj sugar mills; biogas production from the spent wash for electricity generation," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 126-132.

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