Financial Daily from THE HINDU group of publications
Saturday, Oct 22, 2005
Agri-Biz & Commodities
Industry & Economy - Environment
Most rubber estates may not get carbon credit
Vipin V. Nair
Kochi , Oct. 21
EVEN as the natural rubber industry prepares itself to pitch for trading in carbon reduction under the Kyoto Protocol, most of the existing rubber plantations in the country are unlikely to qualify for trading in certified emission reduction (CER).
This is because the United Nations Framework Convention of Climate Change (UNFCCC) stipulates that to qualify as a clean development mechanism (CDM) project, an afforestation or re-forestation activity should take place on those lands that did not have a forest as on December 31, 1989.
UNFCC, the international treaty under which the Kyoto Protocol was agreed upon by 35 developed nations, defines a forest as a single minimum area of between 0.05 to 1.0 hectare with a tree cover of 10 to 30 per cent and with trees having the potential to reach a minimum height of 2-5 metres at maturity.
This rule will automatically disqualify a large chunk of the existing rubber plantations since they would have been in existence much before the cut-off date set for CDM projects. Replantation too is not eligible for trading in CERs under the rule.
"Most of the existing plantations in Kerala would not get CERs," said Dr James Jacob, Deputy Director, Rubber Research Institute of India (RRII). Kerala accounts for over 83 per cent of India's 5.74 lakh hectares of rubber plantations.
However, Dr Jacob said rubber plantations that come up on degraded land, where there was no tree cover as on December 31, 1989, such as those in the North-East region, would qualify for trading in CERs.
He said unlike in the case of CDM projects in industries, afforestation and re-forestation activities have an uphill task getting the recognition as an eligible CDM project.
"It is not easy to verify (an afforestation/-reforestation activity as CDM project) as in the case of a factory where such a project is on," Dr Jacob said.
Apart from plantations, a host of other activities related to rubber, such as using effluents from sheet rubber processing units to generate biogas, would also qualify for CDM projects.
Rubber trees have very high carbon sequestration capabilities. RRII has worked out that one hectare of rubber plantation can sequestrate about 165 tonnes of carbon over a 21-year growth period of rubber trees, thereby earning as much as 605 CER a hectare that can be traded.
This carbon is equivalent to 605 tonnes of carbon di-oxide. One CER is taken as one tonne of carbon di-oxide or its equivalent of other green house gases (GHG) that is prevented from being released into or removed from the atmosphere.
The Kyoto Protocol to the UNFCCC mandates developed countries to bring down green house gas emissions to 5.2 per cent below the levels prevailed in 1990, by 2012.
One of the three mechanisms the Protocol has put in place is CDM, under which developed countries that need to reduce GHG emissions can contribute to environment-friendly projects in developing and least-developing countries.
The countries that have the emission reduction obligations can trade in CERs and use them to partially meet their targets. Currently, one CER is being traded at the rate of 12 to 15 euros.
Meanwhile, according to Dr N.M. Mathew, Director of RRII, the institute has now set up a task force, comprising various stakeholders of the rubber sector, to evolve the methods for getting CDM funding.
The first meeting of this task force would take place next month, he said.
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