Policy and Projects: Reduction of Carbon Emissions in the Manufacturing Industry in South Asia

Abstract

This study investigates manufacturing industry carbon reduction policy based on sustainable developmentcriteria for Clean Development Mechanism (CDM); one of the three Emissions Trading System (ETS)mechanisms. Based on the manufacturing industry CDM projects undertaken in the South Asian countries, it alsoexplores the growth of Certified Emission Reduction (CERs) in relation with Estimated Emission Reduction(EERs) for the period between 2006 and 2011. The study finds that the majority (90%) of the CDM projects inSouth Asian countries are based in India. The registered projects are mostly concentrated on fuel switch orenergy efficiency of which less than half (44%) belong to the Cement industry and about 24% belong to Brickmanufacturing industry. The study also finds an unstable trend of CERs (116% on an average) and weakcorrelation (30%) against EERs followed by low CERs (17%) and negative correlations about 33% againstcumulative EERs. This study recommends specific targets for the post 2012 period both for EERs and CERsfor the manufacturing industry in deciding carbon emissions targets to achieve maximum credits from emissionstrading.

Keywords: Sustainable Development Criteria, Emissions Trading System, CDM project, Estimated EmissionReductions (EERs), Certified Emission Reductions(CERs).