{ "docId": "019dd923-5e88-73ef-bd59-6131f37efc2b", "docSlug": "71b5b657f034a972", "documentTitle": "ey net zero centre carbon offset publication 20220530", "authorId": "MorganStanley", "authorName": "Grantham Research Institute", "documentKindSlug": "consulting-deck", "documentKindLabel": "Consulting deck", "sourceTypeSlug": "equity_research", "sourceTypeLabel": "Equity research", "presentationDate": null, "orientation": "portrait", "aspectRatio": 0.707, "pageNumber": 7, "pageCount": 45, "prevPage": 6, "nextPage": 8, "slideType": "section_divider", "function": "establish_context", "density": "overcrowded", "nDataPoints": 6, "notes": "This is a text-heavy academic or report page serving as a section introduction.", "elementsJson": [ "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-5e88-73ef-bd59-6131f37efc2b/7", "deckHref": "/decks/019dd923-5e88-73ef-bd59-6131f37efc2b", "deckJsonHref": "/decks/019dd923-5e88-73ef-bd59-6131f37efc2b.json", "deckAnchorHref": "/decks/019dd923-5e88-73ef-bd59-6131f37efc2b#slide-7", "components": [ { "bbox": { "h": 0.085, "w": 0.784, "x": 0.108, "y": 0.435 }, "kind": "paragraph", "text": "From a project developer's perspective, the CDM is much like any other subsidy program. Although developers don't receive money directly from the UN, they do receive valuable CERs that can be exchanged for money on the open market, including through the sale of carbon offset futures. It is the promise of this extra money that was intended to lure developers to build more renewable energy projects than they otherwise would have.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1e770f43-99a2-475d-bab5-cfc21cd58ff7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.186, "w": 0.784, "x": 0.108, "y": 0.528 }, "kind": "paragraph", "text": "The CDM has been an extremely popular program. By 2030, it is expected that the CDM will have issued up to 11.8 billion credits, equivalent in magnitude to the total emissions of the United States and Europe in 2019. China (6.55 billion), India (1.32 billion), and Brazil (0.7 billion) account for over 70% of these credits. Over half of all CERs finance just two types of projects: hydro power (27%) and wind power (24%), the latter being the focus of our study. It has been estimated that the CDM has supported over $90 billion of renewable energy investment in developing countries, or roughly 13% of their total renewable energy investment (Kossoy et al., 2015). Although the CDM is now no longer accepting new applications, the Paris Agreement promises to expand the program under a new name: the Sustainable Development Mechanism.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "20b68300-5380-4b54-ac92-b282285af7a7", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.048, "w": 0.784, "x": 0.108, "y": 0.133 }, "kind": "paragraph", "text": "In this section, we provide relevant institutional details about the CDM, discuss how marginal and infra-marginal projects are distinguished in practice through the registration process, and provide background information on the Indian wind power sector.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "52299e13-54c3-42ce-bf49-8252b5293b3b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.186, "w": 0.784, "x": 0.108, "y": 0.241 }, "kind": "paragraph", "text": "The Clean Development Mechanism (CDM) is the largest pollution offset program in the world. It was established as part of the Kyoto Protocol in 1997. Under this program, industrialised countries that had committed to reducing emissions domestically were permitted to meet some of their obligation by developing or financing equivalent emission reductions projects in developing countries. This additional flexibility ostensibly achieves the same global emissions reduction at a lower cost. In practice, the exchange of financing and emissions would be accomplished by the UN issuing Certified Emission Reduction (CER) credits to approved projects in developing countries, each CER signifying one avoided tonne of carbon dioxide. Those credits could then be sold to regulated firms in developed countries and counted towards their country's Kyoto target.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ad07cba4-72b8-4e4c-8eaf-88d9d722c468", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.223, "w": 0.784, "x": 0.108, "y": 0.722 }, "kind": "paragraph", "text": "To register under the CDM, a project had to go through two stages of evaluation. First, project developers would initiate the process by writing a Project Design Document (PDD) describing the project and proposing a demonstration of \"additionality.\" In this context, \"additionality\" means that the project is expected to reduce emissions below the business-as-usual trajectory. A Designated National Authority (DNA)—in India, the Ministry of Environment and Forests—then evaluates whether the project, as described in the PDD, meets the CDM requirements, which include \"additionality.\" Second, the CDM Executive Board, which supervises the CDM globally, decides whether or not to register valid projects submitted by the DNA. If a project is approved, the developer starts receiving CERs as soon as it starts delivering emissions reductions—a hydroelectric", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "efa64184-04c7-4fb4-adcc-be8f5707f980", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.016, "w": 0.355, "x": 0.108, "y": 0.208 }, "kind": "title", "text": "2.1 The Clean Development Mechanism", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c6d0dd3e-177e-4a89-a3c2-f922df5e2234", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.021, "w": 0.355, "x": 0.108, "y": 0.093 }, "kind": "title", "text": "2 Institutional Background", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "e53c9b05-baae-459f-bb8b-47c50d35b56f", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [ { "name": "Section divider", "slug": "section-divider", "agent": null, "layer": "slide", "matchId": "43a76c78-1198-4bf9-b80e-ccce57ae7996", "evidence": "The slide is labeled as '2 Institutional Background' and serves as a divider between sections.", "confidence": 0.9 } ], "frameworks": [], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }