GLOBAL warming, climate change and their ilk seem to have become buzz-wbitTs foT our intelligentsia in recent times. At any given time, we have several conferences, seminars and projects that give us the same bad news in different packages. This is, no doubt, fueled partially by generous funding from donor agencies and developed countries (guilt does loosen up the purse strings!). The upshot of this flurry in scholarly activity has been the clarification of a few facts that I will now proceed to bluntly state:

• Bangladesh is going underwater, make no mistake about it, surely but slowly it will happen (if you believe the IPCC and Nasa reports).

• There is very little we can practically do about it (besides lamenting and venting our frustration at appropriate global forums).

• There is going to be a lot of funding for adaptation and mitigation to delay the inevitable (which partly explains our recent preoccupation with these issues).

Given the rather unpalatable set of climatic eventualities that we are

faced with (along with our own man-made ones!), we can choose to bewail our miseries to whomever so will listen or make the best out of a bad deal. To borrow an old adage: If life gives you a lemon, make lemonade." Precisely such an opportunity to make some lemonade is presented by the Clean Development Mechanism (CDM) under the Kyoto Protocol in the form of provisions for carbon trading.

The CDM allows developed countries (as listed in Annex-B of the Kyoto Protocol) to achieve part of their emission reduction obligations by investing in projects in developing countries (non-Annex B) that reduce greenhouse gas (GHG) emissions. Since GHG reductions are measured in terms of carbon dioxide, this has been aptly called carbon trading. These reductions are then converted to Certified Emission Reductions (CERs), which can be then be sold to developed countries.

The process

A company from the developed country, or its local partner, that wishes to get credits from a CDM project must first submit the project for approval to the Designated National Authority (DNA) in the

host country. Bangladesh has a two tier DNA consisiting of the CDM board, which gives final approval after it has been recommended by the second tier CDM committee. The proposal is tffdrl $ut liefo?c,thr‘ CDM Executive Board (EB), which is designated by the United Nations Framework Convention on Climate Change (UNFCCC), to approve the award of CERs. The. applicant must prove that the project and the resulting emission reduction would not have happened anyway, i.e. establish "additionality."

The projected future emissions in the absence of the project is recorded in a baseline to compare with the emission with the project in place. The case is then validated by an external auditor, known as the Operational Entity (DOE), which has been approved by the UNFCCC. If a project is approved, the EB issues CERs, or carbon credits, where each unit is equivalent to the reduction of one metric tonne of carbon dioxide (CO2).

What's in it for us?

In the case of developed countries, emission reductions are infinetely cheaper to implement in developing countries as opposed to their own countries. The buyer of the

CERs thus fulfills his emission reductions at a cheaper cost. But, given the bureacratic tangles involved in getting a project approved by the EB, we have to be certain that the costs outweigh the benefits.

In this regard, the seller (developing countries) also has sufficient incentive to participate as collaboration leads to transfer of "clean" technology and makes previously unfeasible environmentally projects financially viable. Given that funding under the CDM runs into the billions it is well worth our effort and time to see if we can get a piece of the pie.

Where do we stand?

CDM projects have had a quite start in Bangladesh, with several local NGOs implementing projects in areas such as landfill gas and composting, promotion of energy efficient lamps, solar energy, etc. These projects were implemented with the technical help and participation of developed countries and international NGOs. However, the number of projects being implemented or in the pipeline remains low. The absence of the industrial and corporate sector in CDM projects to a large extent is also felt.

It can be safely said that the prospects of carbon trading have

not been able to capture the imagination of our businessmen, as they have in other countries. One of the stumbling blocks seems to be their lack of awareness about the possiblities under CDM. The CDM board has so far registered 1130 projects and issued over 170,493,201 CERs till date. For the 39 developed countries categorised under Annex B the first binding emission reductions must be achieved, between £008-2012. CDM thus" takes on a riew level of importance, with an acceleration in projects anticipated in the currentperiod.

Bangladesh could be one of the beneficiaries of this new period of carbon trading if we get our act together. The burden cannot fall on a few concerned NGOs but must encompass the government and the business sector as well. Policy makers must put in place more streamlined procedures in applying for national approval from the DNA, with the latter taking the lead in generating more innovative projects that attract investment from buyers of CERs. Waste management, afforestation, carbon sequesteration and renewable energy are some of the potential sectors in which we can earn CERs. Some might ask if it is really worth the effort to develop these sectors? I mean, after all. we are going to drown. But at least we will have some lemonade to drink while we go down.

Navil Mansur Chowdhury is a lecturer in the Department of Economics & Social Sciences, Brae University.

***To borrow an old adage: "If life gives you a'lemon, make lemonade." Precisely such an opportunity to make some lemonade is presented by the Clean Development Mechanism (COM) under the Kyoto Protocol in the form of provisions for carbon trading.***