UNFCCC: Bhutan is expected to earn about Nu 3.7M (million) (56,000 euros) annually starting next year for reducing carbon emission, after it fulfilled the commitment made at the Kyoto protocol.
This was made possible after the rural electrification project got registered as a ‘clean development mechanism’ (CDM) project, the biggest trans-boundary CDM activity under UN framework convention on climate change (UNFCCC).
The mechanism was developed by the UNFCCC under the Kyoto protocol of 1997. Under the protocol, countries committed themselves to reduce their overall emission of six greenhouse gases by at least 5 percent.
Environment officer of the department of renewable energy, Tandin Wangmo, said that the protocol allowed developing countries to develop carbon-reducing projects and earn carbon credits, which can be sold to industrialised countries that have commitments to reduce carbon emissions.
“Clean development project is trying to gain carbon credits from the rural electrification project,” she said. Carbon credits are permits or certificates that allow the holder to emit one metric tonne (MT) of carbon dioxide per credit. The credits generated from this project will allow the buyers to emit 18,933MT of carbon dioxide annually.
Each MT of carbon emission reduction is expected to fetch around 2-3 euros, depending on the market.
Tandin Wangmo explained that, prior to the electrification of about 30,000 rural households, they used fuel sources, such as kerosene, fuelwood and diesel, which were polluting in nature. Once they are connected to the grid, their energy source will be hydropower that is considered clean.
“There is carbon reduction during the switch in energy sources,” she said.
For instance, Punatsangchu hydroelectric project I (PHEP-I) is expected to earn about Nu 1.4B (billion) worth of foreign currency annually upon commissioning, in exchange for carbon credits.
The amount is estimated after the sale of an estimated 4.3M certified emission reduction credits.
The carbon-crediting period began since November last year until October 2021.
By Nirmala Pokhrel