Mass-market U.N. carbon scheme finds favor in India

By David Fogarty, Climate Change Correspondent, Asia

SINGAPORE (Reuters) - A new type of U.N. scheme is spreading clean energy technology to millions of people in India, promising to cut carbon emissions and help investors earn valuable carbon credits.

Two leading carbon offset project developers in India say the scheme offers the promise of improving livelihoods and greatly expanding the reach and potential investment returns of the U.N.'s existing Clean Development Mechanism.

The CDM allows investors to build clean-energy projects, such as wind farms and solar power stations, in developing countries and earn carbon offsets in return. These can be sold on to help buyers in rich nations meet mandatory emissions targets.

But the CDM is hampered because it is based on the approval of single projects, which can take up to two years and is costly.

The expanded scheme, called program of activities (PoA), aims to allow the launch of identical emissions-reduction projects across a much wider user base in a single program, so cutting overall costs and simplifying the roll-out.

"India's the best place for PoAs. There's a lot of hunger to do these renewable projects because they know the government is committed," said Chandra Shekhar Sinha, head of environmental markets in Asia for J.P. Morgan.

The country of 1.1 billion people has large areas cut off from the electricity grid and is ideal for the deployment of clean energy via solar, wind or biomass, such as crop waste.

Areas that are linked often have old and inefficient lighting and powerlines that need upgrading and transport networks that need to switch to cleaner fuels.