A Decision support approach for the sustainable transfer of energy technologies under the Kyoto Protocol

American Journal of Applied Sciences, Dec, 2008 by Charikleia Karakosta, Haris Doukas, John Psarras

INTRODUCTION

The Kyoto Protocol contains market mechanisms that enable industrialized countries to invest in greenhouse gas emission (GHG) reduction projects on the territory of other countries, either developing, or industrialised, such as the Clean Development Mechanism (CDM) and the Joint Implementation (JI) (1).

Given the double objective of the CDM-GHG emission reduction and enhancing sustainable development-a typical CDM project would bring together industrialised countries' demand of GHG emission reduction credits and developing countries' demand for sustainable (energy) technologies and other means to achieve development goals. Ideally, a CDM project would therefore be based on a clear assessment of the GHG emission reduction potential and a clear assessment of the technology needs and development priorities in the host country. Actual CDM practice, however, has shown that such projects are largely initiated by the demand for relatively low-cost Certified Emission Reductions (CERs), leading to a series of adhoc projects, rather than serving the overall policy objectives of the host countries.

This has among others resulted in a situation in which the distribution of projects across developing host countries is rather skewed towards a small group of countries that have taken between 80 and 90% of the CDM market as suppliers of projects and (expected) emission reduction credits. The latter is shown, in Fig. 1, which shows the amount of CERs issued based on ongoing CDM projects. As it can be seen India, China, South Korea and Brazil have thus far supplied 90% of issued CERs, (actually realised GHG emission reductions which have been verified and issued by the CDM Executive Board). In terms of expected credits (emission reductions expected from projects planned or ongoing), China, India, Brazil, South Korea and Mexico (in that order) presently have a share of 84% of the pipeline; in terms of proposed projects, this percentage is 79% (2), (3). Consequently, although the pipeline of CDM projects contains a large number of projects, there is no equal distribution of projects across the world.

[FIGURE 1 OMITTED]

Based on domestic, business as usual priorities and needs, countries may choose an energy technology profile that may not be the best in terms of delivering long term sustainability and GHG reductions, since sustainable technologies are not included or even considered. The CDM could help raise the energy profile of a country towards the first-best level, provided that the host country has in place a well-developed strategy for sustainable energy technology implementation in combination with the CDM. However, it remains to be seen how important the mechanism can be in terms of stimulating the transfer of sustainable energy technologies to developing countries. To move towards the sustainable technology transfer, evident is the need to turn the selection of the technology implemented under the CDM towards the host country specific needs and priorities.

Indeed, the selection of the most suitable sustainable energy technology for implementation under the CDM is a problem that decision makers often face and in which multiple conflicting goals or criteria have to be considered (4). Multicriteria analysis forms a very useful tool in order to take into account simultaneously all the basic aspects of the problem during the formulation of priorities for the implementation of various technology alternatives and represents a sound methodology applied internationally during the last decade in several problems of environmental and energy planning (5), (6), (7), (8), (9).

In the above framework, the study aims to present a collective and transparent approach, based on the active involvement of the related stakeholders, to support the sustainable technology transfer through the CDM, taking also into consideration the overall medium to long-term energy and environmental strategy of the host country. Specifically, the adopted approach uses an existing Multi Criteria Decision Making (MCDM) method, namely the ELECTRE Tri Method; which has the objective to categorize the available sustainable energy technology alternatives for electricity generation according to their contribution to sustainable development, by examining their economic, environmental and social benefits. The current approach lays emphasis on the formulation of the process so as to be relatively straightforward to incorporate direct experts' preferences as well as trying to deal with the needs of flexibility and validity. The presented approach could facilitate decision makers to put on the map the most suitable sustainable energy technologies to transfer in five developing countries, China, Chile, Israel, Kenya and Thailand and support these host countries' DNAs-Designated National Authorities in building the capacity to explore CDM projects contribution to the related sustainable development needs and priorities.

Apart from the introduction, the study is structured along three sections. The second section is devoted to the presentation of the materials and methods, which consists of the analysis of the proposed in-country participatory process for the elicitation of structured information and the customization of the MCDM method within the specific problem characteristics. The results from the application are presented in the third section, while the last section is the discussion of the main outcomes, summarizing the main points that have arisen in this study.