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1. Problem Statement : Innovative Carbon Financing for clean development at the BoP
The Clean Development Mechanisms (CDMs) allow industrialized countries with Greenhouse gases reduction commitments (called Annex 1 countries) to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. Such projects must establish that the additional incentives, provided by emission reductions credits, are needed for the projects.
However, Selco (Solar Electric Light Company), a prominent social venture providing sustainable energy solutions to rural India, has found it unfeasible to harness any benefits from CDM. Since the company deals with selling lighting to poor households that do not emit significant amounts of greenhouse gases, the process of selling savings on carbon emissions through the Kyoto Protocol’s CDM becomes too expensive and time-consuming for them.
Hence, the Clean Development Mechanism has failed to assist CleanTech enterprises in bringing sustainable solutions to the Base of the Pyramid, and deters inclusive development in countries like India.
Propose an alternative Carbon Financing model that effectively encourages innovations for sustainable development of the masses and takes into account their potential impact. Also, evaluate its feasibility in the Indian context.