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Sunday August 14th, 2022

Sri Lanka carbon credits need reform to be globally traded

ECONOMYNEXT- Sri Lanka’s Carbon Crediting Scheme (SLCCS) needs to be further strengthened to be recognized globally, two World Bank specialists said, while lauding efforts made by early adopters.

World Bank’s Climate and Energy Specialist Prajwal Baral and Carbon Finance specialist Keisuke Iyadomi in an official blog post said that Sri Lanka has only now managed to ‘catch the low carbon development train’.

SLCCS is a voluntary program which supports greenhouse gas emission reduction and enables companies to earn Sri Lanka Certified Emission Reduction Units (SCERs) for their efforts to reduce emissions.

These units can either be used offset emissions or to be traded among fellow companies.

Dilmah, a tea company, has achieved carbon neutral status through the scheme, while competitors Eswaran Brothers and Bogawantalawa Tea Estates have achieved the same feat outside the SLCCS.

Firms in other countries already trade carbon credits they generate internationally whereas Sri Lanka is yet to reach that level.

There is a lack of demand for carbon credits generated in Sri Lanka in international markets as credibility has yet to be built.

“The SLCCS program itself needs to be further strengthened and recognized as a credible scheme in the global carbon market,” the Baral and Iyadomi said.

“For this, the framework for monitoring, reporting, and verification, and for registry needs to be strengthened and made internationally compatible.”

“Once the scheme attains high international standards, the SCERs generated from any type of non-export-oriented industries could boost the demand for carbon credits both domestically and internationally.”

Major carbon emittors in industries, transportation, waste and electricity have yet to demand carbon credits, as they have no financial and non-financial incentives to do so, the World Bank specialists said.

The government could implement tax cuts to enable the use of carbon credits and invest in greener technologies, they said.

Sri Lanka has ambitious carbon-reduction targets under its Nationally Determined Contribution to the United Nations Framework for Combatting Climate Change.

Carbon emissions in Sri Lanka, which is highly vulnerable to climate change, have more than doubled over the last 15 years.

Meanwhile, Sri Lankan Airlines is recognized worldwide for its ‘Flygreen’ program.

The full blog post follows:

Sri Lanka catches the low carbon development train

In Sri Lanka, one of the world’s largest tea companies has become carbon neutral.

From late 2018, Dilmah Tea, a family firm with a market presence in over a hundred countries, began to offer a complete range of carbon-neutral products.

Furthermore, Sri Lankan Airlines, the country’s national carrier, has become one of only six airlines globally to be accredited for its ‘Flygreen’ program. Other companies are hoping to follow.

So, what has Sri Lanka done to make this happen?

With its CO2 emissions increasing by more than 100% over the last 15 years, the country – which is highly vulnerable to effects of climate change – has submitted ambitious carbon-reduction targets under its Nationally Determined Contribution to the UNFCCC.

One of the ways in which it aims to achieve these targets is through the Sri Lanka Carbon Crediting Scheme (SLCCS).

The scheme – voluntary in nature – allows companies to reduce their carbon footprint by trading domestically in carbon.

Under the scheme, companies can use their efforts to reduce emissions – such as generating clean power from hydro and solar – to earn Sri Lanka Certified Emission Reduction Units (SCERs).

By earning these units, companies can offset their own emissions, or trade their carbon credits with other companies.

Dilmah Tea has already used this scheme to offset a part of its carbon footprint with the help of two mini-hydropower projects on their tea estates in Queensberry and Craighead.

Other tea producers such as Eswaran Brothers and Bogawantalawa Tea Estates have also declared carbon-neutral status through non-SLCCS projects.

Nonetheless, the lack of demand for carbon credits has prevented the program from fully taking off.

Critically, the carbon-heavy sectors such as transport, electricity, industry, and waste – that have the primary onus of meeting the country’s emission reduction goals – have not yet fully entered the race to reduce their carbon footprint.

The reasons are not difficult to find. They have little to no financial or non-financial incentive to do so.

Even so, by following a three-pronged approach, Sri Lanka can help ensure that these carbon-heavy sectors do not miss the low carbon development train :

First, the government needs to create a better enabling environment that encourages industries to adopt low-carbon or more energy-efficient technologies in their entire value chain.

For instance, reducing taxes and import duties for a wide range of green technologies, or giving low emitters priority in government procurement could encourage the companies to adopt lower-carbon technologies and use more of the SLCCS credits. (Colombo/Oct09/2019)

Second, the SLCCS program itself needs to be further strengthened and recognized as a credible scheme in the global carbon market.

For this, the framework for monitoring, reporting, and verification (MRV), and for registry needs to be strengthened and made internationally compatible.

Once the scheme attains high international standards, the SCERs generated from any type of non-export-oriented industries could boost the demand for carbon credits both domestically and internationally.

Third, Sri Lanka needs to train more low carbon experts through a well-structured capacity building and education program.

For instance, companies could be encouraged to use the MRV system at their manufacturing plants and to learn more about the best-available low-carbon technologies that qualify under the SLCCS.

The world over, countries are gearing up for low-carbon economic development.

The World Bank Group (WBG)’s latest report, “State and Trends of Carbon Pricing 2019” shows that, globally, 57 regional, national and sub-national carbon pricing initiatives have already been implemented or are scheduled for implementation.

Sri Lanka cannot afford to be left behind. Since 2018, the World Bank’s Partnership for Market Readiness (PMR) – a grant-based trust fund – has been providing the country with funding and technical assistance for piloting carbon-pricing instruments that reduce GHG emissions.

With the right regulatory and policy support, and global initiatives such as the PMR, the exemplary initiatives taken by Sri Lanka’s tea industry could easily be replicated by other companies too.

Comments (1)

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  1. Tilak says:

    Carbon credit is one of the most over hyped subject without any benefit to entities that helps the situation.(The Rubber plantations are one of the most effective in this sphere that contribute towards clean air & what benefit the plantations have got up to date than talk ,talk, & more talk about carbon).Best is to put the relevant responsibility centers on specific time lines to achieve results globally & locally & passe these to ground level.Responsibility centers note the rapid changes to climate globally & locally & act fast rather polluting atmosphere by vomiting words.

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Comments (1)

Your email address will not be published.

  1. Tilak says:

    Carbon credit is one of the most over hyped subject without any benefit to entities that helps the situation.(The Rubber plantations are one of the most effective in this sphere that contribute towards clean air & what benefit the plantations have got up to date than talk ,talk, & more talk about carbon).Best is to put the relevant responsibility centers on specific time lines to achieve results globally & locally & passe these to ground level.Responsibility centers note the rapid changes to climate globally & locally & act fast rather polluting atmosphere by vomiting words.

Sri Lanka coconut auction prices continue to climb

ECONOMYNEXT- Sri Lanka’s average coconut prices grew 3.7 percent to 64,618.23 rupees for 1,000 nuts at the last auction held on Friday August 12, official data showed.

The highest price was 62,900 rupees for 1,000 nuts, while the lowest was 57,000 rupees at the auction conducted by Sri Lanka’s Coconut Development Authority.

Buyers offered 1,019,395 nuts at the auction and sold 576,906.

Exports of coconut-based products have risen by 12 percent in January to June to 434.48 million dollars from a year earlier, data show. (Colombo/Aug13/2022)

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Chinese tracking vessel cleared to dock at Sri Lanka’s Hambantota Port

Hambantota Port

ECONOMYNEXT – Sri Lanka’s Ministry of Foreign Affairs has given the green light to Chinese tracking vessel Yuang Wang 5 to dock at the Chinese-built Hambantota Port from August 16 to 22.

Sri Lankan authorities had first given clearance to the Chinese vessel on July 12, to make a port call at the Hambantota Port from August 11 to 17​ for replenishment purposes.

However, following a diplomatic standoff after concern about the tracking vessel’s anticipated arrival were reportedly raised by the US and India, Sri Lanka’s foreign ministry requested China to defer the port call until “further consultations”.

A report by Sri Lanka’s privately owned Times Online news website said Saturday August 13 morning that the foreign ministry has authorised the docking of the ship.

Related:

Sri Lanka permits entry to controversial Chinese tracking vessel Yuang Wang 5

The ministry’s official statement released Saturday evening confirmed that the ship has been given clearance to dock at the Hambantota Port for the new dates August 16 to 22.

“The Ministry wishes to reiterate Sri Lanka’s policy of cooperation and friendship with all countries. Security and cooperation in the neighbourhood is of utmost priority. It is Sri Lanka’s intention to safeguard the legitimate interests of all countries, in keeping with its international obligations. The Ministry is deeply appreciative of the support, solidarity and understanding of all countries, especially in the current juncture when the country is in the process of addressing severe economic challenges and engaging in multiple domestic processes to ensure the welfare of the Sri Lankan people,” the ministry said, without naming the stakeholder countries. (Colombo/Aug13/2022)

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Sri Lanka looking to provide relief to bona fide protestors: justice minister

Pix by T.N.Nawas

ECONOMYNEXT – Sri Lanka has entrusted the process of identifying individuals who engaged in violence during the widespread anti-government protest to a “different group”, as there is a “practical issue” with separating those individuals, the island nation’s Justice Minister said.

“There is a problem. This is not a legal issue; it is a practical issue because the Aragalaya consists of several groups. In fact even the police has difficulty identifying who were genuinely involved in the peaceful struggle and the others who came from outside and caused some violence,” said Minister Wijedasa Rajapaksha, speaking to EconomyNext on Wednesday August 10.

“We needed assistance in identifying those who [protested] bona fide. We want to give them relief; [not] take any legal action against them.”

Sri Lanka saw a massive uprising against the government’s inability to protect people from a debilitating economic crisis caused by wrong economic policies. The public took to the streets to demand the resignation of then President Gotabaya Rajapaksha and a stop to Sri Lanka’s systemic corruption.

Most protestors focused on sustained protests in several areas of the island, particularly the GotaGoGama agitation site in front of the President’s Secretariat.

However there were incidents of violence that saw houses of ruling party MPs looted and burned down and public property damaged. President Ranil Wickremesinghe’s private residence was also burned down in July, while he was Prime Minister and protestors were occupying the Official Residence of President Rajapaksha, who had by then fled the country.

Wickremesinghe declared a State of Emergency shortly after, granting the forces power to arrest anyone suspected of engaging in violent behaviour.

However, many of the arrested protestors allege that they were not part of the “violent minority”.

“This was such a peaceful protest. When the Bastille was stormed there was not a brick left in the place,” said one protestor.

The protestors subsequently handed over the occupied government buildings to the authorities, and have now wrapped up the occupation segment of the protests following to a court order.

Activists both local and international are asking the government to repeal the State of Emergency, but Wickremesinghe has not indicated that he plans to do so anytime soon.

The Supreme Court meanwhile has granted leave to proceed to a Fundamental Rights Petition filed by former Human Rights Commissioner of Sri Lanka Ambika Satkunanathan.

Satkunanathan tweeted Friday August 12: “The Supreme Court granted leave to proceed in Articles 12(1) and 14(1) in the fundamental rights petition I filed challenging the declaration of the state of emergency and the emergency regulations.”

Though Satkunanathan had filed the petition for other allegedly violated Articles, the Supreme Court will only be proceeding with Articles 12(1) and 14(1) which deal with equality under the law and freedoms of speech, expression and assembly.

Several prominent protestors have been jailed under the Emergency laws, and on Wednesday August 10 the Immigration Department cancelled the visa of a Scotswoman who had documented the protests.

Minister Rajapaksha said that he had met with protestors, and discussed the situation regarding arrests.

“We are in the process [of identifying protestors]. We entrusted that to a different group on the advice of the president and we will do that in the following days,” he said.

“The police will have to take action only against those who engage in vandalism,” he said. (Colombo/Aug13/2022)

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