Benefits of GHG Reduction and Carbon Finance for Adjara project : a case study in Georgia

University essay from KTH/Industriell ekologi

Abstract: The grave concern over climate change threat and different economic incentives such as the clean development mechanism have given more weight to the potential of projects for reducing greenhouse gas emissions. In Adjara solid waste management project, even though the greenhouse gas reduction was acknowledged, it was not one of the key factors for selecting the most practicable treatment option. In doing so, the study was addressed the benefit of various solid waste treatment methods for Adjara project in terms of greenhousegas emissions reduction. It is followed by analyzing the economic impacts of carbon finance on the financial feasibility of the project according to different economic scenarios. In considering the solid waste treatment technologies that could be suitable for developing countries, seven options were focused in the study: the baseline of open dumping, four options for landfill (no provision of landfill gas capture, landfill gas capture with open flaringsystem, enclosed flaring system and electricity generation), composting and an aerobicdigestion with electricity production. The applicable CDM methodologies were adopted toquantify the amount of reductions for scenarios. Anaerobic digestion scenario had by far thegreatest amount of reduction. In versely, the worst scenario was landfill without landfill gasrecovery which had even more contribution to climate change than the base case. In the economic assessment part, the internal rate of return was adopted as financial indicator and the feasibility study of the project was adjusted according to new economic condition in the presence of carbon finance. The scenario with additional incomes from the sales of both certified emission reductions and electricity maximized the profits of theproject. In case the project partners do not consider the possibility for generating electricity,they can maintain the project’s economic position through the sale of certified emissionreductions instead of the income from selling electricity. These conclusions were tested for uncertainty and sensitivity by modifying the price of the certified emission reductions and the input waste composition and were found to be robust.

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