EL SALVADOR PROFITS FROM KYOTO BY SELLING "CARBON CREDITS"

by Alberto Mendoza

(IPS) SAN SALVADOR -- El Salvador is studying the Kyoto Protocol carefully, not because it has to cut its emissions of the greenhouse gases that cause global warming, but because this international agreement opens a way to earn profits and encourages investment for development.

The treaty on climate change provides a Clean Development Mechanism (CDM), which allows rich countries -- the only ones obliged by the treaty to reduce their emissions -- to implement projects in developing countries, such as afforestation or reforestation, or to finance activities that reduce global emissions of greenhouse gases such as carbon dioxide (CO2), which are mostly released by burning oil, coal and gas.

There is also a provision for emissions trading, which allows states party to the protocol to sell coupons ("certified emissions reductions") for savings in greenhouse gas emissions below their assigned quota to other countries whose gas emissions exceed their assigned targets.

The Salvadoran Sugar Co. (CASSA) began to produce electricity in 2002 from sugarcane waste, and this is fed into the national energy grid. Electricity is generated in this way during the annual five-month sugar cane harvest.

Claudia Figueroa, the company's environmental manager, said that old sugar mills were replaced in 2006 by less wasteful electric mills. Thanks to this, they have registered with the CDM to offer for sale 89,000 carbon units. Each unit represents the equivalent of one metric ton of CO2 that has not been emitted, and sells for $6-$10. Japan has already expressed an interest in buying them.

In addition, the company imports hydrated ethanol from Brazil and processes it for export to the United States as a clean transport fuel. According to Figueroa, ethanol "is a business opportunity with great prospects."

The Kyoto Protocol stipulates that industrialized countries that have ratified it must cut their greenhouse gas emissions for the period 2008-2012 to 5.2 percent below 1990 levels.

The protocol was adopted in 1997, but did not enter into force until 2005, when it was ratified by 55 industrialized countries, responsible for 55 percent of total emissions. The United States refused to ratify the protocol on the grounds that it would harm its economy.

Mauricio Ayala, coordinator of the clean development division of the ministry of the Environment and Natural Resources, said that El Salvador has two other projects registered within the CDM framework.

The first, dating from March, involves covering over the Nejapa rubbish dump, located in the metropolitan area of San Salvador, and using the methane gas it produces to generate electricity. Between 1999 and 2005 alone, 2.7 million tons of solid waste was deposited there.

The proposal submitted estimates that using the methane in this way would eliminate 1.19 million tons of carbon dioxide in seven years, and 60,000 barrels of oil would be saved every year. Jobs would also be created, and the project would be an example for similar efforts in the rest of Central America. This initiative is backed by the Canadian International Development Agency.

The second ongoing project aims to expand the geothermal power plant at Berlin, in the eastern province of Usulutan. The plant, which began to operate in 1992, uses heat from the depths of the earth to generate electricity.

With the proposed expansion, a reduction of close to 1.3 million tons of carbon dioxide emissions is expected over the next seven years. The private LaGeo company runs the plant, and the expansion project is backed by the Netherlands and the Andean Development Corp.

According to the Ministry of Economy, 14.6 percent of electricity in El Salvador is generated by geothermal plants, 38.9 percent by hydroelectric power stations, and 46.5 percent by thermal generating stations, the most polluting variety because they burn fossil fuels.

Other pilot projects to develop renewable energy are being carried out in El Salvador, in partnership with the Energy and Environment Partnership with Central America (EEP), which was created at the initiative of the World Summit on Sustainable Development in South Africa in 2002.

"Energy is an important factor in development, as no community can develop without it," said Maria Eugenia Salaverria, El Salvador's representative on the EEP. "In the rural environment, energy can relieve poverty, because renewable sources can be productive as well."

In August, the EEP installed a water pump which uses solar energy to supply 300 low-income families with drinking water in the community of Areneras, in the southern province of Sonsonate.

The idea is not a new one. Tecnosolar, the only company devoted entirely to solar energy, has been installing solar-powered electricity generators in rural communities for years, filling orders from different non-governmental organizations.

The administration of incumbent President Elias Antonio Saca, of the right-wing Nationalist Republican Alliance, also intends to extend the electricity supply in rural areas using solar energy.

Official statistics indicate that about 30 percent of the population lacks electricity. The government plan began in November 2005, in the communities of Las Flores and Cerro Alto in Sonsonate, where 70 families are supplied with electricity by solar cells installed on their houses.

Each family pays $3.50 a month for equipment maintenance and a repairs fund, and they are able to connect two or three light bulbs, a black and white TV set, a radio and, on a sunny day, some other low-power appliance.

However, so far the installations are inadequate for a family to be able to use the energy for productive ends, such as a refrigerator to preserve and sell foods, or a sewing machine.

But in upper-scale neighborhoods in San Salvador, solar energy is far from a viable proposition. Arturo Solano, the founder of Tecnosolar, said that solar panels to supply the electricity consumed by an upper-middle-class family, with all its regular comforts, would cost between $50,000 and $100,000.

Solano said that El Salvador urgently needs new legislation requiring electricity distribution companies to buy the energy generated by private solar panels installed, say, on the roof of a house, at a fair price.

"That," he said, "would be good business."