''By David Fogarty, Climate Change Correspondent, Asia
Extract taken from Reuters www.reuters.com''

Two leading carbon offset project developers in India say the scheme offers the promise of improving livelihoods and greatly expanding the reach and potential investment returns of the U.N.'s existing Clean Development Mechanism.

The CDM allows investors to build clean-energy projects, such as wind farms and solar power stations, in developing countries and earn carbon offsets in return. These can be sold on to help buyers in rich nations meet mandatory emissions targets.

But the CDM is hampered because it is based on the approval of single projects, which can take up to two years and is costly.

The expanded scheme, called program of activities (PoA), aims to allow the launch of identical emissions-reduction projects across a much wider user base in a single program, so cutting overall costs and simplifying the roll-out.

"India's the best place for PoAs. There's a lot of hunger to do these renewable projects because they know the government is committed," said Chandra Shekhar Sinha, head of environmental markets in Asia for J.P. Morgan.

The country of 1.1 billion people has large areas cut off from the electricity grid and is ideal for the deployment of clean energy via solar, wind or biomass, such as crop waste.

Areas that are linked often have old and inefficient lighting and powerlines that need upgrading and transport networks that need to switch to cleaner fuels.

Investment programs that can deploy cleaner energy and drive greater efficiency with the carrot of revenue from selling carbon offsets are seen as a key way to help poorer nations curb the growth of their greenhouse gas emissions.

J.P. Morgan is developing three PoAs in India and is evaluating others. One scheme involves the deployment of 1.2 million solar lanterns in the northern state of Bihar.

The other two cover the roll-out of more fuel-efficient commercial cooking stoves in restaurants and biomass boilers and gasifiers for agro industries, such as sugar mills.

Read more here