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.