Emissions Trading

Mrunal (http://mrunal.
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[Climate Change] Kyoto Protocol, Carbon Trading, Copenhagen

Accord: Meaning, Explained
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1.
What is Rio Summit/ Earth Summit ?
2.
What is the UNFCCC?
3.
What is Conference of the Parties (COP)?
4.
What is Kyoto Protocol?
5.
What is common but differentiated responsibilities?
6.
Annex
7.
Kyoto protocol: How does it actually work?

1.
#1 Emissions Trading / Carbon Trading
2.
#2 Clean Development Mechanism (CDM)
3.
#3 Joint Implementation (JI)
8.
Why USA did not ratify Kyoto Protocol?
9.
Canada Quits Kyoto protocol
10.
What is the Copenhagen Accord?
11.
Important Players in climate change

1.
United States
2.
BASIC Countries
3.
European Union (EU)
4.
Alliance of Small Island State (AOSIS)
What is Rio Summit/ Earth Summit ?

It was a United nations summit, held in Rio de Janeiro (Brazil) in 1992.
It led to creation of United Nations Framework Convention on Climate Change (UNFCCC)
What is the UNFCCC?
United Nations Framework Convention on Climate Change (UNFCCC)
Created because of the Rio Summit/ Earth Summit of 1992.
It is an international treaty for reducing greenhouse gas emissions.

Nearly every country on Earth is a party to the UNFCCC.
What is Conference of the Parties (COP)?
The nations, whove signed UNFCCC convention, meet every year to discuss climate
change strategy.
These meetings are called Conference of the Parties (COP)
The first COP (COP 1) was held in Berlin.
Third COP (COP 3) held in Kyoto, Japan. It was here the famous Kyoto Protocol came in to
existence.
2011: COP held in Durban, S.Africa.
2012: COP will be held in Doha, Qatar in November 2012 (so it becomes important topic
for next prelims!)
What is Kyoto Protocol?
1997: third meeting of UNFCC nation (also known as Conference of Parties/COP3),
In this meeting Kyoto Protocol was created.
Kyoto protocol wants the Industrialised nations to reduce their green house gas emission
by around 5.2% by 2012. (measured against 1990 levels)
Before dwelling much into Kyoto, some important terms.
What is common but differentiated responsibilities?
The developed countries such as US,UK have already polluted the atmosphere with
greenhouse gases (GHGs) through industrialization. So theyre the one who
created/started global warming and all the mess.
While Developing countries (India and Brazil) have started polluting the world only
recently.
Therefore, the developing countries such as India, Brazil should share less of the burden
of lowering overall emissions.
And Developed countries (US,UK) should bear more responsibility in fixing this global
warming mess etc. because theyre the one more responsible for it.
So, while it is the Common responsibility of every nation of this world, to reduce Green
house gas emission, but there should be some difference between the responsibility
given to developed countries and developing countries.
Kyoto Protocol follows that principle and assigns separate responsibilities to the
countries.
Annex
Annex means some elaboration/detail given at the end of a book/treaty.
Annex
What?
List of industrialized countries and economies in transition: US, France,
Annex I
Japan etc.
These countries had pledged to reduce their greenhouse gas emissions to
1990 levels by the year 2000.
A sub-group of Annex 1 Countries, these Annex II countries are required to
Annex II
give financial assistance and technology to the developing countries (nonAnnex countries).
Non
Annex
Developing countries like India, Brazil, China.

They donot have compulsory binding targets to reduce green house gas
emission, although they are encouraged to do it.
It gives the list of 6 Green House gases that are responsible for the whole
problem
1. Carbon dioxide (CO2);
Annex A
2. Methane (CH4);
3. Nitrous oxide (N2O);
4. Hydrofluorocarbons (HFCs);
5. Perfluorocarbons (PFCs); and
6. Sulphur hexafluoride (SF6)
This gives the Annex I countries (Developed countries) compulsory
Annex B
binding targets to reduce green house gas emission.

For example USA is required to cut down its emission by 7%
Back to Kyoto Protocol

Ok, so far we learned that
In Earth Summit, Rio De Janero, Brazil, they formed a treaty called UNFCCC
The UNFCCC gangsters meets every year, there is item song, gun-firing, consumption of
desi-liquor and deliberations on how to fix the global warming problem and these
meetings are called Conference of Parties COP.
In third such COP meeting @Kyoto, Japan, they come up with an idea under which
Developed nations like US, will compulsorily reduce their green house gas (GHG)
emission by 2012.
Developing nations like India, should reduce GHG emission but not compulsory.
Although various countries signed Kyoto Protocol in 1997, it did not came into force
immediately.
Kyoto protocol came into force only after required number of Annex 1 Countries ratified
it.
So this was achieved only in 2005.
Thus, Kyoto although signed in 1997, came into force in 2005.
Kyoto protocol: How does it actually work?

Suppose Abdul, Bhide and Champak (ABC) goto a Gujarati dining hall. This hall serves only
fixed dish i.e. 1 sabji, 4 roti,dal and rice. And each dish costs Rs.50. If you want more roti
then youll have to pay extra 5 rupees per roti.
Now Champak is an old man so he cannot eat all the 4 rotis served in his plate. He eats
only two rotis.
On the other hand, Abdul and Bhide are quite hungry, so they want more, they take 1-1
roti each from Champaks plate and agree to pay 5-5 rupees to him.
Another example: You know how broadband internet billing works= there are plans for
example 2GB plan for Rs.500 That means as long as you download music, movies etc.
worth less than or equal to 2GB then youll get bill of Rs.500 but if you download more
files above 2GB quota, then company will charge you Rs.1 per MB of extra download.
Similarly, Under Kyoto Protocol, each Annex-B country is given emission target quota
(Kyoto Units).
For example, for the year 2009, Australias allowed quota was 2,957,579,143 Kyoto units.
(each unit is equivalent to 1 ton of carbon dioxide)
Now, as long as Australia emits that much green house gas= no problem.
So first of all, Australian Government should do all steps to make sure it doesnt cross that
quota for example
Making compulsory anti-pollution laws: for example a Tire making company with daily
output of 200 tires must not emit more than 200 tonnes of green house gas per year.
Promoting solar energy, reducing tax on solar cells, wind mill equipments etc.
If a family buys second car then it will have to pay higher tax (just like Chinas one child
policy but with cars!)
if a kid is found bunking his college lecture and loitering on his motorbike then hell be
fined for polluting the environment.
But even after all these measures, if Australia wants to emit more green house gas, then it
will have to buy additional quota or units from another country. Kyoto Protocol allows
three mechanisms to do so
#1 Emissions Trading / Carbon Trading
Suppose two Annex B parties are Japan and Australia.
Japan was given quota of 100 units

And Australia was given quota of 200 units.
But Austrialian Government is unable to maintain this limit and Australia emits 210 units
of green house gas, in given year.
On the other side, Japanese Government takes very strong steps to control emission and
hence they only emit 90 units of Green House gas. So it has spare 10 Kyoto Units.
Now, under Emission trading system, Australia can buy this 10 spare kyoto units from
Japan and thus remain within its limit.
In real life scenario, each annex B country makes law giving fixed quota to the companies.
Suppose steel factory cannot emit more than 1 ton of Green house gas
Tire company cannot emit more than 2 tonnes of green house gas.
So if tire company owner buys superfine machinaries that produce less gas so he has
some spare credit/quota (say 1 ton)
While Steel factory emits more than its allowed quota (suppose it was allowed 2
tonnes but emitted 3 tonnes)
Then the steel company can pay the tire company and get a certificate that weve
purchase 1 ton quota from this xyz tire company. This Is the essence of Carbon
Trading.
Here are some charts to understand it better. But the text in below image is hard to read
(because the original images were in low quality). Solution =just hold down Ctrl Key on
your keyboard and move your mouse-wheel upwards and itll zoom the image.
#2 Clean Development Mechanism (CDM)
Suppose Annex B country Australia is given emission quota of 200 units, but it emits 210
units of green house gas.
But Australia can finance a solar power project in some village of India (Non-Annex or
developing Country) and get certificate that the solar plant led to reduction of 10 units of
green house gas. In this way, Australia will remain in its quota/limit.
Similarly, suppose Australian Government has passed a law that a steel production
company with output of 200 tonnes of steel per a day, must not emit more than 10 units
of green house gas in a year.
But this company wants to produce more steel, then its green house gas emission has
increased to 11 units. (1 more unit above the quota)
So this company can also do some solar-projects in India, Brazil etc. and get a
certificate that it has led to reduction of 1 unit of GHG emission. = problem solved.
#3 Joint Implementation (JI)

This is identical to CDM.
In CDM, Australia can do good project in a non-Annex country (developing country) e.g.
India.
In Joint Implementation, Australia can do the good project in another Annex B country e.g.
Japan to meet the quota.
Why USA did not ratify Kyoto Protocol?
US President George W Bush refused to ratify Kyoto protocol saying that it would gravely
damage the US economy.
for example a US steel company would need to either buy Carbon Credits from another
company or invest in some projects in a developing country), while an Indian or Chinese
Steel company has no such obligation so their cost of production = low, hence they can
sell their products @lower MRP = US steel company will loose customers.
So US Government feels is that the treaty is fatally flawed, because it does not require
developing countries (especially India and China) to commit to emissions reductions.
After President Bush, President Obama too, didnt ratify Kyoto protocol for the same
reason. (plus we should also understand that the powerful US industrialist lobby may stop
election funds to a candidate, if he is in favor of Kyoto protocol, so USA is unlikely to ratify
Kyoto or any such future protocols that are legally binding!)
Canada Quits Kyoto protocol
In 2011, Canada, become the first country to quit the Kyoto Protocol on climate
change, saying the 1997 accord was handicapped because top green house emitters like
the United States and China not covered by it.
Because USA has refused to ratify the treaty and China being an Annex II country has no
compulsory responsibility to cut down emission.
What is the Copenhagen Accord?
Recall that UNFCCC countries meet every year and it is called Conference of Parties (COP).
15th such meeting was held @Copenhagen, Denmark = COP15
In the meeting, the BASIC blocBrazil, South Africa, India and Chinaand the U.S., came
up with a political agreement.
This agreement is known as the Copenhagen Accord.
It says all countries should pledge to reduce Green House Gas (GHG) emission but all of
the pledges made under the Copenhagen Accord are voluntary; There are no binding
obligations placed on these pledges by the UNFCCC or any other international body.
UNFCCC acknowledged the Copenhagen Accord and has assisted in collecting the GHG
reduction pledges of various countries.
Copenhagen Accord also lays the groundwork for financial commitments from developed
countries (US,UK) to developing countries (India,Brazil etc) for climate change mitigation
and adaptation efforts.
Important Players in climate change

The First commitment period of Kyoto will end in 2012.
Thats why, the next meeting (COP18, Doha, Qatar in Nov2012) becomes very critical.
So nowadays UNECC nations are trying to form factions (small gangs) to discuss what
should be their stand in that meeting?
either extend commitments under Kyoto or
create a successor of Kyoto Protocol: a post-2012 international climate treaty.
United States
China is the world leader in total annual Green House Gas emissions
U.S. is second.
EU is third.
United States is the only Annex I country that has not ratified the Kyoto Protocol.
In line with the Copenhagen Accord, the U.S. has pledged a 17% reduction in GHG
emissions, against a 2005 baseline, by 2020. (but this is not legally binding).
As we saw earlier, US is not in favour of any legally binding commitments. Besides,
Obama has to face election in November.
BASIC Countries
Brazil, South Africa, India and China,
this group includes the worlds major emerging economies and some of its largest
emitters
together, the group accounts for around 30% of global GHG emissions.
BASIC countries, along with the US, were the authors of the Copenhagen Accord and will
continue to be some of the most influential players in the negotiations.
All of the BASIC countries have ratified the Kyoto Protocol.
But theyre not under any binding obligation to meet a specified target. (because these
countries are not part of Annex B countries of Kyoto Protocol).

Under the Copenhagen Accord, China and India have pledged to reduce their carbon
intensitythe amount of GHG emissions per unit GDPby 40-45% and 20-25%,
respectively, against 2005 levels by 2020. (again not legally binding).
BASIC countries recently met in Brazil in September 2012, and declared their intentions
(what they want in COP meeting @Doha, Qatar in Nov.2012):
1. rich countries should take on more of a burden to reduce emissions because of their
historical contribution to global warming.
2. new agreement should respect the principles of equity and common but
differentiated responsibilities,
3. new Kyoto commitment period should start on January 1, 2013
European Union (EU)
EU is a Party to both the Convention and the Kyoto Protocol.
EU is the 3rd largest GHG polluter, accounting for about 12% of global emissions
EU states have ratified Kyoto.
Alliance of Small Island State (AOSIS)
Not really a player, these are the future victims if green house gas emission is not
reduced.
AOSIS is an team of 43 small island and low-lying coastal countries (Barbuda, Bahamas,
Barbados, Cuba etc.)
More green house gas = rise in global temperature = ice melts= sea level rise =many of
these areas to become uninhabitable.
Tags: EnB-Treaties (http://mrunal.org/tag/enb-treaties)
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So far 85 Comments posted
REPLY (/2012/09/CLIMATE-CHANGE-KYOTO-PROTOCOL-CARBON-TRADING.HTML?
REPLYTOCOM=122874#RESPOND)
VARUN
hats off sir .for your help.
sushil
concepts ek dum clear . thanks
Prasanna Kanakeri
Comendable job !! Great analysis. Thank you Mrunal.
SWETA
Very sincere thanks to you Mrunal Sir. Being a late entrant (aspiring for
2014 UPSC CSE) and having never followed newspapers (except until
recently, i.e. since last 2 months) I am devoid of background
knowledge on many topics. Your articles are so simple yet so pithy. I
am so much interested to keep reading and keep knowing. Thanks to
you indeed. Request you to keep writing and helping people like me!
VIKAS K
Sir, the you prepare the articles that is really amazing.you make the
concept crystal clear.
VIKAS K
Sir, the way you prepare the articles that is really amazing.you
make the concept crystal clear.
shas
impressive sir
Ankush Awatade
Dear Mrunal
You r doing very nice job by giving so much study material on line.even
we cant think how much pain u r taking by posting huge study material
on line.
real aspirants will always give blessings.
saikiran
The matter published by you is awesome.
Andu
you are really next to godyou r doing very good job with your
tremendous help to the peoplethanks a lot
DHARMESH SINGH
sir.. the way u have written is really very clear and worth praising..
thanks for making such a clear approach .. keep writing sir no
various topics thanks a lot
priyanka
One of the image in this article is missing.. please fix it Mrunal.. !!!
Amasidda
Good article.
neeta
thanks sir this article is helpful for me.
Starry starry nights

Hi Mrunal,
Excellent article as always.. Just one correction, you have written China
is an annex II country, which is incorrect, it is a non-annexe country
and hence has no legally binding targets.
Regards
Rashi
This article is really very helpful for aspirants like us.Lots of an
information has been shared in a very brief and summarised way.
Your articles are really very helpful for our preparation.Thank you.
digonto
One doubt sir. How it was ensured that the countries were not
exceeding their alloted quota vide kyoto protocol? Any monitoring
mechanism . or how ?
SHAHID
SOMETHING RELATED TO RECENT DEVELOPMENT IN THIS REGARD IS
STILL MISSING, SO PLZ update the topic if u can. thanks
vinay kumar
one of the best article. first time understand completely climate issue
& carbon trading ..thanks sir..
Birdy
Brilliant article! Thanks Mrunal
ranjithgummadi@gmail.com
If UPSC is a religion for civil aspirants,then mrunal site is GOD of it.only
site where with least input getting maximum output.Thank u mrunal
sir.
kalki
correction = china is nat an annex 2 country
Aasim
koi neend se utha k kyoto protocol ka mechanism poochega to bhi i
will be able to explain. thanks alot for this excellent job.
Surendra Singh
Thanks sir for this valuable article. but how do UNFCCC measure GHG
emissions for a perticular country.
kks sharma
Mrunal sir thank u very much for u mind blowing article
dayakar
Kyoto protocol provides 3 flexible mechanisms:
1).IET(International Emission Trading):
Every Annex B country is given carbon credit quota called AAUs
(Assigned Amount Units). If Japan saves its 10 AAUs then it will sell to
other country and earns MONEY (other country means of course
Another Annex B country as non Annex countries are not required to
buy carbon credits)
2. CDM & 3. JI are project based mechanisms means
2).CDM (Clean Development Mechanism)
Annex B country invests in Green Technology in non annex country
and says this green technology reduced 2 tons of carbon emissions in
that non annex country.. so i need some profit for that.. Kyoto
protocol gives some CERs to that Annex B country
CERs (Carbon Emission Reduction units): by these CERs, the above
discussed Annex B country can emit some extra carbon emissions
3). JI(joint implementation)
same as CDM but here one Annex B country Invest in another Annex B
country and earns carbon emission units.. these units in this case are
called EURs (Emission Reduction Units)
hope you understood.. All the best..
sk, imame azam

thank you mrunal dada aaj hi class hua tha mera vaji me, ,nice
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15-Apr: Delhi Scientist (http://icmr.nic.in/icmrnews/tss.pdf)
13-Apr: SSC Specialist Eastern (http://www.sscer.org/)
10-Apr: Himachal Specialists (http://hp.gov.in/hppsc/page/Latest-Advertisement.aspx)

06-Apr: Income Tax, Sports Quota(TN) (http://tnincometax.gov.in/)
30-Mar: NIT Hamirpur Specialists (http://www.nith.ac.in/recruitment/index.htm)
24-Mar: Gujarat Cancer Research (http://www.gcriindia.org/)
23-Mar: RBI Rajbhasha (http://rbi.org.in/)
23-Mar: RBI Security (http://rbi.org.in/)
20-Mar: Indian Economic Service (http://www.upsconline.nic.in/mainmenu2.php)
20-Mar: Indian Statistical Service (http://www.upsconline.nic.in/mainmenu2.php)
20-Mar: Geologists Exam (http://www.upsconline.nic.in/mainmenu2.php)
16-Mar: GAIL Security (http://www.gailonline.com/final_site/current_opening.html)
16-Mar: HWB Technician (http://www.hwb.gov.in/htmldocs/advt/advt_index.asp)
Deskjobs
15-Apr: UP Steno (http://upsssc.gov.in/AllNotifications.aspx)
14-Mar: RAILTEL Assistants (http://www.railtelindia.com/images/stories/OA vacancy noticedetailed.pdf)
31-Mar: Raipur law Uni. Deskjobs (https://www.hnlu.ac.in/index.php/17-what-s-new/169appointment-cum-corrigendum-notification)
27-Mar: Chandigarh Deskjobs (http://www.nitttrchd.ac.in/sitenew1/pdf/Adv.142_2015.pdf)
17-Mar: IIM Rohtak Deskjobs (http://www.iimrohtak.ac.in/)
Faculty
30-Apr: Uttarakhand (http://www.recruitmenthnbgu.co.in/)
20-Apr: Maritime Univ. (http://imu.edu.in/index.php?latestnews=1&newsid=343)
20-Apr: Keral Univ. (http://www.cukerala.ac.in/)
17-Apr: NIT Bengal (http://nitdgp.ac.in/tender15/_FINAL_ADV.pdf)
01-Apr: Meghalay Teachers Trainee
(http://nitmeghalaya.in/nitm/notifications/recruitments/Trainee_techerFeb2015.html)
31-Mar: IDRBT Hyd. (http://www.idrbt.ac.in/careers.html)
31-Mar: IISER Kerala
(http://www.iisertvm.ac.in/openings/faculty_special_recruitment_drive.phpx)
31-Mar: NIT Meghalaya
(http://nitmeghalaya.in/nitm/notifications/recruitments/faculty_feb2015.html)
31-Mar: Raipur Law (https://www.hnlu.ac.in/index.php/17-what-s-new/169-appointmentcum-corrigendum-notification)
30-Mar: Mumbai TGT (http://aees.gov.in/htmldocs/recruitment.html)

30-Mar: KV Principals (https://jobapply.in/KVS2015DCACPR/)
30-Mar: Doon Univ. (http://uk.gov.in/announcements/view/96)
27-Mar: IIT Madras (https://www.iitm.ac.in/content/faculty-recruitment-2015)
27-Mar: IIT Guwahati (http://www.iiitg.ac.in/)
24-Mar: IIM Indore (http://www.iimidr.ac.in/iimi/index.php/faculty-positions)
25-Mar: Tezpur,Assam (http://www.tezu.ernet.in/)
25-Mar: KVASU Professor (http://www.kvasu.ac.in/news/readmore/868)
20-Mar: Bengal law (http://www.nujs.edu/)
19-Mar: Unani Asst.prof (http://upsconline.nic.in/ora/VacancyNoticePub.php)
19-Mar: IT Asst.prof (http://upsconline.nic.in/ora/VacancyNoticePub.php)
17-Mar: NIT Hamirpur (http://www.nith.ac.in/recruitment/index.htm)
Uniform
31-Mar: Army Medical SSC (400) (http://www.amcsscentry.gov.in/)
21-Mar: CISF Head Constables (http://www.cisf.gov.in/wpcontent/uploads/2015/02/HC_MIN_2015_ENGLISH.pdf)
14-Mar: NAVY SSC (http://www.nausena-bharti.nic.in/forthcomingOfficer.php)
B.Com, CA, HR, MBA

10-Apr: Himachal Finance (http://hp.gov.in/hppsc/page/Latest-Advertisement.aspx)
09-Apr: Mazgaon Finance (http://mazagondock.gov.in/newsite2010/index.htm)
21-Mar: RCFL Finance (http://www.rcfltd.com/index.php/hrmain/recruitment/10942-officerfinance-recruitment-2015)
18-Mar: SAIL MT (HR, Fin., Marketing) (http://sailcareers.com/central_recruitment)
18-Mar: Kochi Metro HR, Accounts (http://kochimetro.org/wpcontent/uploads/2015/02/Phase_I_Advertisement_-23.02.2015.pdf)
17-Mar: Uttarakhand Accounts (http://ukpsc.gov.in/recruitment/view/339)
16-Mar: NTPC Finance (http://open.ntpccareers.net/fin15/index.php)
16-Mar: FCI Accounts (http://fagmil.nic.in/index.php/en/services/careers)
RESULT /MARKSHEET
SSC CGL-14 T1
SSC CGG-13 Final
CAPF-2014
IFoS-2014
RBI Officer
NOTIFICATIONS IN 2015
IAS-IPS-IFoS: 16 May
IES: 7 Feb
SSC CGL: 14 March
SSC 10+2: 11 April
SSC Sub insp: 28 Feb
CAT: Aug 2015
RBI Officer / Assistant: ??
SBI PO / Clerk: ??
IBPS PO / Clerk / RRB: ??
ACIO 2015: ??
1. Online Form Part-I stops few days before deadline, so don't wait till last date. Dont forget
reg.id & roll no.
2. I usually update vacancy list every Monday morning. Purple link= newly added, Blue=
existing. Last updated Mon. Mar 16, at 9:00AM
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Emissions Trading

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Mrunal (http://mrunal.

[Climate Change] Kyoto Protocol, Carbon Trading, Copenhagen

Environment (http://mrunal.org/category/environment) / 2 years Ago /

What is Rio Summit/ Earth Summit ?

What is the UNFCCC?

What is Conference of the Parties (COP)?

What is Kyoto Protocol?

What is common but differentiated responsibilities?

Kyoto protocol: How does it actually work?

#1 Emissions Trading / Carbon Trading

#2 Clean Development Mechanism (CDM)

#3 Joint Implementation (JI)

Why USA did not ratify Kyoto Protocol?

Canada Quits Kyoto protocol

What is the Copenhagen Accord?

Important Players in climate change

European Union (EU)

Alliance of Small Island State (AOSIS)

What is Rio Summit/ Earth Summit ?

It is an international treaty for reducing greenhouse gas emissions.

Developing countries like India, Brazil, China.

binding targets to reduce green house gas emission.

Back to Kyoto Protocol

Kyoto protocol: How does it actually work?

Suppose two Annex B parties are Japan and Australia.

Japan was given quota of 100 units

#3 Joint Implementation (JI)

Important Players in climate change

countries are not part of Annex B countries of Kyoto Protocol).

Tags: EnB-Treaties (http://mrunal.org/tag/enb-treaties)

ACIO Intel Officer

UPSC Civil Service

SSC CGL: Staff selection

IBPS Bank Exams

CDS: Defense Services

CAT/IIM MBA Entrance

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20-Mar: MDNL Trainee (Diploma) (http://nadrsgis1.nic.in/midhani/)

10-Apr: Himachal Specialists (http://hp.gov.in/hppsc/page/Latest-Advertisement.aspx)

30-Mar: Mumbai TGT (http://aees.gov.in/htmldocs/recruitment.html)

B.Com, CA, HR, MBA

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