FLOW OF THE PRESENTATION

OBJECTIVES
OVERVIEW OF CARBON MARKETS
CARBON TRADING IN INDIA
OPPORTUNITIES FOR INDIA IN GLOBAL
CARBON MARKET
RISKS AND POTENTIAL HURDLES
REFERENCES

OBJECTIVES
To study the mechanics of Carbon Emissions
Trading Market in India.
To identify the opportunities for India in the Global
Carbon Trading Market
To study the impact of carbon trading on a
companys bottom line.
OVERVIEW OF CARBON
MARKETS
Carbon Emissions Trading is primarily done by using
CARBON CREDITS.

CARBON CREDIT or CERTIFIED EMMISION
REDUCTION (CER) is a permit that allows the holder/
buyer to emit one ton of carbon dioxide.

Kyoto Protocol has given 3 mechanisms through
which a country can earn carbon credits and also
trade in the same.
CLEAN DEVELOPMENT MECHANISMS (CDM)
JOINT IMPLEMENTATION (JI)
EMISSIONS TRADING
INDIAN SCENARIO
As per the conventions of Kyoto protocol, India
being a developing country has no emission
targets to be followed. However, she can enter
into CDM projects.
As per the data by FICCI of November 2011,
India had 2,123 approved CDM projects. Of
these, 738 were registered with the United
Nations Framework Convention on Climate
Change.
India and China are the biggest sellers of CERs
worldwide, Europe being the largest buyer.
Carbon is being traded on the Multi Commodity
Exchange, making it the 1
st
exchange in Asia to
trade carbon credits.
India has generated some 30 million
carbon credits and has roughly another
140 million to push into the world
market.

Waste disposal units, plantation
companies, chemical plants and
municipal corporations can sell the
carbon credits and make money.
The India's Delhi Metro Rail Corporation (DMRC)
has become the first rail project in the world to
earn carbon credits because of using
regenerative braking system in its rolling stock.
DMRC has earned the carbon credits by using
regenerative braking system in its trains that
reduces 30% electricity consumption. The project
got registered with UNFCCC in 2007 and can
currently claim 400,000 CERs for a 10-year
beginning from December 2007 when the project
was registered by the UNFCCC. This translates
to Rs 1.2 crore per year for 10 years.
OPPORTUNITIES FOR INDIA
Till 2010, CDM projects worth US$ 100 million are
registered in India.
Indias per capital emission figures as compared to
other nations is very low; India is being viewed as one
of the potential countries for CDM projects.
India too has been on the forefront with regard to
developing an active trading market for these carbon
credits. Multi Commodity Exchange of India Limited
(MCX) in alliance with the Chicago Climate Exchange
had introduced carbon credit trading in India in 2005.
Futures trading in carbon credits began in 2008 that
made MCX the first commodity exchange in Asia to
trade in carbon futures.
India Inc pocketed Rs 1,500 crores in the year
2005 just by selling carbon credits to developed-
country clients
Various projects would create up to 306 million
tradable CERs.
Analysts claim if more companies absorb clean
technologies, total CERs with India could touch
500 million.

RISK FACTORS FOR INDIA
India still does not have a proper policy for trading
of carbons in the market.
India has huge number of carbon credits sellers
but under the present Indian law, the buyers
based in European market are not permitted to
enter the market.
To unleash the true potential of carbon trading in
India, it is important that a special statue be
created for this purpose as the Indian Contracts
Act is not enough to govern the contractual
issues relating to carbon credits.
Accounting and taxation issues
REFERENCES
Presentation on Carbon Credits and Kyoto
Protocol at BIMT, 16th october 2010
Emissions Trading". UNFCCC. Retrieved 2010-04-28.
LarryLohmann: Uncertainty Markets and Carbon
Markets. Variations on Polanyian Themes, New
Political Economy, first published August 2011,
abstract and full text
Clean Development Project Opportunities in India,
TERI New Delhi, January 2001
http://cdmindia.nic.in/cdm_india.htm
The Kyoto Protocol,
http://unfccc.int/kyoto_protocol/items/2830.php,
http://carbonfinance.org/Router.cfm?Page=FAQ&ItemI
D=24677#2