Seminar of Carbon credits on 9thnov.

2011

BY:SUPRIYA PANDEY 2010PCE118

CONTENTS
Introduction with Carbon Credits Purpose of Carbon Credits Measures to control Pollution Kyoto protocol of UNFCCC Kyoto Mechanisms Carbon trading Carbon Credits in India Credits or taxes Benefits and drawbacks of Carbon credits Conclusion References

WHAT IS CARBON CREDIT??

It is the generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or carbon dioxide equivalent. Carbon credits are Entitlement Certificates issued by the United Nations Framework Convention on Climate Change (UNFCCC) The value of one CER in Indian Rupees is approx Rs. 1500/
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FOUR TYPES OF CARBON CREDITS

EUAs European Union Allowances are issued freely by the EU for several years, for use within the Emission Trading Scheme (EU ETS).The ETS second phase began Jan 1 2008 and ends Dec 31 2012. CERs Certified Emission Reductions are issued by the UNFCCC for demonstrable reductions of greenhouse gas emissions in Clean Development Mechanism (CDM) Projects under Article 12 of the Kyoto Protocol. ERUs Emission Reduction Units are credits created under Article 6 of the Kyoto Protocol, Joint Implementation (JI). VERs Verified Emission Reductions are issued by independent bodies for demonstrable reductions of greenhouse gas emissions in projects that, fall outside of the CDM.
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PURPOSE OF CARBON CREDITS

Key idea is to encourage companies to reduce the emission of carbon and Green House Gases (GHGs) UNFCCC came out with concept of Certified Emission Reductions (CER) based on the Industry standards. Companies emitting lesser carbons than industry standard gets Credits by way of CERs. Carbon Credit reduced is equivalent to one metric tonne of carbon dioxide or its equivalent GHG.

KYOTO & MEASURES TO CONTROL POLLUTION

The Kyoto Protocol was initially adopted on 11th December 1997 in Kyoto, Japan, and entered into force on 16 February 2005. As of September 2011, 191 states have signed and ratified the protocol. 165 countries signed the Kyoto Protocol till 1990. The Convention divides countries into two groups Annexure-I Countries (developed) Non-Annex I Countries(developing)

KYOTO Protocol

Annex I Non-Annex I Not ratified

Annex I
Australia(Not ratified) Austria Belgium Monaco Canada Netherland New zealand United Kingdom Germany Spain Switzerland Greece

Non -Annex-1
India Bangladesh Brazil China Afghanistan Algeria Nepal Argentina Bolivia Srilanka Pakistan Malaysia Mauritius

CONTD..
Annex I (developed countries) agreed to reduce their GHGs by 5.2 % below 1990 levels in 1st commitment period 2008 2012. It was agreed that an incentive system for nonAnnex-I countries(developing countries) to reduce green house gas emissions. A company has two ways to reduce emissions1. One, it can reduce the greenhouse gases by investing new technology or machinery. 2. Or it can tie up with developing nations and earn credits.

KYOTO MECHANISM
The Kyoto Protocol is binding on industrialized or developed countries to specify targets for reducing their green house emissions. KP Provides three mechanisms to supplement national actions to achieve real, long term measurable cost effective GHG reductions: Clean Development Mechanisms (CDM) International Emission Trading (IET) Joint Implementation (JI)

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CLEAN DEVELOPMENT MECHANISM (CDM)

Developed country (needs CC)

Technology transfer and project Developing financing Country

Earns CC called Certified Emission Reduction

Sells carbon credits

CONTD.
Agencies agreed to adopt the following concepts in making CDM projects: 1) Energy from wastes 2) Use of CFL and Electric Chokes 3) Solar Water Heating Systems 4) Efficient Street-lighting 5) Efficient use of water pumps 6) Energy efficient buildings 7) Promotion of LEDs 8) Windpower &hydropower 9) Afforestation
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ru.wikipedia.org

EMISSION TRADING
Payment for CC

Developed country A (needs CC)

Developed country B Earns carbon credits called Assigned Amount Units

Sell these carbon credits

JOINT IMPLEMENTATION

Sets a project Developed country A (needs CC)

Sell carbon credits

Developed country B Earns carbon credits called Emission Reduction Units

COMPANIES REGISTERED WITH UNFCCC

Gujarat Ambuja Cement, Jindal Vijayanagar Steel, Indian Rayon&Industries, Triveni Engineering, Balrampur Chini Mills, SRF Ltd, Gujarat Fluorochemicals, Birla Corporation Ltd, DCM Shriram Consolidated Ltd, Oswal Woolen Mills, TataSteel, Usha Martin Ltd, JK Cement,Birla Cement and Kalpataru Power Transmission Ltd(KPTL)among others

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CARBON TRADING??

An idea presented in response to the Kyoto Protocol that involves the trading of greenhouse gas (GHG) emission rights between nations. For example, if Country X exceeds its capacity of GHG and Country Y has a surplus of capacity, a monetary agreement could be made that would see Country X pay Country Y for the right to use its surplus capacity.

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INDIAN SCENARIO:India is at 4th Position in CDM global market and more awareness is required to bring it to1st position. India captures a 10% share of the global CDM market. Annual CER revenues range from US$ 10 million to 300 million . India is well ahead in establishing a full-fledged system in operationalising CDM, through the Designated National Authority (DNA). 1/3rd of the total CERs issued by the UNFCCC exists in India.

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CONTD..
Of the 391 projects sanctioned, the UNFCCC has registered 114 from India, the highest for any country. Indias average annual CERs stand at 12.6% or 11.5 millions. An Indian firm, J.S.W Steel won the largest CER of 5.4 million in 2 projects. Multi-commodity exchange has traded CERs of Rs.1000 crores so far with participation by 85 members and 91 clients.

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CREDITS OR TAXES
1. Carbon taxes address emissions of carbon from every sector, whereas some cap-and-trade systems discussed to date have only targeted the electricity industry, which accounts for less than 40% of emissions. 2.Carbon tax revenues would most likely be returned to the public through dividends or progressive tax-shifting, while the costs of cap-and-trade systems are likely to become a hidden tax as dollars flow to market participants, lawyers and consultants.

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ADVANTAGES OF CARBON CREDITS

Carbon credits system helps in storing carbon in the soil which helps in green growth and purification of the atmosphere. Energy saved means energy gained, saving energy will gradually put up for gaining it which will increase efficiency, plus make way for better avenues of energy.

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DISADVANTAGES
The biggest drawback of carbon trading is conducted in the global market, it is difficult for regional enterprises to make use of this system. Theoretically, this scheme must bring down the overall level of carbon emissions.In reality,credit trading shifts pollution from one place to another, in fact from one company to another. A lot of third parties appear in the system and a global regulatory body lacks. Theoretically,instead of reducing our own carbon emissions, we are paying other people to reduce theirs.

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CONCLUSION
I would say that the world should start off with carbon taxes as it would initiate the seriousness and the thought process, and in the meanwhile,create a global general regulating body omitting majority of third parties and come up with a strong regulated and networked body of the carbon credit system. If proper monitoring is done, and positive results are indicated, the carbon credit system can pave way for a great future.

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REFRENCES

Eric Johnsona, Russell Heinenb; Carbon trading: time for industry involvement; Environment International 30 (2004) 279 288. Peter Viebahn a, Joachim Nitsch a, Manfred Fischedick b, Andrea Esken b,Dietmar Schu wer b, Nikolaus Supersberger b, Ulrich Zuberbu hler c, Ottmar Edenhofer; Comparison of carbon capture and storage with renewable energy technologies regarding structural, economic,and ecological aspects in india;international journal of greenhouse gas control 1 ( 2 0 0 7 ) 12 1 13 3. Lucas Skoufa, RickTamaschke ; Carbon prices, institutions, technology and electricity generation firms in two Australian states; Energy Policy international 39 (2011) 26062614. S H Arjunwadhar, Prosanto Pal and Girish Sethi;Energy savings and carbon credits; Indian Foundry Journal, Vol. 53, No.8, August 2007, pp 27-30.
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C. zgen Karacan a, Felicia A. Ruiz b, Michael Cot c, Sally Phipps;Coal mine methane: A review of capture and utilization practices with benefits to mining safety and to greenhouse gas reduction; International Journal of Coal Geology 86 (2011) 121156. D. Humphreys ;Sustainable development: can the mining industry afford it?; Resources Policy 27 (2001) 1 7. Jeffrey M. Karp and Benjamin J. Armour ZAG/S&W LLP; Opportunities in the Emerging Carbon Credit Market; J. BIOLAW & BUS., Vol. 12, No. 2, 2009. www.geotech.co.uk www.deloitte.com.uk www.carbonfund.org 27

THANK YOU

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