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PresentationPresentationonon

Carbon TradingCarbon Trading

 Ashutosh Agrawal Ashutosh Agrawalwww.frontiers2explore.blogspot.com

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WHY A COMPANY NEEDS TO BE ETHICAL?

 ANSWER: CARBON TRADING

( A Breakthrough Solution)

ENRON, WORLD COM, TYCO ETC CORPORATE GOVERNANCE 

WHY SHOULD A COMPANY INVEST ON SOCIAL GOALS?

BRAND RECOGNITION & PRESTIGE 

BUT WHY SHOULD A COMPANY INVEST ON ENVIRONMENT

?

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What is Carbon Trading?What is Carbon Trading?

Most Severe Threat : Global Warming

Pollutants: Green House Gases

Major Green House Gas: Carbon Dioxide

Other Gases: Carbon Dioxide Equivalents

Genesis: Kyoto Protocol 1997

Intention: Reward Good Environmental Behaviour 

Punish Bad Environmental Behaviour 

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How it works?How it works?

Marrakesh Accords in 2001 Mechanism of Carbon Trading

 Annexe1 Annexe1 Non Annexe 1Non Annexe 1

Developed countries like Japan,Developed countries like Japan, Australia and that of Europe etc. Australia and that of Europe etc.

Except USAExcept USA

Developing Countries like India,Developing Countries like India,China etcChina etc

Only Annexe 1 has Pollution Cap i.e. Pollution Allowances

If Cap is Exceeded- Pay Tax

- Buy Pollution Allowances

- Buy Carbon Credits generated from CDM(Clean Development

Mechanism) & JI(Joint Implementation) projects

CarbonMarket

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Recent Growth TrendsRecent Growth Trends

ExchangeMarkets: EU ETS, UK ETS,CCX, NSW GHG Abatement SchemeExchangeMarkets: EU ETS, UK ETS,CCX, NSW GHG Abatement Scheme

World Bank ReportsWorld Bank Reports on Carbon Market:on Carbon Market:First three months transaction in 2007 > Complete Transaction of 2006First three months transaction in 2007 > Complete Transaction of 2006

Frost & Sullivan estimateFrost & Sullivan estimate -- 100 Billion Dollars by 2010100 Billion Dollars by 2010

Recent Development: Voluntary Markets

No hassles like in CDM Projects.Even individuals can pitch in.91 million dollars worth trading in 2006.

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Meteoric Growth in Carbon Credit Trading

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BUYERS SELLERS

Primary CDM Buyers & Sellers

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Carbon Assets of CDM Projects

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Promise For IndiaPromise For India

India under Non Annexe 1India under Non Annexe 1 ± ± No Cap, Can Sell Carbon Credit.No Cap, Can Sell Carbon Credit.

Makes Average Environmental Project, Above Average financially.Makes Average Environmental Project, Above Average financially.

World Bank Funding (10 million $).World Bank Funding (10 million $).

Boost to Environmental projects.Boost to Environmental projects.

NGO¶s Favourite for Rural Development.NGO¶s Favourite for Rural Development.

Eg:Eg:

Village µPowerguda¶ sold 645$ worth carbon credits in 2003.Village µPowerguda¶ sold 645$ worth carbon credits in 2003.

GFL & SRF sold 87 & 37 million $ respectively in 2006.GFL & SRF sold 87 & 37 million $ respectively in 2006.

(Installed an Incinerator to destroy Industrial Waste (HFC 23) )(Installed an Incinerator to destroy Industrial Waste (HFC 23) )

Other Projects: Dharmsala Hydro Power. Deepak Spinners etc.Other Projects: Dharmsala Hydro Power. Deepak Spinners etc.

 As on 8 As on 8thth Nov 2007, Out of 844 total registered projects, 288 from India.Nov 2007, Out of 844 total registered projects, 288 from India.

India stands second with 12% Market Share.India stands second with 12% Market Share.

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What Carbon Trading AchievesWhat Carbon Trading Achieves A Paradigm Shift A Paradigm Shift

Departure from Traditional means of Tax & RegulationDeparture from Traditional means of Tax & Regulation

Synergy B/W Environmental Goals & Economic GoalsSynergy B/W Environmental Goals & Economic Goals

Its EffectiveIts Effective

Promotes Clean Technologies in WorldPromotes Clean Technologies in World

Caveat Emptor Not a substitute for Policy Making.

R&D on Clean Technologies must go on.

Realistic Caps on Annexe 1 countries.

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Bibliography:

1. Karan Capoor & Philippe Ambrosi, µStates & Trends of the Carbon Markets 2007¶,With support of The World Bank & IETA.

2. µWindfall Profits From Carbon Trading¶, DARE ( A Cybermedia Publication), Page14, Vol 1/Issue 03/ Dec07.

3. µEmissions Trading¶, http://en.wikipedia.org/wiki/Emissions_trading4. µEmissions Trading¶, http://unfccc.int/kyoto_protocol/background/items/2880.php

5. µIndian Villages in Carbon Trading¶http://www.goodnewsindia.com/index.php/Supplement/article/indian-villages-in-global-carbon-trading/P1/

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 Ashutosh Agrawal Ashutosh Agrawal

www.frontiers2explore.blogspot.com