Welcome

To

Presentation

On

Indian Village In Carbon Trading

What do you Understand by Carbon Trading (Emission Trading) ?

It is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants.

It is the trading of permits to emit carbon dioxide (and other greenhouse gases, calculated in tonnes of carbon dioxide equivalent, tCO2e). It is one of the ways countries can meet their obligations under the Kyoto Protocol to reduce carbon emissions and thereby mitigate global warming

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Gas

EMISSIONS EMISSIONS BROKERAGE BROKERAGE

GROUPGROUP

MARKET MARKET AN AL YSISAN AL YSIS

What Is Emissions Trading?What Is Emissions Trading?What options are most cost-effective?

Company A can reduce 1000 tons CO2 E at

$2/ton = $2000

Company B can reduce 1000 tons CO2 E at

$6/ton = $6000

Company A - Seller Company B - Buyer

1000 tons CO2 E at $4/ton = $4000

SELL BUY

$2000 Profit $2000 Savings

www.economist.com/images/20050709/CFN220.gif

It is also called Cap & Trade ….

Here sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups that emit the pollutant are given credits or allowances which represent the right to emit a specific amount. The total amount of credits cannot exceed the cap, limiting total emissions to that level. Companies that pollute beyond their allowances must buy credits from those who pollute less than their allowances. This transfer is referred to as a trade. http://www.euromoneyenergy.com/pdfs/ECK145.pdf

What is Kyoto Protocol ?

From December 1 through 11, 1997, more than 160 nations met in Kyoto, Japan, to negotiate binding limitations on greenhouse gases for the developed nations, pursuant to the objectives of the Framework Convention on Climate Change of 1992. The outcome of the meeting was the Kyoto Protocol, in which the developed nations agreed to limit their greenhouse gas emissions, relative to the levels emitted in 1990.

It Entry into Force on 16 February2005

Continues……

India Signed and ratified in August 2002

Ratified by >130 countries

Major non-participants: USA and Australia

Commits industrialised countries to reducing their greenhouse gas emissions by, on average, 5% below 1990 levels in 2008-12

Individual, quantified emission targets for each industrialized country

Six greenhouse gases covered: CO2, CH4, N2O, HFC/PFC, SF6

European Union Emission Trading Scheme

The scheme, in which all 25 member states of the European Union participate, commenced operation on 1 January 2005

Under the scheme, each participating country proposes a National Allocation Plan (NAP) including caps on greenhouse gas emissions for power plants and other large point sources.

In the first phase (2005-2007), the EU ETS includes some 12,000 installations, representing approximately 45% of EU CO2 emission.

The second phase (2008-12) is to cover not only CO2, but all greenhouse gases.

Carbon Trading Cycle

http://www.co2e.com/strategies/subsolutions.asp?intcategoryid=79

Understand the Principles

Assist you in identifying and addressing these climate change issues, the direction of policy and their potential impacts on your business.

Determine Emissions & Base LineAssist in determining, monitoring and reporting your firm's emissions and baselines and identifying internal abatement opportunities.

Define Carbon Management Strategy

It offers strategic advice on how to achieve an effective carbon management strategy in a manner that best fits your risk profile, regulatory environment, capacity and existing operations

Develop a Reduction ProjectIt offers a choice of specialist services to assist in developing your emission reduction project through

Joint Implementation

Clean Development Mechanism

Verify & Monitor Emission ReductionIt provides independent greenhouse gas emission verification services involving analytical review of a data acquisition process, assessment and testing of internal controls, and the validation of data.

Register Emission Reductionprovide independent registry services for emission reductions.

Obtain Financial AdviceThe most basic strategic analysis needs to include a review of the Financial Impact of Climate Change, and sellers need CO2e Project Financing Solutions together with Structured Financial Solutions to liberate hidden value from the instruments themselves.Obtain Insurance Advice

Insurance services provide enhanced security to your climate change investments and marketability to your reductions. Risk Optimization of Carbon Offset Projects and Trading should enable you to avoid setbacks, reduce unnecessary exposures, provide access to alternative sources of project finance and enhance the competitiveness of your offers to sell emission reductions

Obtain Legal Advicesellers need Integrated CO2e Project Advice, and buyers need to understand the Legal Validity of Project Based Emission Reductions which they may be buying.

The Market For Carbon Trading

In 1998 ----18mn tons CO2 tradedIn 2004 ----107mn tons CO2 tradedIn current year the volumes have already reached levels of 43mn tons of CO2 equivalent.

Buyers of Carbon Credits in 2003-04 & 2005(Jan-Apr)

6%

12%

22%16%

29%

21%

3%4%

1%3%

6%5%3%

7%

30%32%

0%

10%

20%

30%

40%

2003-04 2005(Jan-Apr)

Source -IETA

sellers of carbon credits in 2003-04 and 2005 (Jan-April)

Source-IETA

17%14%

3%

26%

9%10%

23%

12%

0%

31%

14%

6%

22%

13%

0%

5%

10%

15%

20%

25%

30%

35%

2003-04

2005(Jan-Apr)

Instances of Carbon Trading from India

Jangubai Self Help Group of Powerguda Village in Adilabad District of Andhra Pradesh sell the equivalent of 147 tons of CO2 costs $645 from World Bank.

Jindal Vijaynagar Steel declaring to sell $225 million worth carbon(15mtons co2) over the 10 years through Corex Furnace Technology.

.

Instances of Carbon Trading from India

As many as 12 Indian firms have been cleared for "carbon trading", the Union Environment Minister, T.R. Baalu said(1st july,2003)

Canara Bank has offered to provide cash subsidy for solar water heater installations by trading certified emission reduction with 37 industrially advanced countries under the Kyoto Protocol, individuals in India can sell their reduction of carbon emissions with the help of the government so that the developed countries can emit that much more pollution.

Way Ahead

Overall objective is to Link to United Nation's Millennium Development Goal -7 “Ensure Environmental Sustainability” Integrate the principles of sustainable development into country policies and programmes.

Appendix Clean Development Mechanism (CDM) is a way to earn credits by investing in emission reduction projects in developing countries. International Emissions Trading (IET) will permit developed countries that have taken on a Kyoto target to buy and sell credits among themselves

Joint Implementation (JI) is a project-based mechanism developed under the Kyoto Protocol (KP), designed to assist some countries in meeting their emission reduction targets through joint projects with other countries, meaning that JI projects can only be implemented between capped industrialised countries. One or more investors (Governments, companies, funds etc) will agree with partners in a host country to participate in project activities which generate Emission Reduction Units (ERUs) , in order to use them for compliance with targets under the Kyoto Protocol

References

www.economist.com/images/20050709/CFN220.gif

http://www.euromoneyenergy.com/pdfs/ECK145.pdf

http://www.co2e.com/strategies/subsolutions.asp?intcategoryid=79

IETA

http://en.wikipedia.org/wiki/Greenhouse_gas

http://www.goodnewsindia.com/index.php/Supplement/article/320/

http://www.downtoearth.org.in/new_letter.asp?foldername=20060131&sec_id=1

http://www.telegraphindia.com/1060522/asp/business/story_6253493.asp

Thanks for

Co operating

Purnendu Bikash Giri

Roll No-----32