avdesh singh
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INTRODUCTION TO THE TOPIC
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INTRODUCTION TO THE TOPIC
The project purports to throw some light on the concept of Carbon
credit. A permit that allows the holder to emit one ton of carbon
dioxide. Credits are awarded to countries or groups that have reduced
their greenhouse gases below their emission quota. Carbon credits can
be traded in the international market at their current market price.
Global warming refers to the recent increase in the Earth's
temperature. The effects of this climate change are already being felt
around the world. Scientists predict that temperatures will rise up to
6C further over the next century. This may cause rises in sea level,
extreme weather events such as hurricanes and heat waves, and war
and disease, particularly in developing countries.
The ideal solution would be an immediate and drastic drop in global
carbon emissions. However this is not going to happen in our lifetimes.
In fact, rapid economic development in countries such as China and
India, as well as ongoing growth in the rest of the world, mean that
carbon emissions are still increasing year on year. The Kyoto protocol is
a first international attempt to address the issue seriously, but it has
met with limited success.
The data was collected and analyzed to obtain conclusions. This report
carries an introduction of the Carbon Credit, detail of the methodologyfollowed detailed data analysis and the results so obtained with the
variety of graphs along with given report.
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EXECUTIVE SUMMARY
I, Avdesh Singh get loyal opportunity to take interest and to survey
entire world economy which is facing problem gaining Carbon Credit.
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This study is conducted to study the impact of carbon trading on Indian
companies.
With the increase in Greenhouse Gas (GHG) emissions in the
atmosphere, the global temperature has been on a constant rise. In last
65 years the amount of anthropogenic (made or induced by humans)
carbon dioxide has risen from 280 parts per million to 380. With the
current energy mix favoring the use of fossil fuels, the level is expected
to increase at a rapid pace. This has led to a global phenomenon called
the Greenhouse Effect. By increasing day to day pollution from various
industry in our locality region or as well as overseas Industry like US,
Europe, Asia etc. Basically our projects related to the carbon emission
reduction in developing countries. Carbon dioxide, the most important
greenhouse gas produced by combustion of fuels, has become a cause
of global panic as its concentration in the Earth's atmosphere has been
rising alarmingly. Carbon credits are a part of international emission
trading norms. They incentivize companies or countries that emit less
carbon. The total annual emissions are capped and the market allocatesa monetary value to any shortfall through trading. Businesses can
exchange, buy or sell carbon credits in international markets at the
prevailing market price.
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WHAT IS GREENHOUSE EFFECT?
The sun heats up the earth by sending solar rays towards us. Some of
these rays dont get through our atmosphere. Those that do, warm up
the earth. When the earth warms up it radiates its own rays of heat
infrared rays. Greenhouse gases absorb those, which dont escape past
the atmosphere. These greenhouse gases warm the earth so it is at the
temperature we experience now. Without this process the earth would
be some 30o C cooler and life on our planet would be very different.
However, we are producing too many greenhouse gases, which mean
they are absorbing more heat and warming the earth too much this is
called global warming. One of the main greenhouse gases is carbon
dioxide, which can be created from chopping down and burning of
trees. The fuel used in cars and machinery also creates carbon dioxide,
as do coal and natural gas. Therefore, if we reduce the use of fuel and
reduce deforestation, the amount of greenhouse gas around earth
should also be reduced. Scientists say it is already too late to prevent
global warming and therefore climate change, but by reducing
greenhouse gases we could still limit the impact. Even a change in
temperature of under 1 o C is enough to cause changes in rainfall.
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EFFECT OF GLOBAL WARMING
Seawaters could rise almost a meter in this century, and willcontinue to move up.
Some coastal regions already see seasonal flooding, and thesituation is expected to worsen as water levels rise.
Coral reefs are under pressure from changes in water level andtemperature. As most carbon goes into sea, plankton could suffer,
and that would affect species higher up the food chain.
Temperature becomes pretty unstable these days. A summerbecomes much hotter and a winter becomes much colder.
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WHAT IS CARBON CREDIT?
As nations have progressed we have been emitting carbon, or gases
which result in warming of the globe. Some decades ago a debate
started on how to reduce the emission of harmful gases that
contributes to the greenhouse effect that causes global warming. So,
countries came together and signed an agreement named the Kyoto
Protocol.
India and China are likely to emerge as the biggest sellers and Europe is
going to be the biggest buyers of carbon credits.
Last year global carbon credit trading was estimated at $5 billion, with
India's contribution at around $1 billion. India is one of the countries
that have 'credits' for emitting less carbon. India and China have surplus
credit to offer to countries that have a deficit.
India has generated some 30 million carbon credits and has roughly
another 140 million to push into the world market. Waste disposalunits, plantation companies, chemical plants and municipal
corporations can sell the carbon credits and make money.
Carbon, like any other commodity, has begun to be traded on India's
Multi Commodity Exchange since last the fortnight. MCX has become
first exchange in Asia to trade carbon credits.
Developed countries, mostly European, had said that they will bring
down the level in the period from 2008 to 2012. In 2008, these
developed countries have decided on different norms to bring down
the level of emission fixed for their companies and factories.
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A company has two ways to reduce emissions. One, it can reduce the
GHG (greenhouse gases) by adopting new technology or improving
upon the existing technology to attain the new norms for emission of
gases. Or it can tie up with developing nations and help them set up
new technology that is eco-friendly, thereby helping developing
country or its companies 'earn' credits.
India, China and some other Asian countries have the advantage
because they are developing countries. Any company, factories or farm
owner in India can get linked to United Nations Framework Convention
on Climate Change and know the 'standard' level of carbon emission
allowed for its outfit or activity. The extent to which I am emitting less
carbon (as per standard fixed by UNFCCC) I get credited in a developingcountry. This is called carbon credit.
Carbon dioxide, the most important greenhouse gas produced by
combustion of fuels, has become a cause of global panic as its
concentration in the Earth's atmosphere has been rising alarmingly.
This devil, however, is now turning into a product that helps people,
countries, consultants, traders, corporations and even farmers earnbillions of rupees. This was an unimaginable trading opportunity not
more than a decade ago.
Carbon credits are a part of international emission trading norms. They
incentivize companies or countries that emit less carbon. The total
annual emissions are capped and the market allocates a monetary
value to any shortfall through trading. Businesses can exchange, buy or
sell carbon credits in international markets at the prevailing marketprice.
India and China are likely to emerge as the biggest sellers and Europe is
going to be the biggest buyers of carbon credits.
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Last year global carbon credit trading was estimated at $5 billion, with
India's contribution at around $1 billion. India is one of the countries
that have 'credits' for emitting less carbon. India and China have surplus
credit to offer to countries that have a deficit.
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.
Carbon, like any other commodity, has begun to be traded on India's
Multi Commodity Exchange since last the fortnight. MCX has become
first exchange in Asia to trade carbon credits.
So how do you trade in carbon credits? Who can trade in them, and at
what price?
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HOW DOES IT WORK IN REAL LIFE?
ASSUME THAT BRITISH PETROLEUM IS RUNNING A PLANT IN THE UNITED
KINGDOM.SAY, THAT IT IS EMITTING MORE GASES THAN THE ACCEPTED NORMS OF
THE UNFCCC.IT CAN TIE UP WITH ITS OWN SUBSIDIARY IN, SAY,INDIA OR CHINA
UNDER THE CLEAN DEVELOPMENT MECHANISM.IT CAN BUY THE 'CARBON CREDIT'
BY MAKING INDIAN OR CHINESE PLANT MORE ECO-SAVVY WITH THE HELP OF
TECHNOLOGY TRANSFER.IT CAN TIE UP WITH ANY OTHER COMPANY LIKE INDIAN
OIL [GET QUOTE], OR ANYBODY ELSE, IN THE OPEN MARKET.
In December 2008, an audit will be done of their efforts to reduce gases
and their actual level of emission. China and India are ensuring that
new technologies for energy savings are adopted so that they become
entitled for more carbon credits. They are selling their credits to their
counterparts in Europe. This is how a market for carbon credit is
created.
Every year European companies are required to meet certain norms,
beginning 2008. By 2012, they will achieve the required standard of
carbon emission. So, in the coming five years there will be a lot of
carbon credit deals.
http://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltdhttp://money.rediff.com/money/jsp/quote_process.jsp?query=indian%20oil%20corporation%20ltd -
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UNDERSTANDING THE SYSTEM
AND LOGIC BEHIND IT
Science has correlated climate over the ages with core samples from ice
sheets and found that carbon dioxide levels fluctuate with climatic
events. Only recently has science been able to understand how this
CO2 actually works to trap the heat in the atmosphere and by calling it
the greenhouse effect gives us the basic understanding of what goes
on.
Its pretty simple really in theory. All growing things absorb carbon
which ultimately ends up in the soil. Planting trees reduces the carbon
in the atmosphere but not if they are then cut down and burnt and
crops that are planted and harvested will not actually store carbon
within them. Long term plans are needed. Crops can be farmed in such
a way that the soils are not ploughed to let the stored carbon escape.Weeds and borders to fields can be encouraged. Forests can be left to
stand. Fuel usage can be cut and power generation can be more
efficient and all this reduced consumption of carbon will mean that less
carbon credits will have to be purchased.
The money that purchases carbon credits will ultimately be used to give
grants to further carbon saving schemes. New Zealand has alreadyfunded some wind generation projects from the money gained from
selling carbon credits. Ireland has recently purchased 95% of its carbon
credits from overseas to offset the millions of tons of CO2 its industries
will develop for the forthcoming year. The other 5% will come from
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internally as they have new practices of farming and bean planting
trees since 1990. Some tree bound countries do not necessarily have
loads of carbon credits to sell as they have not made any attempts to
increase the number of trees since 1990. There are complications to beconquered though. In Australia, Virgin has tried to introduce its airline
but has been deterred by the need to offset its CO2 pollution by the
purchase of Carbon Credits which makes them uncompetitive.
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HOW DO CARBON CREDITS SAVES
THE PLANET
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