CARBON CREDITSCARBON CREDITS

TOPICS WE WILL TALK ABOUT…TOPICS WE WILL TALK ABOUT… INTRODUCTION

CLIMATIC CHANGES

CO2 EMISSIONS BY INTERNATIONAL COUNTRIES

WHAT IS CARBON FOOTPRINTS ?

CARBON CREDITS

HOW IT CAME INTO BEING?

KYOTO PROTOCOL

EMISSION ALLOWANCES

BUYING CARBON CREDITS

CARBON TRADING

SETTING A MARKET PRICE

INDIVIDUAL CARBON CREDITS

CASE STUDY

INDIAN SCENARIO

TRADERS IN INDIA

ADVANTAGES AND DISADVANTAGES

• CONCERNS

• FUTURE OUTLOOK

CONCLUSION

CLIMATIC CHANGESCLIMATIC CHANGES

INCREASING SEA LEVEL

INCREASING SEA LEVEL

CHANGES IN WIND AND PRECIPITATIONCHANGES IN WIND

AND PRECIPITATIONCHANGES IN CROP

YEILDSCHANGES IN CROP

YEILDS

COCO22 EMISSIONS BY INTERNATIONAL EMISSIONS BY INTERNATIONAL COUNTRIESCOUNTRIES

CARBON FOOTPRINTCARBON FOOTPRINT

"A measure of the total amount of carbon dioxide (CO2) and methane (CH4) emissions of a defined population, system or activity, considering all relevant sources, sinks and storage within the spatial and temporal boundary of the population, system or activity of interest. Calculated as carbon dioxide equivalent (CO2e) using the relevant 100-year global warming potential (GWP100)”

DEFINITIONDEFINITION

A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide.

In short…

1 Carbon Credit = 1 ton of carbon dioxide

HOW IT CAME INTO BEING?HOW IT CAME INTO BEING?

KYOTO PROTOCOLKYOTO PROTOCOL

EMISSION ALLOWANCESEMISSION ALLOWANCES

An allowance to emit one metric tonne of carbon

dioxide equivalent entered into country’s national

registry.

Operators can sell their unused allowances as carbon

credits.

Operators needing more carbon credits can buy it

privately or in the open market.

BUYING CARBON CREDITS AND BUYING CARBON CREDITS AND REDUCING EMISSIONSREDUCING EMISSIONS

CARBON TRADINGCARBON TRADING

Carbon trading is an administrative approach used to control pollution by providing incentives for achieving reductions in emissions of pollutants.

Overall goal of an carbon emission trading plan is to minimize the cost of meeting a set emissions target.

SETTING A MARKET PRICE FOR SETTING A MARKET PRICE FOR CARBON..CARBON..

Optimal carbon price is the market price on carbon emissions that balance the incremental costs of reducing carbon emissions with the incremental benefits of reducing climate change.

Price of carbon in market is raised. It can achieve four goals.

Carbon Credits are traded at CO2 exchange in UK, CDM exchange in Europe and the Chicago climate exchange.

Current carbon credit price was Rs 752.5 as traded on 16/3/11.

INDIVIDUAL CARBON CREDITSINDIVIDUAL CARBON CREDITS

Individual credits for public transport.

Individuals who exceed their allocation would be able

to purchase additional credits from those who use

less.

Personal carbon trading has been criticized for its

high implementation costs.

Personal carbon trading would be a progressive

policy, redistributing money from the rich to the poor

- as the rich use more energy than the poor.

CASE STUDY CASE STUDY

A green stealth tax is a tax levied in such a way that is largely unnoticed, or not recognized as a tax.

Large public and private sector organizations forces hospitals, fire brigade, etc. to register for the scheme to buy the credits for their emissions.

Crossing the limits of carbon credit leads to heavy penalization.

Rewarding credits are awarded for staying within the prescribed limits.

CASE STUDY CASE STUDY

An efficient mechanism to reduce green house gas emissions in rural India.

A proposal of mathematical model based household biogas plant project for energy self sufficiency in rural India.

A research study carried out in 10 villages of Jhunjhunu district of Rajasthan.

Main aim was to make the project economically feasible by earning income from the sales of carbon credits through the project.

INDIAN SCENARIOINDIAN SCENARIO India comes under a non-annex country. According to a report, the total CO2 equivalent emissions in

2007were 1,612,362.00 in thousands of metric tones. Prices of carbon products are expected to rise in future to

meet targets. There are some major sources of GHG’s emission in India.

Many CDM projects have come up for future.

ADVANTAGES AND ADVANTAGES AND DISADVANTAGESDISADVANTAGES

ADVANTAGES Better technologies for the company which is benefiting

from generation of CERs. Technology transfer from developed to developing countries

(Due to low cost structure in developing countries). Additional source of foreign investment in developing

countries which act as a catalyst in developing cleaner technologies.

Channel CDM funds to investment priorities – The CDM funds can be channelized into building or improving projects, thus reinvesting it for higher growth.

Development of cleaner technologies leading to sustainable development where countries have a strategic advantage from now in terms of pollution.

Environmental benefits due to lesser GHG emissions.

DISADVANTAGES Provision of cheapest way of purchasing climate

destroying right. Due to nature and process of complexity involved,

foreign players may dominate domestic industries for the incentive if CERs.

CDM investment could affect national development strategies, possibly adversely affecting national decision-making processes. Until future commitment periods are agreed, the CDM may not provide incentives for financing long-term development projects and strategies.

CONCERNS CONCERNS

Projects take approximately 2 years to be issued.

India is still not counted among the top three carbon credit nations because of its project rejection rate.

The projects show shortfall in the techniques and methodology.

FUTURE OUTLOOKFUTURE OUTLOOK

Carbon reduction targets to be announced by

regulatory bodies.

Increasing carbon credits demand will lead to increase

in the size of carbon credit market.

CONCLUSIONCONCLUSION

The world must take action to cut carbon dioxide

emissions. And this action needs to be reconciled with

increasing energy demand from a rising population

and economic growth.

REFERENCESREFERENCES

www.google.com

www.studygalaxy.com

www.authorstream.com

www.scibd.com

THANK YOUTHANK YOU