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Carbon trading as a cdm strategy b.v.raghunandan
 

Carbon trading as a cdm strategy b.v.raghunandan

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    Carbon trading as a cdm strategy b.v.raghunandan Carbon trading as a cdm strategy b.v.raghunandan Presentation Transcript

    • Carbon Trading as a CDM Strategy-B.V.Raghunandan, SVS College, Bantwal
      School of Management Studies,
      University of Calicut, Kuttipuram, Kerala
      February 23, 2011
    • The Constitution of India
      It is the duty of the state to, “protect and improve the environment and to safeguard the forests and wildlife of the country”
      It is the duty of every citizen, “to protect and improve the natural environment including forests, lakes, rivers and wildlife”
      It required Bhopal Gas Tragedy to make the Government to realise its duty to pass Environment Protection Act in 1986
    • Certain Bitter Facts
      Modern life is imported
      Modern gadgets are imported
      Pollution is imported
      Environment Protection is also imported
    • Global Warming: Wrong Direction
      Concerns about global warming
      Concern was about the increase in temperature
    • Corrected Agenda
      The Stockholm Convention,1995
      Governing Council of the United Nations Environment Programme called fro Global action against Persistent Organic Pollutants, defined as, "chemical substances that persist in the environment, bio-accumulate through the food-web, and pose a risk of causing adverse effects to human health and the environment”
    • Earth Summit
      Held in 1992 in Rio De Janeiro
      Set up UNFCCC (United Nations Framework Convention on Climate Change)
      Confronting anthropogenic interference with the earth’s climate system
      Prevention of climate change through reduction of green house gases to 1990 levels by 2000 and a 5.2% reduction by 2008-12
      Common but differentiated responsibilities
    • Kyoto Protocol
      Adopted in 11 December, 1997 in Kyoto, Japan
      Brought into force from February 16, 2005
      Totally 192 countries ratified the Protocol
      The USA, the prime polluter of the world has no intention of signing the Protocol
    • Elements of Kyoto Protocol
      Divided the countries into Annex I Countries and Annex II Countries
      Annex I include developed countries that have obligations to reduce GHG emissions to 1990 levels by 2000 and 5.1% below 1990 levels by 2008-12
      Annex II include developing countries not having any such obligations
    • Elements …….contd.
      Gases identified were carbon di oxide, methane, nitrous oxide, sulphur hexafluoride, hydrofluorocarbonand perfluorocarbon
      Flexible Mechanisms: Clean Development Mechanism: carbon credit and trading
      Joint Implementation for countries in transition (Soviet Union, Central and eastern Europe)
    • Clean Development Mechanism
      A CDM Executive Board was set up
      It will assess and approve projects in Annex II countries
      These projects will be awarded Certified Emission Reduction
      Annex I countries can meet their GHG emission limitations by buying CERs (measured in carbon credit)
    • Carbon Credit and Trading
      One carbon credit is equal to one metric tonne of carbon di oxide emission or one metric tonne of burning up oil
      A trading mechanism is created for determining the price on the basis of supply and demand
      Industrial units in Annex I countries can instal pollution control equipment or buy the carbon credits from Annex II countries
    • Obligations of Kyoto Protocol
      Green-Annex I countries-having obligation
      Red-Annex II countries-not having the obligation
      Yellow-In Transition countries-Joint Implementation
    • Ratification of Kyoto Protocol
      Green-Countries that have ratified the protocol
      Red-Refused to ratify
    • CDM Project Cycle
      Stages: Project Idea, Development, Approvals, Validation, Registration and Issue of CERs
      Finance: Debt, Equity, CER Forward Buying or CER Spot Buying
      Price: Fixed Price, Floating Price and the Combo
    • Trading Mechanism
    • Carbon Dioxide Emission
    • Carbon di Oxide Emission
       
      The USA  25.2%  
      China 15.2%  
      Russia 6.7%  
      Japan 5.4%  
      India  4.4%
      Germany 3.7%
      U.K  2.4%
      Canada  2.3%
      Italy 2%
      Mexico  1.7%
      France 1.6%
    • Eligibility to Participate
      The country should have ratified the protocol
      The project should have calculated the assigned amount of carbon emission
      Establish a national system for estimating emissions and removals of greenhouse gases within the country.
      They must have in place a national registry to record and track and must annually report such information to the secretariat.
      They must annually report information on emissions and removals (carbon sinks) to the secretariat.
    • Indian Scenario
      Top Energy Guzzlers Million mt
      Thermal Power 160.3
      Iron & Steel 36.1
      Cement 14.5
      Fertilisers 12
      Textiles 4.5
      Aluminium 2.4
      Pulp and Paper 1.4
    • Indian Environment Laws
      1882:The Easement Act allowed private use of ground water and made all surface water a state property
      1927: Indian Forest Act (Amended in 1984)-trnsit of forest produce and the duties leviable
      1948: The Factories Act: (Amendment in 1987)-application to hazardous processes
      1970: The Merchant Shipping Act: waste arising from ships
      1972: The Wildlife Protection Act: (Amended in 1991)
      1974: The Water(Prevention and Control of Pollution Act)
      1980: The Forest (Conservation) Act
      1981: The Air (Prevention and Control) Act
    • Indian Environment Laws…contd
      1982: The Atomic Energy Act ..Radioactive waste
      1986; The Environment Protection Act
      1988: The Motor Vehicles Act: …hazardous waste
      1991: The Coastal Regulation Zone…construction along coastal line
      1991: The Public Liability Insurance Act …accidents due to hazardous material
      1999; The Environment (siting for industrial projects) Rules
      2000: The Ozone Depleting Substance (Regulation and Control) Rules
      2001: The Batteries (Management and Handling) Rules
      2002: The Noise Pollution Rules
      2002: The Biological Diversity Act
    • Indian Authority
      Ministry for Environment and Forests is the designated national authority
      Many companies have been registered as carbon traders
      MCX has tied up with ECX for offering Hedging and futures trading
      Both futures and OTC products are introduced
    • Carbon Traders in India
      Grasim Industries Limited
      Tata Motors Limited
      Tata Steel Limited
      Tata Power Company Limited
      Reliance Energy Limited
      Indo Gulf Fertilizers Limited
      Valera Global Limited
      Andhyodhaya Green Energy Limited
      Indus Technical and Finance Limited
      Rajasthan Renewable Energy Corporation
      Bajaj Financial Services Limited
      Blue Star Engineering Services Limited
    • Arguments in Favour of carbon Trading
      Polluting countries must be penalised
      Polluting countries should pay a price
      Projects in Annex I countries have an option: Install pollution control equipment or buy the carbon credit
      Enable the projects in developing countries to partially finance the energy saving plans
    • Arguments Against……
      As Annex II countries have no obligations, MNCs will go to these countries through FDI
      Developed countries produce the goods that are consumed in developing countries-the user must be penalised than the producer
      Obligations should be on all the countries
      Further temperature differential
    • Future of Carbon Trading
      Looks Bleak
      The USA has convinced 13 industrialised nations to set up a new protocol after 2012
      The countries can have the arrangement internally
      The steam has gone out of the movement
    • Alternative: Get out of Popular Misconceptions
      Misconceptions are:
      Nuclear energy is safer than thermal
      Wind energy protects environment
      All smoke is the same
      All the smoke is bad for the environment
      Clean environment through phenyl
      Clean water through chlorine
    • Alteration of Business Models
      Miniaturisinghydel projects
      Developing technology for smaller units of production for local consumption
      Avoiding criss-cross movement of transportation
      Actively encouraging research in fuel cells
      Hybrid automobiles with fuel cells being one of the fuel
    • Redefining Forest and Animal Welfare
      Man-Animal co-existence
      Encourage usage of animals in transportation
      Killing of wild animals alone should be banned
      Encourage rearing wild animals
      Encourage private Tiger Farms along with tiger national parks
    • THANK YOU