Emerging trends in indian marketing b.v.raghunandan
Carbon trading as a cdm strategy b.v.raghunandan
1. Carbon Trading as a CDM Strategy-B.V.Raghunandan, SVS College, Bantwal School of Management Studies, University of Calicut, Kuttipuram, Kerala February 23, 2011
2. 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
3. Certain Bitter Facts Modern life is imported Modern gadgets are imported Pollution is imported Environment Protection is also imported
4. Global Warming: Wrong Direction Concerns about global warming Concern was about the increase in temperature
5. 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”
6. 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
7. 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
8. 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
9. 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)
10. 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)
11. 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
12. Obligations of Kyoto Protocol Green-Annex I countries-having obligation Red-Annex II countries-not having the obligation Yellow-In Transition countries-Joint Implementation
13. Ratification of Kyoto Protocol Green-Countries that have ratified the protocol Red-Refused to ratify
14. 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
17. 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%
18. 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.
19. 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
20. 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
21. 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
22. 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
23. 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
24. 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
25. 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
26. 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
27. 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
28. 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
29. 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
