In the next few minutes…Climate change – challenge and global actionMonetizing carbon – market, buyers, price driversCorporate Sector – opportunity, preparedness, implications
Climate ChangeRising temperature: 0.6 oC since the late 1800s, 1.4 – 5.8 oC by 2100Source: Greenhouse gasses from fossil fuel combustion and forest clearingImpacts: extreme weather events (storms, floods and droughts), sea level rise, lower agricultural yields, etc.
Global WarmingChanges to the natural greenhouse effect are a result of man-made emissions of Greenhouse Gases (GHG): Carbon dioxide Methane Nitrous oxide Hydro fluorocarbons Per fluorocarbons Sulphur hexafluoride
Green House gases & Global Warming PotentialGreen House Gas GWPCarbon dioxide 1Methane 21Nitrous oxide 310Per fluorocarbons upto 9500Hydro fluorocarbons upto 11,700Sulphur hexafluororide 23,900Human activities are increasing the concentration of Green House Gases in the atmosphere.This enhances the green house effect, commonly known as “ Climate Change ”
Kyoto Protocol Kyoto Protocol is an international agreement agreed at the Third Conference of Parties (COP3) to the UNFCCC held in December 1997 in Kyoto, Japan to reduce worldwide emissions of greenhouse gases. Aims of reducing the overall GHG emission by at least 5.2% below 1990 level in 2008-2012 commitment period. Establishes three mechanism to supplement national actions to achieve real, long term, measurable and cost effective GHG reduction. Clean Development Mechanism( CDM ) Joint Implementation (JI) International Emission Trading (ET)
Kyoto Protocol : A History Rio Conference: 154 states signed 1992 the UN Framework Convention on Climate Change (UNFCCC) UNFCCC entered into force on 21 March 1994 1994 IPCC’s 2nd report concluded that “the balance of evidence suggests 1995 that there’s a discernible humanThe Kyoto Protocol was adopted in influence on global climate.”1997 giving industrialised countriesa legally binding commitment to 1997reduce their GHG emissions. 2000 First credits from GHG emission reduction projects Finalisation of the operational details of the Kyoto Protocol at 2001 COP 7 in Marrakech Nov. 2001
Emission Reduction Actual emission reduction will be much larger than 5%: 6 Numbers for industrialised countries Source: 4 -24% -5% ABB Corporate ResearchGtC 2 1990 2000 2010 2020
Clean Development Mechanism CDM projects allow entities in Annex I countries that have ratified the Kyoto Protocol to invest in projects that reduce GHGs in non-Annex I countries while contributing to sustainable development. By investing in non-Annex I countries, investors from Annex I countries can earn CERs that can be used to meet GHG reduction under the Kyoto Protocol.GOALSTo help mitigate climate changeTo help non-Annex I countries achieve sustainable developmentTo help Annex I countries attain their emission reduction commitments
Road Map for Managing Carbon Assets 5. Credit-based emissions reduction projects: • Identify opportunities (e.g. fuel switch, renewables) • Kyoto projects - CDM (bilateral and multilateral schemes) • Trade, bank or retire credits 2. Commit to an emissions target:1. Determine emissions inventory:• Set scope - e.g. direct/indirect 4. Emissions trading (corporate/• Define measurement and reporting domestic/ international): protocol• Establish robust internal data controls• Independent verification 3. Identify and implement internal reduction measures: • Energy efficiency improvements • GHG abatement (low carbon alternatives or renewables) • Loss control (e.g. methane losses)
Where is CDM applicable ?????.. Fuel Switching --Fossil Fuel to Greener fuel --Petroleum to Bio DieselEnergy efficiency measures related to In Waste management- Boilers - ‘Waste to Energy’ projects- Pumps - Utilization of waste & waste water- Turbine emission for generation of energy- Efficient cooling system for captive power generationIn Power Sector In Transport- New efficient generation techinique - Fuel switching from gasoline &- Reduction in technical T&D losses diesel to natural gas- Carbon dioxide Sequestration - Replacement of transportation of- Switching from coal to other fuels Renewable Energy certain raw material from road to like natural gases. --Wind Power through pipilines --Solar --Biomass Power --Hydel Power
Carbon Trading potentialCarbon has become a tradable commodity! The carbon market is growing rapidly and so are opportunities. Credits from the clean development mechanism (CDM) and joint implementation (JI) accounted for 226m tonnes worth €2bn in the first half of 2007. The overall emission gap of Japan, Canada and the old EU member countries for the period 2008-2012 will be more than 3 Billion tonnes of CO2 equivalent Russia and the countries of Eastern Europe have a surplus of several billion tonnes If Russia acts sensibly, CDM market could be about 2 billion Euros or Rs 10,000 Crores Already more than 600 million Euros have been committed by government buyers.
CDM in INDIA : Major Milestones India signed Kyoto Protocol in December 1997 & ratified in August, 2002 October 2002, COP 8 hosted by India Established National CDM Authority in December 2003 National Strategy Study carried in 2005 March 05, first project from India registered October 05, first project received CERs 15% 2% 31% India 2% 2% China 3% Brazil Mexico 8% Malaysia Philippines South Korea 11% Chile Other 26% Percent of CDM projects by country
CDM : Indias Potential • Steady development in last 50 years of independence from 3.5% GDP growth to 5.5, 6 and now 9-9.5% • Economic growth is accompanied by an increasing per capita income and changes in life styles. With an effect on the energy demand as well. • The key issues which have energy implications are – rising population using commercial energy, – need for economic growth, – access to adequate commercial energy supplies – rational energy pricing regime, – improvements in energy efficiency – matching R&D base and environmental protection.
Benefits under CDM to India• India – world‘s sixth largest CO2 emitter, although per capita emission is small (0,2 tons) compared to USA (5,2 tons)• CDM could help to overcome the financial constraints associated with the adoption of cleaner technologies• Analysis shows that renewable energy technologies are among the low cost options for carbon mitigation• Total GHG emission in India is estimated at 1235 million tonnes in 1995. CO2 Contributes 63% and Methane 36% of GHG
Potential CDM Sectors in India Power sector : Alternate energy source and efficiency improvement of existing plants Renewable Energy : Biomass, wind, solar and hydro power Oil & Gas : Fuel switching & high conversion efficiency Industry : Energy efficiency Transport : Fuel switching 40% 34% 29% age 26% 30% Percenta 20% 7% 10% 2% 1% 0% Industry Efficiency ndfill gas enewable enewable Switch Biomass Energy Fuel Lan B Re Re E Se ctors