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Carbon trading 19 41_45


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  • 1. Carbon Credit Trading Mechanism and Indian Scenario
    Presented By:
    Debasis Pan (10810019)
    Pankajkumar (10810041)
    Pravin Dwivedi (10810045)
  • 2. Contents
    Kyoto protocol (KP)
    KP Mechanisms
    Price Determinants of Carbon
    Indian Scenario
    CDM Market in India
  • 3. Climate Change
  • 4. Total CO2 Emissions - 1990 and 2005
  • 5. UN Framework Convention on Climate Change
    165 nations signed the 1992 United Nations Framework Convention on Climate Change (UNFCCC) at Rio de Janeiro
    The Convention divides countries into two main groups - Annex I & Non-Annex I Countries
    Annex I (developed countries) agreed to reduce their GHGs by 5.2 % below 1990 levels in 1st commitment period 2008 – 2012
  • 6. UNFCCC continues..
    Convention is based on three principles
    – Common but differentiated responsibility
    – Precautionary approach
    – Sustainable Economic Growth and Development
    The Kyoto protocol defined how to bring down the emissions in COP 3 in 1997
    COP-conference of the parties
  • 7. Kyoto Protocol
    Negotiated in Kyoto, Japan in December 1997,
    Opened for signature on March 16, 1998,
    Came into force on February 16, 2005,
    Binding 'industrialized’ or 'developed’ countries, listed in Annex 1 of the UNFCCC
    Commits developed countries to specific targets for reducing their green house emissions
    Each country has a prescribed number of 'emission units' which make up the target emission units
    The Kyoto Protocol provides mechanisms for countries to meet their emission targets
  • 8. Copenhagen Deal
    Conceived and organized on 6-18 Dec 2009 by Bjorn Lomborg, then director of the Danish government's Environmental Assessment Institute
    Meant to replace Kyoto Protocol in 2013
    Still no legal binding or any future sign of it
    Target temperature rise is 3.6F
  • 9. Carbon Credits
    A carbon credit is a financial instrument that represents a tonne of CO2 or CO2e (carbon dioxide equivalent gases) removed or reduced from the atmosphere from an emission reduction project.
    Carbon credits are measured in units of certified emission reductions (CERs).
    Each CER is equivalent to one ton of carbon dioxide reduction.
    Such a credit can be sold in the international market at a prevailing market rate.
  • 10. KP Mechanism
  • 11. Carbon Credit Trading Mechanism Under CDM
    • The CDM allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits.
    • 12. The purpose of Clean Development Mechanism (CDM) is reduce to emissions and also contribute to sustainable development in developing countries.
  • Clean Development Project Process
    Entities Responsibilities
    Steps in Project Cycle
    Typical Durations
    Project Owner & CDM Consultant
    Project Design
    4-12 Weeks
    Project Planning Phase
    DesignedNational Authority
    Host Country Approval
    6-8 Weeks
    8-12 Weeks
    DOE + CDM Methodology Panel
    CDM Executives
    6-12 Weeks
    Projects Specific
    Project Owner
    Designated Operational Entity
    1-4 weeks
    Verification & Certification
    CDM Board
    CERs Issuance
    6 Weeks
  • 13. India 90,898,274
    China 309,129,616
  • 14.
  • 15.
  • 16. CER – Source of Generation
    Industries like:
    Energy (renewable & non-renewable sources),
    Metal production,
    Mining and mineral production,
    Afforestation & reforestation,
    Transport and
  • 17. Price Determinants of Carbon
    Policy and regulatory Issues;
    Market fundamentals; and
    Technical Analysis.
  • 18. India Scenario
  • 19.
    • India is a Party to the United Nations Framework Convention on Climate Change (UNFCCC)
    • 20. The Seventh Conference of Parties (COP-7) to the UNFCCC decided that Parties participating in CDM should designate a National Authority for the CDM.
    • 21. Accordingly the Central Government constituted the National Clean Development Mechanism (CDM) Authority
    India - high potential of carbon credits
    Wide spectrum of projects with different sizes
    Vast technical human resource
    Dynamic, transparent & speedy processing by Indian DNA (NCDMA) for host country approval
    MoU Signed between MoP and GIZ (Oct 2006)- Indo German Energy program (IGEN)
    Baseline CO2 Emissions from Power Sector already in place- first CDM country
    Improvement in EE
    CDM in Power Sector
  • 22. Indo German Energy Programme, embedded in Bureau of Energy Efficiency, Ministry of Power, Government of India is implementing "A CDM - Capacity building Programme" in partnership with Designated National Authority, Ministry of Environment and Forests, Government of India.
    Funded by German Ministry of Economic Cooperation and Development through IGEN, GIZ, for a period of three years will act as a facility that can help reduce transaction cost in early market development process.
  • 23. Carbon Trading in India
    Multi Commodity Exchange of India Ltd. ( MCX) entered into a strategic alliance with CCX in September 2005 to initiate carbon trading in India.
    The tie-up would provide immense scope and opportunity for domestic suppliers to realize better prices for their carbon credits.
    India being a major supplier of carbon credits, the tie-up between the two exchanges is expected to ensure better price discovery of carbon credits
    Sector-wise break-up
    Total No. of Projects = 1578
  • 25. Total No. of CERs = 633401547.39
    NCDMA , MoEF
    Fastest growing financial market – rose 80% in 2007 to reach nearly $ 60 billion - expected to be $ 1 trillion by 2009–10.
    2007 carbon market shows China’s share at 61% and India at 12%. In terms of total CERs issued of 166 million, India has 43 million or 26%.
    In 2008, China’s share at 23% and India at 30% in terms of no of projects and 36% and 25% in terms of no of CER’s issued respectively. (13.10.08)
    An Indian firm, J.S.W Steel won the largest single CER of 5.4 million in 2 projects.
  • 28. Thank You