INDIA, CDM AND KYOTO PROTOCOL Presented by: Ratnesh Jaiswal(50803030) Sachin Bhardwaj(50803031) MBA (Energy) L.M Thapar School of Management Thapar University 14 April 2009 1 Kyoto Protocol
Reduction of 6 major GHGs, as defined by IPCC Carbon dioxide (CO2) Methane (CH4) Nitrous oxide (N2O) Hydro fluorocarbon (HFCs) Perfluoro carbon (PFCs) Sulphur hexafluoride (SF6 ) By 1997, 186 nations signed Kyoto Protocol (KP) What is Kyoto Protocol 14 April 2009 2 Kyoto Protocol
Annex I : Leading industrialized countries (41 nations) Annex II : Wealthy countries in Annex I (24 nations) Non-Annex I : Developing countries (145 nations) Three categories 14 April 2009 3 Kyoto Protocol
Cut GHG emissions by 5.2% below 1990 level (during
Help non-Annex I countries to tackle climate change
Additional financial & tech. supports to Non-Annex I
countries Non-Annex I:
Commitment 14 April 2009 4 Kyoto Protocol
Industrialized countries Financial aids Tech. Transfer Developing countries Total 186 nations Cont…… Annex I 41 Countries Annex II 24 Countries Non-Annex I 145 Countries 14 April 2009 5 Kyoto Protocol
The United Nations Framework Convention on Climate Change agreed to a set of a "common but differentiated responsibilities." The parties agreed that:
The largest share of historical and current global emissions of greenhouse gases has originated in developed countries;
Per capita emissions in developing countries are still relatively low, and
The share of global emissions originating in developing countries will grow to meet their social and development needs
Common but differentiated responsibility 14 April 2009 6 Kyoto Protocol
China, India, and other developing countries were not included in any numerical limitation of the Kyoto Protocol because they were not the main contributors to the greenhouse gas emissions during the pre-treaty industrialization period. 14 April 2009 Kyoto Protocol 7 Cont..
The Clean Development Mechanism (CDM), defined in Article 12 of the Protocol, allows a country with an emission-reduction or emission-limitation commitment under the Kyoto Protocol (Annex B Party) to implement an emission-reduction project in developing countries. Such projects can earn saleable certified emission reduction (CER) credits, each equivalent to one tonne of CO2, which can be counted towards meeting Kyoto targets.
It is the first global, environmental investment and credit scheme of its kind, providing a standardized emissions offset instrument, CERs.
Clean Development Mechanism 14 April 2009 11 Kyoto Protocol
Out of the total CDM projects for registration under Kyoto Protocol across globe, 32.86% projects are from India, followed by Brazil with 17.12%, China 7.59% and Republic of Korea 1.95%, while other countries collectively account for 19%. Currently, the rate of one carbon credit is 13 euro The carbon credit market was $25 billion last year and It is growing at tremendous space There is a demand to reduce 1 billion tonne of carbon emissions in the world, so that threats like global warming could be mitigated 14 April 2009 Kyoto Protocol 12 Over 200 Indian company apply for CDM in race for carbon credit
If India meets one fifth of carbon emission reduction demand, it works out to be 200 million tonne of carbon emission reduction. With this the Indian entities can earn 2 billion euro by the year 2012. Gujarat has also remained a leader in registering CDM projects as Gujarat Flour chemicals Ltd (GFL) was among the early birds to register CDM project. 14 April 2009 Kyoto Protocol 13 Cont……..
JI enables countries with specific emission reduction targets under the protocol (that is, the industrialized or ‘Annex B’ countries which were also referred to above as Annex 1 countries !) to obtain credit for implementing GHG reduction projects in other Annex 1 countries.
A JI project might involve, for example, replacing a coal-fired power plant with a more efficient combined heat and power plant
Joint Implementation 14 April 2009 14 Kyoto Protocol
Emission reductions are awarded credits called ERUs. One ERU represents an emission reduction equalling one tonne of CO2 equivalent The ERUs come from the host country's pool of assigned emissions credits, known as Assigned Amount Units(AAUs) Each Annex I party has a predetermined amount of AAUs, calculated on the basis of its 1990 greenhouse gas emission levels Emission Reduction Units 14 April 2009 15 Kyoto Protocol
India has the world’s second largest population and the world’s sixth largest emitter of CO2 It is estimated that India emitted 908 million tones of CO2 in 1998, 4% of the world’s total(UNEP 2002) The rate of growth of GHG emission in India is 4.6% annually, compared to a 2% world average. 14 April 2009 Kyoto Protocol 16 GHG Emissions in India
CO2 emissions account for 53% of the total emissions
CH4 and N2O contribute 39% and 8% respectively.
Energy sector is the main emitter of CO2 accounting for 87% of total CO2 emissions the remaining coming from the Cement Industry(4%), and land conversation (9%), and biomass burning and agriculture sector are the main source of CH4 and N2O with small portion contributed by the transport sector.
14 April 2009 Kyoto Protocol 17 Cont ….
The main benefits that can be expected from the project-based Kyoto mechanisms are, on the one hand, that they potentially reduce industrialized countries’ costs of meeting the Kyoto Protocol targets, whereas, on the other hand, they are to support the host countries objectives regarding sustainable development.
With the help of CDM, countries which have set themselves an emission reduction target under the Kyoto Protocol (Annex I countries) can contribute to the financing of projects in developing countries (non-Annex I countries) which do not have a reduction target. Contributing to the sustainable development of the host country, the project should reduce the emission of greenhouse gases. The achieved emission reductions can be used by the Annex I country in order to meet its reduction target. 14 April 2009 Kyoto Protocol 19 Cont.
THERE IS UNCERTAINTY ABOUT IHE SIZE OF CDM MARKET AND PRICE OF CERs BUT IN NEAR FUTURE INDIA WILL BE A MAJOR PLAYER. 14 April 2009 Kyoto Protocol 20 Conclusion