Carbon credit


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Carbon credit

  1. 1. Presented by Sandeep Nagarkoti Mahendra Meena Satpal Singh Himanshu Hitesh Das CARBON CREDIT
  2. 2. Contents • What is Carbon Credit ? • Present scenario • How are carbon credits acquired ? • How are carbon credits created ? • How buying carbon credit can reduce emission ? • How do carbon credits impact global emissions? • Role of India • Different types of carbon projects • Benefits for India • Solutions ?? • Conclusion
  3. 3. What is Carbon Credit ? Basically it’s a permit that allows the holder to emit one ton of carbon dioxide. Credits are awarded to countries or groups that have reduced their green house gases below their emission quota. Carbon credits can be traded in the international market at their current market price.
  4. 4. Present scenario Australia 28% united states 22% Former Soviet Union 14% Japan 10% European Union 11% China 7% Indonesia 3% India 2% Rest of the world 3% Carbon emission % in few business countries
  5. 5. How are carbon credits acquired ? Three mechanisms have been made through which countries can acquire carbon credits: Kyoto’s flexible mechanism Joint implementation Clean development mechanism International emission trading
  6. 6. •Under Joint Implementation(JI) a developed country with relatively high costs of domestic greenhouse reduction would set up a project in another developed country. •Under the Clean Development Mechanism(CDM) a developed country can 'sponsor' a greenhouse gas reduction project in a developing country where the cost of greenhouse gas reduction project activities is usually much lower, but the atmospheric effect is globally equivalent. •Under International Emissions Trading (IET) countries can trade in the international carbon credit market.
  7. 7. How are carbon credits created? Types of carbon credit market Compliance Market credits Voluntary Market credits
  8. 8. In this market Carbon Credits are generated by projects that operate under one of the United Nations Framework Convention on Climate Change (UNFCCC) approved mechanisms such as the Clean Development Mechanism (CDM).Credit generated under this mechanism are known as Certified Emissions Reduction(CERs) In this market Carbon Credits are generated by projects that are accredited to independent international standards such as the Verified Carbon Standard (VCS). These credits are known as Verified Emission Reductions (VERs). Compliance Market Voluntary Market Carbon Trade Exchange supports the trading of both voluntary and compliance credits. Ex : CO2E Exchange in UK, CDM Exchange in Europe and the Chicago Climate Exchange (CCX).
  9. 9. Where are carbon credits held? Carbon credits are stored electronically in ‘registries’. Registries are essential for issuing, holding, and transferring carbon credits. Once a carbon project is issued with credits, the registry gives each one a unique serial number so that they can be tracked through their entire life-cycle. Registries also facilitate the retirement (surrendering) of credits for carbon neutrality purposes, ensuring credits are not resold at a later date. The largest registry is the MarkIt Environmental Registry which is directly connected to Carbon Trade Exchange (CTX) and CTX is connected to various national registries in the EU via Climat’s Registry Electronic Interface (REI).
  10. 10. How Buying Carbon Credits Can Reduce Emission ? Factory Emissions 100000 tones per year. Permissible limit 80000 tones Factory either reduces emissions or purchase carbon credits Invests in new machinery to reduce emission
  11. 11. How do carbon credits impact global emissions? Carbon credits are an immediate answer to reducing the amount of Green House Gas (GHGs) emissions in the atmosphere. The generation and sale of carbon credits funds carbon projects which would not have gone ahead i.e. additional to business as usual. Carbon credits also help lower the costs of renewable and low carbon technologies as well as assisting in the technology transfer to developing countries.
  12. 12. Role of India • India is expected to rake in $100 million annually by trading in carbon credits and Indian companies are expected to corner at least 10 per cent of the global market in the initial years. • According to industry estimates, Indian companies are expected to generate at least $8.5 billion at the going rate of $10 per tonne of Certified Emission Reduction (CER). • India is the world’s sixth largest emitter of carbon dioxide with its present share in global emissions estimated at 6 per cent
  13. 13. Different types of carbon projects • Renewable energy: a switch from fossil fuels to a ‘clean’ energy e.g. wind and solar energy • Forestation and Afforestation: The planting of new trees as trees sequester and store CO2 e.g. forest regeneration • Energy efficiency: reducing emissions though an increase in energy efficiency e.g. installation of energy-efficient machinery • Methane capture: avoiding methane emissions through capture and burning to create energy e.g. landfill methane capture Project eligibility for carbon credits depends on whether a project follows one of the Kyoto Protocol’s project-based mechanisms or an independent voluntary standard.
  14. 14. Benefits for India •It will gain in terms of advanced technological improvements and related foreign investments. • It will contribute to the underlying theme of green house gas reduction by adopting alternative sources of energy. •Indian companies can make profits by selling the CERs to the developed countries to meet their emission targets.
  15. 15. Solutions ?? Emission trading allows countries or groups to sell credits to countries that are over their target. Typically in countries organisations assist them in reduction of emissions, by planting trees and plants, some organisations include this as an activity under their corporate social responsibility. By reducing Carbon emissions, activities which remove CO2 from the atmosphere can be encouraged. This is where forests come in.
  16. 16. Conclusion Acquiring and selling carbon credits has resulted in a new form of trading, carbon credit trading. The credit system is going to gain popularity as the emission levels are increasing constantly, buying and selling of credits is going to increase over as organisations and countries are joining the system. Reduction of Carbon Dioxide and Green House Gases are necessary.
  17. 17. Thankyou