Carbon Credit

1. Carbon Credit
EVS

2. Contents
• Introduction
• Present scenario
• Types
• Kyoto's flexible mechanism
• Emission market
• How buying carbon credit can reduce emission
• Criticism
• Role of India
• What future holds

3. Introduction
• A carbon credit is a generic term for any
tradable certificate or permit representing the
right to emit one tonne of carbon dioxide or
the mass of another green house gas .

4. • A carbon credit (often called a carbon offset)
is a financial instrument that represents a
tonne of CO2 (carbon dioxide) or CO2e (carbon
dioxide equivalent gases) removed or reduced
from the atmosphere from an emission
reduction project, which can be used, by
governments, industry or private individuals
to offset damaging carbon emissions that they
are generating.

5. 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%
Fig : Carbon emission % in few business countries

6. Annual green house gas emission by
sector
Industrial
processes
22%
Transportation
fuels
18%
Agricultural
byproducts
16%
Fossil fuel
retrival,processing
, & distribution
14%
Residential,comm
ercial,& other
13%
Land use &
biomass burning
13%
Waste disposal
& treatment
4%

7. How are Carbon Credits used?
• Carbon credits are associated with either
removing existing CO2 or CO2e emissions from
the atmosphere in the case of carbon from
forests and planting of trees or the reduction
of future CO2 or CO2e emissions from
renewable energy and energy efficiency
projects that displace fossil fuel power
generation production or industrial processes.

8. Where do Carbon Credits come from?
• Some schemes around the world clearly deliver
more environmental benefits than others.
• Developing parts of the world produce the most
carbon credits by far
• these locations are essentially considered
environmental 'hot spots' as they lack the
appropriate laws, regulations and funding that
usually exist in developed regions.
• Due to these reasons they have the most room for
improvement and therefore offer the most
environmental benefits if worthy improvements are
introduced.

9. Kyoto’s flexible mechanism
Joint
implementation
Clean
development
mechanism
International
emission trading

10. Compliance
• The compliance market comprises several
legally-binding mandatory emission-trading
schemes largely established under the Kyoto
Protocol linked to the United Nations
Framework on Climate Change (UNFCCC), but
also includes some regional compliance
markets in the USA and Australia.

11. The Voluntary Carbon Offset Market
• The Voluntary Carbon Offset Market functions
outside of the compliance market and enables
companies and individuals to purchase carbon
credits on a voluntary basis to satisfy personal
or Corporate Social Responsibility (CSR)
objectives.

12. 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

13. Criticism
• Kyoto mechanism is the only internationally
agreed mechanism for regulating carbon
credit activities
• The Kyoto trading period only applies for five
years between 2008 and 2012.

14. 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 CER.
• India is the world’s sixth largest emitter of carbon dioxide
with its present share in global emissions estimated at 6
per cent

15. examples
• Jindal Vijaynagar Steel
• Powerguda in Andhra Pradesh

16. Benefits for India
• It will gain in terms of advanced technological
improvements and related foreign investments
• It will contribute to the reduction in emission of
Green House Gaseous 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.

17. TRADING OF CERS:
• Two Commodity exchanges trading in Carbon
Credits
• Multi Commodity Exchange (MCX), &
• National Commodity and Derivatives Exchange
(NCDEX)

18. Ethical issues
• Justice of the CC
• Environmental Effectiveness
• Distributive Justice
• Procedural Justice

19. Impact on Business
• Financial service companies benefited from
the emergence of new market to expand.
• Companies focused on System and software
companies to monitor carbon emission for
corporations.

20. Pros & cons of carbon trading
• Cap & Trade
• Baseline & Credit
• General Costs v/s Benefits
• Carbon Trading v/s carbon Taxation