Presentation

on
Carbon Trading

Ashutosh Agrawal
www.frontiers2explore.blogspot.com
 WHY A COMPANY NEEDS TO BE ETHICAL?
ENRON, WORLD COM, TYCO ETC CORPORATE GOVERNANCE

WHY SHOULD A COMPANY INVEST ON SOCIAL GOALS?

BRAND RECOGNITION & PRESTIGE

BUT WHY SHOULD A COMPANY INVEST ON ENVIRONMENT

?
ANSWER: CARBON TRADING
( A Breakthrough Solution)
What is Carbon Trading?
Most Severe Threat : Global Warming
Pollutants: Green House Gases
Major Green House Gas: Carbon Dioxide
Other Gases: Carbon Dioxide Equivalents
Genesis: Kyoto Protocol 1997
Intention: Reward Good Environmental Behaviour
Punish Bad Environmental Behaviour
 How it works?
Marrakesh Accords in 2001 Mechanism of Carbon Trading

Annexe1 Non Annexe 1

Developed countries like Japan, Developing Countries like India,
Australia and that of Europe etc. China etc
Except USA

Only Annexe 1 has Pollution Cap i.e. Pollution Allowances

If Cap is Exceeded
- Pay Tax
- Buy Pollution Allowances
Carbon
- Buy Carbon Credits generated from CDM(Clean Development Market
Mechanism) & JI(Joint Implementation) projects
 Recent Growth Trends
Exchange Markets: EU ETS, UK ETS,CCX, NSW GHG Abatement Scheme

World Bank Reports on Carbon Market:

First three months transaction in 2007 > Complete Transaction of 2006
Frost & Sullivan estimate - 100 Billion Dollars by 2010

Recent Development: Voluntary Markets

No hassles like in CDM Projects.

Even individuals can pitch in.
91 million dollars worth trading in 2006.
Meteoric Growth in Carbon Credit Trading
 Primary CDM Buyers & Sellers

BUYERS SELLERS
Carbon Assets of CDM Projects
 Promise For India
India under Non Annexe 1 – No Cap, Can Sell Carbon Credit.
Makes Average Environmental Project, Above Average financially.
World Bank Funding (10 million $).
Boost to Environmental projects.
NGO’s Favourite for Rural Development.

Eg:
Village ‘Powerguda’ sold 645$ worth carbon credits in 2003.
GFL & SRF sold 87 & 37 million $ respectively in 2006.
(Installed an Incinerator to destroy Industrial Waste (HFC 23) )
Other Projects: Dharmsala Hydro Power. Deepak Spinners etc.

As on 8th Nov 2007, Out of 844 total registered projects, 288 from India.
India stands second with 12% Market Share.
What Carbon Trading Achieves
A Paradigm Shift
Departure from Traditional means of Tax & Regulation
Synergy B/W Environmental Goals & Economic Goals
Its Effective
Promotes Clean Technologies in World

Caveat Emptor
Not a substitute for Policy Making.
R&D on Clean Technologies must go on.
Realistic Caps on Annexe 1 countries.
Bibliography:

1. Karan Capoor & Philippe Ambrosi, ‘States & Trends of the Carbon Markets 2007’,
With support of The World Bank & IETA.
2. ‘Windfall Profits From Carbon Trading’, DARE (A Cybermedia Publication), Page
14, Vol 1/Issue 03/ Dec07.
3. ‘Emissions Trading’, http://en.wikipedia.org/wiki/Emissions_trading
4. ‘Emissions Trading’, http://unfccc.int/kyoto_protocol/background/items/2880.php
5. ‘Indian Villages in Carbon Trading’
http://www.goodnewsindia.com/index.php/Supplement/article/indian-villages-in-
global-carbon-trading/P1/
 Ashutosh Agrawal
www.frontiers2explore.blogspot.com