CARBON EMISSIONS & CARBON

CREDIT TRADING

PRESENTED TO: PREPARED BY:

Prof. Rajsee Joshi Tanmay Kotak
(NR10044)
 CARBON EMISSIONS AND CARBON
FOOTPRINT
• polluting carbon substances released into atmosphere
• Responsible for about 80% of the problems related to
Greenhouse Gas Emissions. 
• Carbon Dioxide Emissions and carbon dioxide are one
of the six chemicals that also include; 
– methane and Biomethane
– nitrous oxide
– hydrofluorocarbons 
– perfluorocarbons 
– sulfur hexafluoride
The USA has the highest per capita
emissions of carbon but China and India
and other Asian countries have huge
populations – putting increased pressure
on carbon emissions
 CARBON TRADING
• An administrative approach used to control
pollution by providing incentives for achieving
reductions in emissions of pollutants.
• Also known as emission trading.
• Overall goal of an emissions trading plan is to
minimize the cost of meeting a set emissions
target.
 KYOTO PROTOCOL
• The protocol was initially adopted on 11 December 1997 in
Kyoto, Japan and entered into force on 16 February.

• A protocol to the United nations framework convention on

climate change (UNFCCC) aimed at fighting global warming.

• As on November 2009,187 countries have signed and ratified

the protocol.
 KYOTO PROTOCOL (CONTD.)
•Under the protocol all the countries ( called ‘Annex I
countries”) commit themselves to reduction of greenhouse
gases.

•US is the only nation which has not ratified it as they believe
that 5% reduction will “wreck the American economy”.

•The target agreed upon was an average reduction of 5.2% from

1990 levels by the year 2012.

•Kyoto Protocol provides ‘Cap and Trade’ system.

 CAP AND TRADE
Cap-a set limit on the amount of a pollutant that can be
emitted.
Trade-The transfer of allowances is referred to as trade.
• Companies that need to increase emission
allowance must buy credits from those who
pollute less.
• In effect, buyer is paying a charge for polluting,
while seller is being rewarded for having reduced
emissions by more that was needed.
 CAP AND TRADE (CONTD.)
• Carbon credits are measured in tonnes of carbon dioxide.
1 credit = 1tonne of CO2

• In developing countries like India, the emission levels are much below the
target fixed by the Kyoto Protocol. So, they are excluded from reduction of
GHG emission. On the contrary, they are entitled to sell surplus credits to
developed countries. The European countries and Japan are the major
buyers of carbon credits.

• This is what makes trading in carbon credits such a great business

opportunity.

• Foreign companies which cannot fulfill the protocol norms can buy surplus
credit from companies in other countries.
Company A can reduce Company B can reduce
1000 tons CO2E at 1000 tons CO2E at
$2/ton = $2000 $6/ton = $6000

SELL BUY
1000 tons CO2E at $4/ton
= $4000

$2000 Profit $2000 Savings

Company A - Seller Company B - Buyer
 COPENHAGEN SUMMIT 2009

• Held at the Bella Center in Copenhagen at

Denmark between 7th Dec-16th Dec 2009
OVERALL IMPACT OF CARBON TRADING
• By reducing carbon emissions, greenhouse
gases in the atmosphere will be reduced
slowing heat entrapment.

• Companies that emit excess carbon dioxide

will be penalized and forced into taking more
care.
 GUIDEILNE TO REDUCE OUR CARBON
FOOTPRINT
• Compact fluorescent bulb
• Product with excessive packaging
• Recycle more
• Turn off electronic devices
• Drive less
• Check your tire
• Plant a tree
THANK YOU