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m By: Manish Pal

m Jayant Chabra
m Amit Rana
mCarbon credits encompass two ideas:
m (1) Prevention/reduction of carbon emissions
produced by human activities from reaching the
atmosphere by capturing and diverting them to
secure storage.
m (2) Removal of carbon from the atmosphere by
various means and securely storing it.
m m 
are a key component of
national and international attempts to mitigate
the growth in concentrations of greenhouse
gases (GHGs).
m ²ne Carbon Credit is equal to one ton of
m Greenhouse gas emissions are capped and then
markets are used to allocate the emissions
among the group of regulated sources.
m Since GHG mitigation projects generate credits,
this approach can be used to finance carbon
reduction schemes between trading partners
and around the world.
m Burning of fossil fuels is a major source of
industrial greenhouse gas emissions, especially
for power, cement, steel, textile, fertilizer and
many other industries which rely on fossil fuels
(coal, electricity derived from coal, natural gas
and oil).
m The major greenhouse gases emitted by these
industries are carbon dioxide,
dioxide, methane
methane,, nitrous
oxide,, hydro fluorocarbons (HFCs), etc, all of
which increase the atmosphere's ability to trap
infrared energy and thus affect the climate

The Kyoto Protocol is an
international treaty Ƌ in
force since 2005 - to
reduce greenhouse gas
(GHG) emissions blamed
for global warming. The
Protocol provides the
means to monetize the
environmental benefits of
reducing GHGs.

m Carbon ²ffsets make it possible for individuals

and businesses to reduce the carbon dioxide
(C²2) emissions they are responsible for, such
as product manufacturing and transportation, by
reducing or displacing the C²2 in another place,
such as reducing the use of fossil fuels used for
power. Carbon ²ffsets can include renewable
energy like wind and solar power, energy
efficiency, and reforestation projects.


This is the term used for the carbon credits system

that helps finance GHG reduction projects.

The World Bank (CFU) uses money contributed

by governments and companies in ² CD
countries to purchase project-
project-based greenhouse
gas emission reductions in developing countries
and countries with economies in transition.
m ndia could earn up to $100
billion through trading of
certified emission reductions
(C Rs) or carbon credits.
(source T)
m Companies in the developed
economies buy carbon credits
to offset their excess
m Carbon credits are issued to
companies in the developing
countries by an international
authority for reducing
a a

m The main role of the Bank in the field of

carbon finance is to act as financier of
emission reduction projects.
m Supporting and complementing the private
sector rather than competing with it ( the
Bank can play a number of additional



m BRD's carbon finance activities create new business
opportunities for the private sector in this emerging
m Selling carbon credits increases the feasibility of
emission reduction projects, which helps to attract new
private investors
m By being the buyer of carbon credits in a transaction, the
BRD can provide comfort to private sector buyers that
would not otherwise consider these projects
m ²utsourcing, to private firms expert in this area, the
work of developing emission reduction projects covered
by the Protocol. For example, this has been done for the
three Carbon Managers working under the Multilateral
Carbon Credit Fund.

mDMRC has become the first rail project in the

world to earn carbon credits because of using
regenerative braking system in its rolling stock.
mCarbon credits are generated by using cleaner
technology that reduce energy consumption which
reduces greenhouse gas emissions and DMRC has
earned the carbon credits by using regenerative
braking system in its trains that reduces 30 per
cent electricity consumption.