Presentation on Carbon Trading
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 Annexe1 Developed countries like Japan, Australia and that of Europe etc. Except USA Mechanism of Carbon Trading Non Annexe 1 Developing Countries like India, China etc
Only Annexe 1 has Pollution Cap i.e. Pollution Allowances If Cap is Exceeded - Pay Tax Carbon - Buy Carbon Credits generated from CDM(Clean Development Market Mechanism) & JI(Joint Implementation) projects - Buy Pollution Allowances
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
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 $). Boost to Environmental projects. NGO¶s Favourite for Rural Development. Eg: Village µPowerguda¶ sold 645$ 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
Not a substitute for Policy Making. R&D on Clean Technologies must go on. Realistic Caps on Annexe 1 countries.
1. Karan Capoor & Philippe Ambrosi, µStates & Trends of the Carbon Markets 2007¶, With support of The World Bank & IETA. 2. µWindfall Profits From Carbon Trading¶, DARE (A Cybermedia Publication), Page 14, Vol 1/Issue 03/ Dec07. 3. µEmissions Trading¶, http://en.wikipedia.org/wiki/Emissions_trading 4. µEmissions Trading¶, http://unfccc.int/kyoto_protocol/background/items/2880.php 5. µIndian Villages in Carbon Trading¶ http://www.goodnewsindia.com/index.php/Supplement/article/indian-villages-inglobal-carbon-trading/P1/