CARBON CREDIT

Definition
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 greenhouse gas with a carbon dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide.

Introduction
Carbon credits are a key component of national and international emissions trading schemes that have been implemented to mitigate global warming. They provide a way to reduce greenhouse effect emissions on an industrial scale by capping total annual emissions and letting the market assign a monetary value to any shortfall through trading.

Birth of Carbon Credit

Kyoto Protocol: Birth of Carbon Credits

Reduction of greenhouse gases was primarily discussed at the 1997 Climate Change Convention in Kyoto A voluntary treaty was signed by 141 countries, including the European Union, Japan and Canada USA is yet to sign the treaty Carbon credits are certificates issued to countries that reduce their emission of GHG

Status of agreement

How Does Carbon Credit Save the Planet?

3. How Does Carbon Credit Save the Planet?

Advantages of Carbon Credit

Better technologies for the company which is benefiting from generation of CERs. Technology transfer from developed to developing countries (Due to low cost structure in developing countries). Additional source of foreign investment in developing countries which act as a catalyst in developing cleaner technologies.

Contd
Channel CDM funds to investment priorities The CDM funds can be channelized into building or improving projects, thus reinvesting it for higher growth. Development of cleaner technologies leading to sustainable development where countries have a strategic advantage from now in terms of pollution. Environmental benefits due to lesser GHG emissions.

Disadvantages of Carbon Credit

Provision of cheapest way of purchasing climate destroying right. Due to nature and process of complexity involved, foreign players may dominate domestic industries for the incentive of CERs. CDM investment could affect national development strategies, possibly adversely affecting national decision-making processes. Until future commitment periods are agreed, the CDM may not provide incentives for financing long-term development projects and strategies.

CONTD..
CDM timeframe may not assist long-term development strategies as the timeframe is foreseeable till 2012 only. (Most projects - developed with short term perspective). Still the mechanism leads to developed countries emitting more GHG in spite of their KYOTO caps. Historically they are the culprits for GHG emissions. The developed countries purchase CERs rather than finding new ways of reducing emissions by technological development.

CONTD..
Pressure to accept technologies which have adverse local impacts - CDM may attract unfavourable or unwanted technologies which adversely impact local people. The technologies should allow for sustainable development in social as well as economic and environmental terms. No opportunity for less developed countries under this framework.

Carbon Credit in India

The certified emission reduction (CERs) issued is set to triple in India over the next three years Indian projects are estimated to receive 246 million CERs by December 2012 Of India's 1,846 RE projects as of November 2009, only 15 per cent were registered with the UN India is currently 2nd in terms of global CERs

What nextwhat can we do?

Produce more fuel-efficient vehicles Reduce vehicle use Improve energy-efficiency in buildings Develop carbon capture and storage processes Increase solar power Decrease deforestation/plant forests Improve soil carbon management strategies

Individual actions
Use mass transit, bike, walk, roller skate Unplug appliances or plug into a power strip and switch it off

Caulk, weather strip, insulate, and replace old windows

Buy water-saving appliances and toilets; installing low-flow shower heads.

Buy products with a U.S. EPA Energy Star label

 Carbon Sequestration : The process of removing CO2 from the atmosphere and depositing it in a reservoir.