Carbon Credits

By
Adithya Nagesh (16B101)
Anil Shankar (16B106)

Overview
Climate Change
Measures
Timeline
Kyoto Protocol
Comparison of UNFCCC Emission Reduction Mechanisms
Carbon Credits
International Emissions Trading
Pros and Cons
Cases and Scandals

Climate Change

Measures
Agriculture - small investments in farming and storage technologies
Forests - create financial value for forest carbon storage
Energy - new investments in renewable energies
Manufacturing - regulatory reforms and new policies
Transport - three-pronged strategy: AvoidShiftClean
Tourism
Buildings - Investing in energy efficiency and waste management
Cities - working to promote sustainable building policies and
practices
Waste Reduce-Reuse-Recycle

Timeline
March 1994 - UNFCCC
December 1997 - Kyoto Protocol
December 2012 Doha Amendment

Kyoto Protocol
Commitsits Parties by setting internationally binding
emission reduction targets
Recognizes Developed Nations and their high emissions
Marrakesh accords (COP7) 2008-2012
Doha Amendment (Dec 2012) 2013-2020
International Emissions Trading
Clean Development Mechanism
Joint Implementation

Comparison of UNFCCC Emission

Reduction Mechanisms
CDM
Allows Developed nations to
implement an emission reduction
projects in Developing nations
Investing parties can earn
Certified Emission Reduction
(CER) credits (or Carbon Credits)
Aids industrialized countries in
meeting their emission reduction
targets

JI

Allows Developed nations to implement emission reduction

projects in other Developed nations

Investing parties earn compliance credits called Emission

Reduction Units (ERUs)

A flexible and cost-efficient means of fulfilling their Kyoto

commitments while the host Party benefits from foreign
investment and technology transfer

Carbon Credits
A right to emit 1 ton of CO2
CER as per CDM
ERU as per JI
New South Wales Greenhouse Gas Abatement Certificate
(NGAC)
Voluntary Carbon Credits:
Voluntary Carbon Unit (VCU) or Voluntary Carbon
Standard (VCS)
Verified (or Voluntary) Emissions Reduction (VER)
Renewable Energy Certificate (REC)

International Emissions Trading

Carbon Credits is tracked and traded like any other commodity in
the Carbon Market
Cap and Trade system
A limit (cap) is set on C02 emissions and permits are given to emitters
If a company exceeds its allowance, it has to purchase additional permits
to cover the excess
If a company does not exceed its limit, then it can sell their unused
allowances

Each Participating country has the following bodies to regulate and

administer project participation and investment
Designated Operational Entity (DOE)
Designated National Authority (DNA)

Pros

Cons

Helps in reducing global warming

New and innovative investment idea

Investment in alternative fuels

Change in Countrys financial situation

Gives a false sense of pollution

Emission Calculation varies between organizations

Additionality in terms of emission reduction

Not truly regulated

They can easily be stolen or transferred if IT security is

compromised as the Credits themselves are not tracked or
secured by issuers

Cases and Scandals

2010, 1.6 million credits stolen from Holcim, a cement
company
Boiler room scam: carbon credits were sold to
individuals as personal investments, they are worthless
since there are no markets to sell them
Carousel fraud which was widespread in 2010

Questions?

References
http://climate.nasa.gov/
http://www.unep.org/
http://unfccc.int/
http://www.carbonplanet.com/