Transcript
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BUILDING SCIENCE & SERVICES
CARBON TRADINGIN INDIA
SUBMITTED BY:-
ASIM BIKASH MANDAL NAVEEN JOSE A.S.N SASHANK SUMAN SAURAV
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CARBON TRADING ARRIVES IN INDIA
Well, what is Carbon Trading? Lets rewind to the Kyoto
Protocol of 1997 by which all countries are required toreduce their greenhouse gas emissions by 5% --from
1990 levels-- in the next ten years, ie 2012or pay a
price to those that do.
The idea was to make developed countries pay for theirwild ways with emissions while at the same time
monetarily rewarding countries with good behaviour in
this regard.
Since developing countries can start with cleantechnologies, they will be rewarded by those stuck with
dirty ones.
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Say a company in India can
prove it has prevented theemission of x-tonnes of carbon,
it can sell this good carbon-
karma to a company in say, the
US which has a bad karma.
The scheme has been entitled
Clean Development Mechanism
[CDM] in 2000. Or more
commonly, Carbon Trading.
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Commitments of Parties
Annex 1 Country Parties
Developed countries and countries whose
economies are in transition
Adopt policies and measures to limit their
anthropogenic emissions of GHGs and
protect/enhance their GHG sinks and reservoirs
to demonstrate that they are taking the lead in
modifying longer-term trends.
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Submit their national communications on
regular basis with the following information:
? Projected anthropogenic GHG emissions by
sources and sinks with the aim of returning them
to 1990 levels, individually or jointly
? Policies and measures to limit GHG emissions and
protect/enhance sinks and reservoirs
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Annex II Country Parties
Under Article 4.2 of the UNFCCC, developed countryparties included in Annex II (Annex 1 countries minusthe economies in transition) have the followingadditional commitments:
Provide new and additional financial resources tomeet the agreed full costs incurred by developing
country Parties in complying with their obligationsunder Article 12.
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Provide financial resources, including transfer of
technology to meet the agreed full incremental costsof measures to be undertaken by developing country
Parties under Article 4.
Promote, as appropriate, the transfer of, or, facilitate
and finance access to, environmentally sound
technologies and know-how to other Parties,particularly the developing ones to enable them to
implement the provisions of the Convention.
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Non-Annex 1 Country Parties
? Non-annex 1 country Parties or developing
countries
? Have no commitments to reduce their GHG
emissions, but only to develop, periodically
update, publish and make available to the
Conference of Parties, their national inventories ofGHG emissions by sources and removals by sinks.
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THE KYOTO PROTOCOL
The Kyoto Protocol is an international agreement
of 159 countries, which attended the 3rd Session of
the Conference of the Parties to the UNFCCC held
in December 1997 in Kyoto, Japan.
This formalized the adoption of the results of the
Berlin Mandate (CoP 1) to reduce worldwide
emissions in GHGs.
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Objective of the Kyoto Protocol
The protocol was developedto meet the ultimate objective of
the UNFCCC which is to stabilize
GHG concentrations in the
atmosphere at a level that wouldprevent anthropogenic
interference with the climate
system, through quantified
emission targets within aspecified time frame.
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Significant Provisions of the Kyoto
Protocol Annex 1 Country Parties, individually or jointly,
ensure that their aggregate anthropogenic CO2equivalent emissions of GHG do not exceed their
assigned amounts.
Reduction of their overall emissions by at least
5% below 1990 levels in the commitment period2008 to 2012.
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The Protocol commits Annex B countries that
ratify the Protocol to reduce GHG emissions below1990 levels by the first commitment period (2008-
2012)
The Protocol will be legally binding when it entersinto force. It must be signed and ratified by at least
55 countries, whose total emissions represent 55%
of the emissions of the Annex I countries in 1990.
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Incorporation by Annex 1 Parties in its annual
inventory of anthropogenic emissions the sourcesand removals by sinks of GHG gases.
Expert review process, providing a thorough andcomprehensive technical assessment of the
implementation of this protocol.
No introduction of new commitments for Partiesnot included in Annex 1.
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The Kyoto Protocol reinforces theprinciple of commoncommon butbut
differentiateddifferentiated responsibilitiesresponsibilities..
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THE KYOTO PROTOCOL FLEXIBILITY
MECHANISMS
EMISSIONS TRADING
JOINT IMPLEMENTATION
CLEAN DEVELOPMENT MECHANISM
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Emissions Trading (ET)Article 17
- Permits countries to transfer partsof their allowed emissions (assigned
amount units)
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Joint Implementation (JI)
Article 6
- Allows countries to claim credit for
emission reductions that arise frominvestment in other industrialized
countries, which result in a transfer of
equivalent emission reduction unitsbetween the countries.
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Clean Development Mechanism
(CDM)Article 12 KP
Allows emission reduction projects that assist in
creating sustainable development in developing
countries to generate certified emission
reductions (CERs) for use by the investor.
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Greenhouse Gases
covered by the Kyoto Protocol
Carbon dioxide (CO2)
Methane (CH4)Nitrous Oxide (N2O)
Hydrofluorocarbons (HFCs)
Perflourocarbons (PFCs)Sulphur hexafluoride (SF6)
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ANNEX B
ANNEX 1 PartyANNEX 1 Party Quantified EmissionQuantified EmissionLimitation or ReductionLimitation or ReductionCommitment (Commitment (fr.fr. BaseBaseyear or periodyear or period))
Australia 108EuropeanCommunity 92Japan 94Netherlands 92Russian Federation 92USA 93
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THE CLEAN DEVELOPMENTTHE CLEAN DEVELOPMENT
MECHANISMMECHANISM
(CDM)(CDM)
Art. 12 KP
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Objectives of the CDM
Assists non-Annex 1 countries in achieving their
sustainable development objectives
Enables Annex 1 parties in achieving compliance
with their quantified emissions limitation and
reduction commitments (QELRC)
Investors benefit by obtaining GHG emission
reduction credits
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Objectives of the CDM
Host countries benefit in the form of investment,access to better technology, and local sustainable
development
Contribute to the ultimate objective of the
Framework Convention on Climate Change
Developing countries will benefit from the projectactivities resulting in certified emission reductions
(CERS) and developed countries will benefit by using
the CERs to meet their commitments.
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Principal Requirements for CDMProjects
Only Parties to the Protocol could participate;
Participation is voluntary and approved by eachParty;
National CDM authority to be set up;
Non-Annex I Parties (host country) must benefit
from project activities resulting in certified emission
reductions (CERs);
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Principal Requirements for CDM
Projects
Projects must assist host countries in achieving
sustainable development and contributing to the
ultimate objective of the Convention;
Projects must result in real, measurable and long-
term benefits related to the mitigation of climate
change;
Projects must result in reductions in emissions that
are additional to any that would occur in the
absence of the certified project activity.
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Principal Requirements for CDM
Projects
The COP/MOP shall elaborate modalities and procedures
that ensure transparency. Efficiency and accountability
through independent auditing by operating entities and
verification of project activities;
A share of proceeds from the CERs will be collected from
the CERs issued to meet the administrative costs of the
secretariat maintaing CDM activities as well as
adaptation fund set up to assist developing countries
that are seriously affected by climate change.
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Principal Requirements for CDM
Projects
Projects formally initiated under the Activities
Implemented Jointly are eligible to be convertedinto CDM effectively from January 2000 if they meet
the criteria.
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Host Country Approval
Eligibility Criteria
PurposeThe purpose of the clean development mechanism
(CDM) is defined in Article 12 of the Kyoto Protocol to theUnited Nations Framework Convention on Climate Change.
The CDM has a two-fold purpose: (a) to assist developing
country Parties in achieving sustainable development,
thereby contributing to the ultimate objective of the
Convention, and (b) to assist developed country Parties in
achieving compliance with part of their quantified emission
limitation and reduction commitments under Article 3.
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EligibilityThe project proposal should establish the following
in order to qualify for consideration as CDM project
activity:
Additionalities: Emission Additionality: The project should lead to real,
measurable and long term GHG mitigation. The
additional GHG reductions are to be calculated with
reference to a baseline.
Financial Additionality: The procurement of CertifiedEmission Reduction (CERs) should not be from Official
Development Assistance (ODA).
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Sustainable Development IndicatorsIt is the prerogative of the host Party to confirm whether a
clean development mechanism project activity assists it in achieving
sustainable development. The CDM projects should also beoriented towards improving the quality of life of the poor from the
environmental standpoint.
Following aspects should be considered while designing
CDM project activity:
1.Social well being:The CDM project activity should lead to alleviation of poverty
by generating additional employment, removal of social disparities
and contribution to provision of basic amenities to people leadingto improvement in quality of life of people.
2. Economic well being:The CDM project activity should bring in additional
investment consistent with the needs of the people.
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3. Environmental well being:
This should include a discussion of impact of the project
activity on resource sustainability and resource degradation, if
any, due to proposed activity; bio-diversity friendliness; impact
on human health; reduction of levels of pollution in general;
4. Technological well being:The CDM project activity should lead to transfer of
environmentally safe and sound technologies that are
comparable to best practices in order to assist in upgradation
of the technological base. The transfer of technology can be
within the country as well from other developing countries
also.
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The Seventh Conference of Parties (COP-7) to the UNFCCCdecided that Parties participating in CDM should designate a
National Authority for the CDM.
As per the CDM project cycle, a project proposal should include
written approval of voluntary participation from the DesignatedNational Authority of each country and confirmation that the
project activity assists the host country in achieving sustainable
development.
Accordingly the Central Government constituted the National
Clean Development Mechanism (CDM) Authority for the purpose
of protecting and improving the quality of environment in terms of
the Kyoto Protocol.
National CDMA Authority
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The composition of the "National Clean Development Mechanism(CDM) Authority" is as follows:
1. Secretary (Environment and Forests) Chairperson
2. Foreign Secretary or his nominee Member
3. Finance Secretary or his nominee Member
4. Secretary, Industrial Policy and Promotion or his nominee Member5. Secretary, Ministry of Non Conventional Energy Sources or his nominee Member
6. Secretary, Ministry of Power or his nominee Member
7. Secretary, Planning Commission or his nominee Member
8. Joint Secretary (Climate Change), Ministry of Environment and Forests Member
9. Director (Climate Change), Ministry of Environment and Forests Member-
Secretary
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EVALUATION PROCEDURE
CDM Authority receives projects for evaluation and approval as per the guidelines
and general criteria laid down in the relevant rules and modalities pertaining toCDM in addition to the guidelines issued by the Clean Development Mechanism
Executive Board and Conference of Parties serving as Meeting of Parties to the
United Nations Framework Convention on Climate Change.
The evaluation process of CDM projects includes an assessment of the probability of
eventual successful implementation of CDM projects and evaluation of extent towhich projects meet the sustainable development objectives, as it would seek to
prioritize projects in accordance with national priorities.
CDM Authority can recommend certain additional requirements to ensure that the
project proposals meet the national sustainable development priorities and comply
with the legal framework so as to ensure that the projects are compatible with thelocal priorities and stakeholders have been duly consulted.
The Authority ensures that in the event of project proposals competing for same
source of investment, projects with higher sustainable development benefits and
which are likely to succeed are accorded higher priority.
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The Authority also carries out the financial review of project proposals to ensure
that the project proposals do not involve diversion of official development
assistance in accordance with modalities and procedures for Clean Development
Mechanism and also ensure that the market environment of the CDM project is
not conducive to under-valuation of Certified Emission Reduction (CERs)
particularly for externally aided projects.
The Authority carries out activities to ensure that the project developers have
reliable information relating to all aspects of Clean Development Mechanism
which include creating databases on organizations designated for carrying out
activities like validation of CDM project proposals and monitoring and verification
of project activities, and to collect, compile and publish technical and statistical
data relating to CDM initiatives in India.
The Member-Secretary of the National Clean Development Mechanism (CDM)
Authority is responsible for day-to-day activities of the Authority including
constituting committees or sub-groups to coordinate and examine the proposals
or to get detailed examination of the project proposals.
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Carbon Funds & Facilities
The World Bank Carbon Finance Unit (CFU) uses money
contributed by governments and companies in OECD countries to
purchase project-based greenhouse gas emission reductions in
developing countries and countries with economies in transition.The emission reductions are purchased through one of the CFU's
carbon funds on behalf of the contributor, and within the
framework of the Kyoto Protocol's Clean Development
Mechanism (CDM) or Joint Implementation (JI).
Organisation for Economic Co-operation and Development - OECD
Welcome to the OECD, an international organisation helping governments tackle the economic, social and governancechallenges of a globalised economy.
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Thank you
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