08 po in Environmental laws, Green audit and Carbon related areas

• 1. PROFESSIONAL OPPORTUNITIES IN ENVIRONMENTAL LAWS, GREEN AUDIT & CARBON RELATED AREAS CA. Rajkumar S. Adukia 098200 61049 [email protected] [email protected]

2. Professional Opportunities in Carbon Credit 1. Conceptualizing the Clean Development Mechanism (CDM) project 2. Quantification of greenhouse gases (GHG) Carbon Footprint 3. Selection of Cleaner technologies for New projects 4. Project risk analysis 5. Registration of project - both national and international level 6. Obtaining Host country approval 7. Preparation of Project Concept Note 8. Preparation of Project Design Document [email protected] 3. Professional Opportunities in Carbon Credit 9. Selection of Methodologies and Baseline 10. Legal and regulatory advice during negotiations with host country Designated National Authority (DNA) 11. Advice on the appointment of independent validators 12. Assistance to achieve registration of the project by the CDM Executive Board 13. Assistance in getting verification done by Designated Operational Entity (DOE) 14. Ensure Compliances 15. Assisting various Ministries associated with National Action Plan on Climate Change (NAPCC) [email protected] 4. Professional Opportunities in Carbon Credit 16. Carbon Finance 17. Energy Audit under The Energy Conservation Act 2001 18. Advise on investment in carbon credit 19. Accounting advisory services 20. Taxation advisory [email protected] 5. Professional Opportunities in Environmental Laws and Green Audit 1. As Environmental Consultants - give opinion on viability of various projects, technologies to prevent pollution and clean up polluted resources 2. Obtain consents for establishment of Unit 3. Submission of Gross Block investment certificate along with the consent application for establishment of a Unit. 4. Environmental clearance under the Environment Impact Assessment Notification. 5. Record keeping of various hazardous wastes, chemicals etc, as prescribed under the Hazardous Wastes (Management and Handling) Rules, 1989 and Manufacture, Storage, and Import of Hazardous Chemicals Rules, 1989. [email protected] 5 6. Professional Opportunities in Environmental Laws and Green Audit 6. Status of compliance of Rules 5, 7, 10,11,12,13 and 18 under the Manufacture, Storage, and Import of Hazardous Chemicals Rules, 1989 need to be given in the application for consent to establish/operate/renewal of consent. This status of compliance can be given by Chartered Accountants in the form of a certificate of compliance. a. Rule 5 Notification of major accident b. Rule 7 Notification of sites c. Rule 10 Preparation and submission of safety report d. Rule 11 Updation of safety report [email protected] 7. Professional Opportunities in Environmental Laws and Green Audit e. Rule 12 Requirements of further information to given to the authority f. Rule 13 Preparation of on-site emergency plan by the occupier g. Rule 18 Import of hazardous chemicals 7. After consent to establish/operate is obtained under the Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981, CA can ensure on a monthly/quarterly/half-yearly basis that the conditions of the consent order are complied with by the industrial unit. [email protected] 8. Professional Opportunities in Environmental Laws and Green Audit8. CA can also ensure on a monthly/ quarterly/ halfyearly basis that the conditions of the authorization are complied by the industrial units under the Hazardous Wastes (Management and Handling) Rules, 1989. 9. Give report or certificate with regard to capital investment under the Biomedical waste (Management and Handling) Rules, 1998. This is an important document to be submitted along with the application for authorization. 10. Environmental Audits [email protected] 9. WHY CARBON CREDIT CAME INTO EXISTENCE GEOGRAPHICAL BOUNDARY CAN BE DIVIDED ATMOSPHERE IS INDIVISBLE WORLD DISCUSSION STARTED ON HOW TO MITIGATE CLIMATE CHANGE VARIOUS ALTERNATIVES DISCUSSED WHO ARE RESPONSIBLE FOR CLIMATE CHANGE ? [email protected] 10. Climate Change Temperature Increase of 0.4O C in last 100 years.Increase in monsoon seasonal rainfall across West Coast, APDecrease in monsoon in North East India, KeralaClimate Models predict 2-4 O C rise by 2050s [email protected] 11. Climate [email protected] 12. Effects of changing climate A decrease in the quantity and quality of water in many arid and semi-arid areasA decrease in the reliability of hydropower and plantation biomass.An increase in the loss of species and degradation of key ecosystems such as coral reefs, which play a critical role in the economy of some developing countries;The displacement of tens of millions of people in low-lying areasAn increased threat in national and regional security because of the loss of natural resources and the potential flow of environmental refugees An increase in the incidence of vector-borne diseases (e.g., malaria and dengue), water-borne diseases (e.g., cholera), and malnutrition throughout the tropics and sub-tropics, where millions of lives are rajkumarfcalost every year; [email protected] 12 13. Effects of changing climate A decrease in agricultural productivity in the tropics and sub-tropics. For low-lying areas in the world, the threat of climate change is a matter of survival. The sea level could rise by one meter over the next century, which would have the following consequences In countries with significant low-lying areas, coastal communities would be severely threatened. For example, 17% of the land area of Bangladesh would be lost and tens of millions of people displaced. The survival of low-lying small island states would be in doubt, in particular for the many island states in the Indian and Pacific Ocean and Caribbean that are only a few meters above sea level.While no one will be able to escape from climate change, it is the poorer people and countries who are most vulnerable to its negative impacts. [email protected] 14. [email protected] 15. [email protected] 16. Key Words Global warming is the increase in the average temperature of the Earth's near-surface air and oceans in recent decades and its projected continuation. GHG: Green House Gases (eg. Carbon dioxide, Methane, Nitrous oxide, HFC 23, Sulphur hexafluoride and Per fluoro carbons) UNFCCC: United Nations Framework Convention on Climate Change KP: Kyoto Protocol CERs: A certified emission reduction or CER is a unit issued pursuant to reduction in GHG emissions equal to one metric tonne of carbon dioxide equivalent, calculated using global warming potentials defined by UNFCCC. Clean development mechanism (CDM) : Article 12 of the Kyoto Protocol defines the CDM as. The purpose of the clean development mechanism shall be to assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objective of the Convention, and to assist Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction rajkumarfcacommitments. [email protected] 17. The Green House [email protected] 18. Global Initiative to Mitigate CC United Nations Conference On Human Environment (1972) Vienna Convention For Protection Of Ozone Layer (1985) Montreal Protocol (1987) Intergovernmental Panel on Climate Change (1988) United Nations Conference on Environment And Development (1992) at Rio Conference Of The Parties To The UNFCCC ( from 1995 ) Kyoto Protocol (1997) Marrakesh Accord ( 2001 ) World Summit on Sustainable Development ( WSSD ), 2002 Global Environment Facility ( GEF ) rajkumarfcaPrototype Carbon [email protected] Bank, 2002 Fund (PCF), World 18 19. United Nations Framework Convention on Climate Change (UNFCCC)UNFCCC An international environmental treaty entered into force on 21st March 1994. Signed by 154 states (plus the EU) in 1992 Currently 195 parties have ratified UNFCCC Based on three principles 1. Common but differentiated responsibility; 2. Precautionary approach; 3. Sustainable Economic Growth and Development. Divides countries into two main groups - Annex I (Developed) & Non-Annex I Countries (Developing). Under the UNFCCC, the Annex I parties, consisting of highly industrialized countries and countries undergoing transition to a market economy, have legally binding greenhouse gas (GHG) emission limitation and reduction rajkumarfcacommitments while developing countries have non-binding [email protected] 19 obligations to limit emissions. 20. Kyoto Protocol Its an addition to the UNFCCC Treaty. Is an international and legally binding agreement It was negotiated in Kyoto, Japan and entered into force on 16th February 2005 It assigns mandatory targets for signatory nations to reduce their emission of the specified 6 greenhouse gases, or engage in emissions trading if they maintain or increase emission of these gases. Annex I (developed countries) parties of the UNFCCC have agreed to reduce their GHGs by 5.2 % below 1990 levels in the Protocols 1st commitment period The first commitment period under this Protocol starts rajkumarfcafrom calendar year 2008 to calendar year end 2012. [email protected] 20 21. Greenhouse Gases (GHGs) Covered in Kyoto Protocol 1. 2. 3. 4. 5. 6.CO2 - Carbon dioxide CH4 - Methane C2O - Nitrous oxide PFCs - Perfluorocarbons HFCs Hydrofluorocarbons SF6 - Sulphur [email protected] 22. Global Warming Potential of [email protected] 23. Kyoto Protocol The Flexibility Mechanisms Provides for 3 co-operative implementation mechanism. 1) Joint Implementation (JI), (which allows countries to claim credit for emission reduction that arise form investment in other industrialized countries, which result in a transfer of 'emission reduction units' between countries )2) Clean Development Mechanism (CDM), (through which industrialized countries can finance mitigation projects in developing countries contributing to their sustainable development )3) International Emissions Trading (ET) (which permits countries to transfer parts of their 'allowed emissions' assigned amount units ) [email protected] 24. India & Carbon Credits India ratified UNFCCC on 1st November 1993. India ratified Kyoto Protocol on 26th August 2002 The Ministry of Environment and Forests, Government of India, is the nodal agency for climate change issues in India. The National Action Plan on Climate Change (NAPCC), was released by the Prime Minister on 30th June, 2008 India is being heralded as the next carbon credit destination of the world. On 7th September 2012, the one billionth CER credit under the KPs CDM was issued to a project at a manufacturing plant in India that has switched its fuel source from coal and oil to locally gathered biomass. [email protected] 25. Indias National Action Plan on Climate Change (NAPCC) NAPCC was released on 30th June, 2008 It is A National Document compiling action taken for addressing the challenge of Climate Change, and the action it proposes to take The Action Plan, would be implemented through a core of eight National Missions running through 2017: 1. National Solar Mission 2. National Mission for Enhanced Energy Efficiency 3. National Mission on Sustainable Habitat 4. National Water Mission 5. National Mission for Sustaining the Himalayan Ecosystem 6. National Mission for creating a Green India) 7. National Mission for Sustainable Agriculture 8. National Mission on establishing a Strategic Knowledge Platform for Climate Change. [email protected] 26. Contd The Prime Ministers Council on Climate Change is in charge of the overall implementation of the plan. The Council will also be responsible for periodically reviewing and reporting on each missions progress. The Council is Chaired by the Prime Minister. The NAPCC consists of several targets on climate change issues and addresses the urgent and critical concerns of the country. The National Missions were to be institutionalized by the respective Ministries and would be organized through inter-sectoral groups. [email protected] 27. Contd. Each Mission was to evolve specific objectives spanning the remaining years of the 11th plan period at the time it was laid down and the 12th Plan Period and each Mission will report publicly on its annual performance. Ministries with lead responsibility for each of the missions are directed to develop objectives, implementation strategies, timelines, and monitoring and evaluation criteria, to be submitted to the Prime Ministers Council on Climate Change. Each Mission will report publicly on its annual performance All the missions have been implemented and progress is rajkumarfcabeing made [email protected] 27 [email protected] 28. Clean Development Mechanism (CDM) CDM offers industrialized countries the possibility to engage in economically and environmentally competitive emission reduction projects in developing countries (the NonAnnexure I countries). Through the CDM, certified emission reductions (CERs) will be generated. These CER credits, each equivalent to one tonne of CO2, can be can be traded and sold, and used by industrialized countries for the purpose of being counted towards meeting Kyoto targets. [email protected] 29. Institutional Framework The CDM is administered by the CDM Executive Board (CDM Board) CDM Board reports and is accountable to the Conference of Parties (COP). Developing country is the Project Developer also known as the Host Party/Country Annexure 1 countries are the Investors The project has to be first approved by Designated National Authority (DNA) of the Host country where the project is being set up. [email protected] 30. Contd The Designated National Authority (DNA) in India is the National Clean Development Mechanism Authority (NCDMA) An institution which verifies the essential prerequisites for CDM projects and certifies the emission reductions is the Designated Operational Entity (DOE) [email protected] 31. Project requirements Must promote sustainable development as defined by host countries Emission reductions must be: Real Measurable AdditionalFunding for CDM must not divert funds from existing government development programs [email protected] 32. Carbon Credits Carbon credits are reductions of emission of Green House Gases (GHGs) caused by a project.1 M ton CO2 = 1 carbon credit = 1 CER [Certified Emission Reduction Unit in CDM terminology]The reduction is achieved by improved and modern technology and process.VER Voluntary/Verified Emission reductions (For non registered Projects) [email protected] 33. Host country eligibility requirements Ratified Kyoto Protocol Designate a DNA - Designated National Authority Approves CDM projects Confirms project in line with countrys sustainable development agenda. Confirms project in accordance with all laws Reviews PDD to see if completeApproval process not set by CDM. Each country allowed to determine own rules [email protected] 34. Methodologies Incineration of HFC 23 waste streams Analysis of the least cost fuel option for seasonality operating biomass cogeneration plants Recovery & utilization of gas from oil wells that would otherwise be flared. Natural Gas based package cogeneration Steam system efficiency improved by replacing steam traps. Baseline methodology for decomposition of N20 from existing adipic acid production plants Method for zero emissions grid connected electricity generation from renewable [email protected] 35. Methodologies Methodology from greenhouse gas reductions through waste head recovery & utilization for power generation at cement plants Avoid emissions from organic waste through alternative waste treatment processes Substitute of CO2 from fossil or mineral origin by CO2 from renewable sources in the production of inorganic compounds Methods for bus rapid transit projects Methane emissions reduction from organic waste, water and bio-organic solid waste using composting Afforestation and reforestation activities [email protected] 36. Small Scale CDM Projects Power projects upto 15 mega watts Energy saving of 60 giga watts hours per year Reduction of 60 kt CO2 per year. A & R Sequestration of 8 kt CO2 It should not be debundled component of large methodology Approved Simplified Methodologies by CDM EB Same DOE can undertake validation, verification and certification Bundling of projects feasible [email protected] 37. CDM Project Cycle - Basics Preparation of PIN - DNA Preparation of PDD - UNFCCCProject Validation By UNFCCC Accredited DOEHost Country Approval To the Candidate ProjectONE TIME ACTIVITY Submission for Registration (UNFCCC CDM Executive Board)Project Performance Monitoring by Project ProponentRECURRING ACTIVITYCertification & Issuance of CERs (DOE & UNFCCC)[email protected] 38. CDM Registration Step 1: PDD submission Project Design Document Presents information on the essential technical and organizational aspects of project activity Contains information on activity, application of approved baseline and monitoring methodologies Submitted to DOE, which decides on validity. Must be accepted by EB Must demonstrate project will result in net carbon emission reductions [email protected] 39. Baseline Methodology Application of an approach for determination of baseline scenario Should reflect aspects such as environmental conditions and past land uses and land-use changes Must be established in a transparent and conservative manner Submitted to DOE, which decides on validity. Must be accepted by EB [email protected] 40. The Additionality Test additionality criteria, The emission reductions of the proposed project must be additional to any that would occur in absence of the project. Would the project have happened otherwise? Emission Additionality Financial Additionality Environmental Additionality Technological Additionality [email protected] 41. Host Country Approval Project must obtain approval from the host government. The Designated National Authority (DNA) in India is the National Clean Development Mechanism Authority (NCDMA) The NCDMA is a single window clearance for CDM projects in the country. Once the members of NCDMA are satisfied, the Host Country Approval (HCA) is issued by the Member-Secretary of the National CDM rajkumarfcaAuthority. [email protected] 42. Step 2: Validation and Registration Validation conducted by a DOE Reviews PDD Validates proposed CDM project and submits a validation report to EB PDD Written approval of project by DNA Explanation of response to public commentsRegistration Requested by DOE to the EB Registration is final after 8 weeks unless a review is requested [email protected] 43. Step 3: Implementation and Monitoring Project Implementation Follow methodology written in PDDMonitoring Follow methodology set in the PDD Complete and submit a monitoring report Includes estimates of carbon emission reductions Available to the public [email protected] 44. Step 4: Verification and certification Verification Independent review of emission reductions by a DIFFERENT DOE DOE submits verification report to EB and is made publicly available Report covers a specific periodCertification Conducted by DOE Specific period, project achieved certain level of emission reductions Reductions are additional [email protected] 45. Registration Fee USD 0.10 per CER for the first 15,000 tonnes of CO2 equivalent for which issuance is requested in a given calendar year; USD 0.20 per CER for any amount in excess of 15,000 tonnes of CO2 equivalent for which issuance is requested in a given calendar year Maximum Fee USD 350,000 No registration fee to be paid for CDM project activities with expected average annual reduction below 15,000 t CO2-equivalent. No registration fee are to be paid for CDM project activities hosted in least developed countries [email protected] 46. Step 5: Issuance of CERs CER: Certified Emission Reduction credits Issued after verification and certification by DOE Can be sold in international emissions reduction marketProject review After credits sold, project can review what steps it wants to take, e.g.: Dissolution of project Renewal for another crediting period Change of project participants [email protected] 47. CDM Registration and CER [email protected] 48. CDM Registration and CER [email protected] 49. CDM Registration and CER [email protected] 50. TYPICAL Full CDM Cycle Time Frame Registration Process=TOTAL 8 12 Months [Existing Methodology], 24 Months [for New Methodology] Project Design Document: Large scale - 3 to 4 months, Small scale PDD : 1 to 2 months Host country approval : 2 to 4 months Validation Registration Adopt an approved methodology : about 2 months Propose a new methodology : 6 to 12 monthsLarge scale PDD: 8 weeks after submission unless revision req.Small scale PDD: 4 weeks after submission unless revision req.Accrual Process Accrual Process=TOTAL about 14 Months Data Generation Duration [Say 1 year] Certification About 1 Month rajkumarfcaInternational Trading & FINAL Receipt of fundsAbout 1 Month [email protected] 51. Factors determining CER price Countrys rating in terms of country risk, credibility and performance of NCDMAThe status of the projectThe size of the project / offerings of CERsThe history of the project in honouring its commitments to buyersCredit rating and standing of the project developersNo. of project participantsReputation of project participantsThe work done by the project proponents in terms of sustainable [email protected] 52. Industries having scope of generation of CERs Agriculture Energy ( renewable & non-renewable sources) Manufacturing Fugitive emissions from fuels (solid, oil and gas) Metal production Mining and mineral production Chemicals Afforestation & reforestation [email protected] 53. Carbon Credit Supply Chain (After the advent of Exchanges)[email protected] 54. Risks associated with CDM [email protected] 55. Transaction Structures Upfront payment BuyerSeller Future stream of CERsPayment on Delivery BuyerSeller Forward contract @ fixed [email protected] 56. Transaction Structures contd. Payment on Delivery BuyerSeller Forward contract @ floating priceOption payment future delivery BuyerSeller Option contract @ Option Purchase PriceSpot Delivery One time payment BuyerSeller One time delivery No Forward Contract [email protected] 57. Accounting Issues In case of self generated CERs What is the stage at which the carbon credits meet the definition of an asset? If the carbon credits meet the definition of an asset, then what is the nature of this asset? If the carbon credits meet the definition of an asset, then when should the carbon credits be recognised? If an asset in respect of carbon credits is recognised, what account should be credited? How should carbon credits, if these are assets, be measured? How should impairment of these assets be dealt with in terms of identification and measurement of impairment How should carbon credits be presented in the financial statements? [email protected] 58. Accounting Issues When should the carbon credits be derecognised? What should be the treatment of gains and losses on derecognition? When futures contracts of carbon credits are traded on an exchange, an issue would arise as to whether these would be considered as financial instruments within the meaning of AS 30, Financial Instruments: Recognition and Measurement What would be the nature of future contracts, which are not covered by AS 30/AS 31 and how they should be accounted for?For purchased CER If an entity other than the originator/generator of carbon credits, purchases carbon credits from the exchange for the purposes of sale, it would be a current asset. Should it be shown as inventories? Should Accounting Standard (AS) 2, Valuation of Inventories, be applied to such inventories? [email protected] 59. Stages of asset recognition when the project is registered entitling it to earn CERs in the future, or when the CERs are applied for, or when the CERs are actually received, or at any other point of time like sale of [email protected] 60. Nature of Asset Is it a monetary asset? Or a financial asset? Or an intangible asset? Or any other type of asset like [email protected] 61. Measurement of CER Should these be measured at the cost of earning the CERs at the time of initial recognition or at fair value? Should subsequent measurement be at cost or fair value? If these are to be measured at cost, what should be considered as [email protected] 62. Guidance Note on Accounting for Self-generated Certified Emission Reductions (CERs)Issued by Institute of Chartered Accountants of India (ICAI) on 11th February 2012 An entity should apply this Guidance Note for accounting periods beginning on or after April 01, 2012. Is CER an Asset? CER is an asset as per the definition given in the Framework for the Preparation and Presentation of Financial Statements, issued by the ICAI An asset is a resource controlled by the enterprise as a result of past events from which future economic benefits are expected to flow to the enterprise. [email protected] 63. Contd When CERs should be recognised in the financial statements? As per paragraph 88 of the Framework, the criteria for recognition of an asset are as follows: 88. An asset is recognised in the balance sheet when it is probable that the future economic benefits associated with it will flow to the enterprise and the asset has a cost or value that can be measured reliably. Therefore CERs come into existence when these are credited by UNFCCC in a manner to be unconditionally available to the generating entity. CERs should not be recognised before that stage. [email protected] 64. Contd What type of Asset is a CER? Keeping in view the non-physical form of CERs, the definition of intangible asset, as per Accounting Standard (AS) 26, Intangible Assets, is noted as follows: An intangible asset is an identifiable nonmonetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. [email protected] 65. Contd Therefore, though CERs are non-monetary assets without a physical form, they do not strictly fall within the meaning of intangible asset as per AS 26. CERs are inventories of the generating entity as they are generated and held for the purpose of sale in the ordinary course of business. Therefore, even though CERs are intangible assets these should be accounted for as per the requirements of AS 2 Valuation of Inventories [email protected] 66. Contd Measurement of CERs? CERs are inventories for an entity which generates the CERs. Therefore, the valuation principles as prescribed in AS 2 should be followed for CERs. As per AS 2, inventories should be valued at the lower of cost and net realisable value. Accordingly, CERs should be measured at cost or net realisable value, whichever is lower. [email protected] 67. Contd Measurement of Underlying Assets related to CERs? For the generation of CERs, the generating entity may create certain intangible and tangible assets. For example, for reducing emissions, an entity may carry out some research and development which may result into creation of an intangible asset. Insofar as expenditure on research and development is concerned, the entity should apply AS 26, Intangible Assets. [email protected] 68. Contd In some cases, an entity may use a tangible asset to reduce emissions. For example, an entity may use incinerators for the purpose of reducing carbon emissions. In respect of such equipments/devices, the provisions of the Accounting Standard (AS) 10, (Revised) Tangible Fixed Assets (which is being formulated)will apply Any pollution control/emission reduction devices installed by the generating entity for the purpose of generating CERs are fixed assets and [email protected] therefore they shall be accounted for as per AS 68 69. Contd An entity should present CERs as part of Inventories, in the balance sheet, separately from other categories of Inventories such as Raw Materials, Work-in-process, Finished goods and others. An entity should disclose the following information relating to CERs in the financial statements: a) No. of CERs held as inventory and the basis of valuation. b) No. of CERs under certification. c) Depreciation and operating and maintenance costs of Emission Reduction equipment expensed during the year. [email protected] 70. Climate Exchanges Climate exchanges have been established to provide a spot market in allowances, as well as futures and options market to help discover a market price and maintain liquidity. The spot market or cash market is a commodities or securities market in which goods are sold for cash and delivered immediately. The spot market for most securities exists primarily on the Internet. A futures exchange is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. [email protected] 71. Contd... Currently, futures contracts in carbon credits are actively traded in the European exchanges Carbon prices are normally quoted in Euros per tonne of carbon dioxide or its equivalent (CO2e) For trading purposes, one allowance or CER (certified emission reduction) is considered equivalent to one metric tonne of CO2 emissions. These allowances can be sold privately or in the international market at the prevailing market price. Each international transfer is validated by the UNFCCC. Each transfer of ownership within the European Union is additionally validated by the European Commission. [email protected] 72. Exchanges trading in carbon allowances Chicago Climate Exchange European Climate Exchange Nord Pool Powernext Multi Commodity Exchange National Commodity and Derivatives Exchange Indian Energy Exchange [email protected] 73. Multi Commodity Exchange of India Ltd. (MCX) MCX is a demutualised nationwide electronic multi commodity futures exchange set up by Financial Technologies with permanent recognition from Government of India for facilitating online trading, clearing & settlement operations for futures market across the country. Headquartered at Mumbai The exchange started operations in November 2003. [email protected] 74. Indian Energy Exchange Limited (IEX) IEX is Indias first nationwide, automated, and online electricity trading platform. It has been conceived to catalyse the modernisation of electricity trade in the country by ushering in a transparent and neutral market through a technologyenabled electronic trading platform. IEX is a demutualised exchange (for profit shareholder owned corporation) IEX commenced operations on 27th June 2008 Regulator of IEX: Central Electricity Regulatory Commission (CERC) [email protected] 75. Energy and Environment Interphase Energy and environment are essential for sustainable development. The poor are disproportionately affected by environmental degradation and lack of access to clean, affordable energy services. Section 2(h) of the Energy Conservation Act 2001, defines Energy as Energy means any form of energy derived from fossil fuels, nuclear substances or materials, Hydro-electricity and includes electrical energy or electricity generated from renewable sources of energy or biomass connected to the grid. [email protected] 76. Contd About 20% of worlds energy is generated from coal and about 60% of worlds energy is generated from oil and natural gas. Because of extensive use of fossil fuel, such as coal, oil and natural gas, as primary source of energy today, the harmful emissions of GHG (Green House Gasses) such as Carbon Dioxide increases the GHG level and causes the Greenhouse Effect and eventually global warming. Scientists believes that global warming will cause the average World temperature rise by one Degree Celsius by the year 2020 and four Degree Celsius by the end of 21st century. [email protected] 77. Energy Conservation Energy conservation is the practice of decreasing the quantity of energy used. It can be achieved through efficient energy use, where energy use is decreased while achieving a similar outcome, or by reduced consumption of energy services. Energy conservation facilitates the replacement of nonrenewable resources with renewable energy. It is often the most economical solution to energy shortages, and is a more environmentally benign alternative to increased energy production. Investment in energy efficiency/energy conservation is highly cost effective. It also avoids investment in fuel, mining, transportation etc. [email protected] 78. Contd Energy requirement in India is increasing rapidly. Its demand for commercial energy in 2020 is expected to increase by 250% from todays level. Economic growth is desirable for developing countries, and energy is essential for economic growth. If India is to achieve the targeted growth in GDP, it would need commensurate input of energy, mainly commercial energy in the form of coal, oil, gas and [email protected] 79. Energy Conservation in India Energy Conservation Act 2001 Enacted by the Government of India considering the vast potential of energy savings and benefits of energy efficiency. It was enacted in October 2001 but became effective from 1st March, 2002. The Act provides for the legal framework, institutional arrangement and a regulatory mechanism at the Central and State level to embark upon energy efficiency drive in the country. The Act is divided into 10 chapters, comprising of 62 sections and one Schedule. [email protected] 80. Contd Framework of the Act: Chapter I: Preliminary Chapter II:Bureau of Energy Efficiency Chapter III: Transfer of assets, liabilities etc. of Energy Management Centre to Bureau Chapter IV: Powers and functions of Bureau Chapter V: Power of Central Government to facilitate and enforce efficient use of energy and its conservation [email protected] 81. Contd Chapter VI: Power of State Government to facilitate and enforce efficient use of energy and its conservation Chapter VII: Finance, Accounts and Audit of Bureau Chapter VIII: Penalties and Adjudication Chapter IX: Appellate Tribunal for Energy Conservation Chapter X : Miscellaneous The Schedule : List of Energy Intensive Industries and other establishments specified as designated consumers. [email protected] 82. Measures proposed by the Act 1.Energy Conservation 2. Energy audit of government buildings 3. Capacity building amongst departments to take up energy efficiency programmes The Thrust Areas : a. Industry specific Task Forces. b. Notifying more industries as designated consumers. c. Conduct of energy audit amongst notified designated consumers. d. Recording and publication of best practises e. Development of energy consumption norms. rajkumarfcaf. Monitoring of compliance with mandated provision by [email protected] 83. Important Provisions Under the Act Energy intensive Industries The Schedule to the Energy Conservation Act, 2001 gives the List of Energy Intensive Industries and other establishments specified as designated consumers. Establishment of Bureau of Energy Efficiency The Bureau of Energy Efficiency (BEE) is a statutory Body under the Ministry of Power, Government of India established with effect from 1st March, 2002. The Energy Conservation Building Codes (ECBC) The BEE launched the Energy Conservation Building Code (ECBC) on 27th May 2007 in New Delhi. This code addresses the design of rajkumarfcanew, large commercial buildings to optimize the buildings energy demand. [email protected] 83 84. Contd Designated Consumers (DCs) The Central Government may, by notification, in consultation with the Bureau, specify, any user or class of users of energy as a designated consumer for the purposes of this Act. The Schedule to the Act provides a list of the Designated Consumers. These DCs have to : 1. Appoint/Designate Energy Managers 2. Get Energy Audit conducted by Accredited Energy Auditors 3. Implement Techno-Economic Viable Recommendations 4. Comply with norms of specific energy consumption fixed [email protected] 84 5. Submit Report on Steps Taken 85. Contd Labeling Programme for Appliances An energy labeling programme for appliances was launched in 2006, and comparative starbased labeling has been introduced for fluorescent tubelights, air conditioners, and distribution transformers. Energy Audits of Large Industrial Consumers In March 2007, the conduct of energy audits was made mandatory in large energy-consuming units in nine industrial sectors. it is mandatory for the designated consumers to get energy audit conducted by an accredited energy auditor These units are also required to employ certified energy managers, and rajkumarfcareport energy consumption and energy conservation [email protected] data annually. 85 86. Environmental Laws Complex and interlocking body of statutes, common law, treaties, conventions, regulations and policies to regulate the impacts of human activity on the natural environment The Indian constitution is amongst the few in the world that contains specific provisions on environment protection. The Constitution states that it is the duty of the state to protect and improve the environment and to safeguard the forests and wildlife of the country. Organisations have a legal and moral duty to comply with environmental laws and regulations. [email protected] 87. Sources of Environmental Law Treaties Bilateral MultilateralProtocols Conventions Customary International Law Judicial decisions etc. [email protected] 88. United Nations Conference on the Human Environment (UNCHE) An international conference convened under United Nations auspices held in Stockholm, Sweden from June 5-16, 1972. It was the UN's first major conference on international environmental issues, and marked a turning point in the development of international environmental politics. The conference acknowledged that the goal of reducing human impact on the environment would require extensive international cooperation, as many of the problems affecting [email protected] 88 the environment are global in nature. 89. Contd The meeting agreed upon a Declaration containing 26 principles concerning the environment and development; an Action Plan with 109 recommendations, and a Resolution. Following this conference, the United Nations Environmental Programme (UNEP) was launched in order to encourage United Nations agencies to integrate environmental measures into their programs. [email protected] 90. Important Environmental Laws in India The Environment (Protection) Act, 1986 Water (Prevention and Control) Act, 1974 Air (Prevention and Control) Act, 1981 The Public Liability Insurance Act, 1991 The Biological Diversity Act, 2002 The Indian Forest Act, 1927 Forest (Conservation) Act, 1980 The Indian Wildlife Protection Act, 1972 The National Green Tribunal Act, 2010 [email protected] 91. Environment Impact Assessment (EIA) The study to predict the effect of a proposed activity/project on the environment. Its a decision making tool - EIA compares various alternatives for a project and seeks to identify the one which represents the best combination of economic and environmental costs and benefits. EIA systematically examines both beneficial and adverse consequences of the project and ensures that these effects are taken into account during project design. [email protected] 92. Contd It helps to identify possible environmental effects of the proposed project, proposes measures to mitigate adverse effects and predicts whether there will be significant adverse environmental effects, even after the mitigation is implemented. Benefits of EIA - protection of environment, optimum utilisation of resources and saving of time and cost of the project. [email protected] 93. Stages of EIA Process Screening Setting Scope Impact Analysis Mitigation Reporting Review of EIA Decision Making Post-Monitoring [email protected] 94. Green Audit Green audit is an official examination of the effects a company has on the environment. It can also be described as the inspection of a company to assess the total environmental impact of its activities or of a particular product or process. It is also widely known as Environmental Audit. Its Aim is to review the measures taken by the company to combat pollution. [email protected] 95. Compliance of Laws under Green Audit National Environment Laws, Rules and Regulations; Notifications issued by the Government and the agencies under them; Standards issued by responsible bodies such as those for Environment Impact Assessments (EIA), ISO 14001 for Environment Management System, pollution control orders and standards issued by oversight and implementation bodies such as CPCB etc.; Sanctions and permits issued in respect of the entity by the regulatory bodies concerned; EIA reports, reviews by independent organisations, companys environment policy etc. [email protected] 96. Green Audit Report The Green Audit Report should be complete, precise, accurate and balanced. Contents should be easy to understand and free from vagueness or ambiguity It should include information which is supported by complete and relevant audit evidence and be independent, objective fair and constructive. It should contain constructive and precise recommendations. It must be persuasive and instrumental in inspiring the managements of entities to take corrective actions. The violations and omissions should also be effectively rajkumarfcamentioned in the report. [email protected] 96 97. Ministry of Environment & Forests (MOEF) Nodal agency in the administrative structure of the Central Government for the planning, promotion, co-ordination and overseeing the implementation of India's environmental and forestry policies and programmes Also serves as the nodal agency for the United Nations Environment Programme (UNEP), South Asia Co-operative Environment Programme (SACEP), International Centre for Integrated Mountain Development (ICIMOD) and for the follow-up of the United Nations [email protected] Conference on Environment and Development 97 98. Contd The Ministry is also entrusted with issues relating to multilateral bodies such as the Commission on Sustainable Development (CSD), Global Environment Facility (GEF) and of regional bodies like Economic and Social Council for Asia and Pacific (ESCAP) and South Asian Association for Regional Co-operation (SAARC) on matters pertaining to the environment. [email protected] 99. Central Pollution Control Board (CPCB) Constituted in September, 1974 Is a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract and may by the aforesaid name sue or be sued. Principal Functions of the CPCB (i) to promote cleanliness of streams and wells in different areas of the States by prevention, control and abatement of water pollution, and (ii) to improve the quality of air and to prevent, control or abate air pollution in the country. [email protected] 100. State Pollution Control Board (SPCB) Constituted by the State Government by notification in the official gazette. With regard to a Union Territory, a SPCB is not constituted. The CPCB exercises the powers and performs the functions of a SPCB for that Union Territory, however it may delegate its powers. SPCB will be a body corporate having perpetual succession and a common seal with power to acquire, hold and dispose of property and to contract and may by the aforesaid name sue or be sued [email protected] 101. National Green Tribunal Established on 18.10.2010 under the National Green Tribunal Act 2010 Objective - Effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right relating to environment and giving relief and compensation for damages to persons and property and for matters connected therewith or incidental thereto. It is a specialized body equipped with the necessary expertise to handle environmental disputes involving multi-disciplinary issues. [email protected] 102. Contd.. The Tribunal will not be bound by the procedure laid down under the Code of Civil Procedure, 1908, but shall be guided by principles of natural justice. The Tribunal is mandated to make and endeavour for disposal of applications or appeals finally within 6 months of filing of the same. Initially, the NGT is proposed to be set up at five places of sittings and will follow circuit procedure for making itself more accessible. New Delhi is the Principal Place of Sitting of the Tribunal and Bhopal, Pune, Kolkata and Chennai shall be the other 4 place of sitting of the Tribunal. [email protected] 103. Important Web Sites http://www.ipcc.ch/ http://cdm.unfccc.int/index.html http://www.worldbank.org http://envfor.nic.in/cc/index.htm http://www.cdmindia.nic.in/ http://www.mcxindia.com http://www.iexindia.com http://www.teriin.org/ http://www.cpcb.nic.in rajkumarfcahttp://www.greentribunal.in/ [email protected] 104. Questions/ Suggestions/ [email protected] 105. [email protected]