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    South Asia
     Jan 31, 2007
Indian firms cash in on pollution
By Raja M

MUMBAI - A "green intelligent" building in Rajarhat in northern India expects to earn US$170,000 a year by selling its carbon credits that the promoter earned by recycling water and using energy-saving technology. Even better, textile major JCT registered its 5.5-megawatt power plant for carbon credits and will get $452,513 as payment up front for potential carbon credits on an initial investment of just over $2 million.

Carbon trading is a system by which countries or individual companies can trade in greenhouse-gas-emission targets to reduce global pollution targets set by environmental treaties such

as the Kyoto Protocol and the European Union Emissions Trading System. Those with surplus emission targets sell to those with deficits. Carbon trading is also a way of privatizing the public cost of carbon-dioxide pollution.

Carbon credit certificates are primarily issued through the Voluntary Carbon Standard regulated by the Climate Group, an independent non-profit body working with business, finance, local leaders and regional governments. The United Nations also operates a Clean Development Mechanism (CDM) through which countries can register for carbon credits.

China and India, two of the world's hottest economies, are moving up front in the world's carbon-credit trading stakes. India's Environment and Forestry Ministry estimates that Indian companies have already earned $7.9 million through carbon-credit trading. Ecosecurities, a pioneer of carbon-credit projects that is listed on the London Stock Exchange, opened shop in India last year and announced that the Indian market was worth $40 million to $50 million annually. That can safely be said to be just the tip of the iceberg.

Robert Taylor, a consultant with the United Kingdom-based carbon-credit firm Agrinergy, which has JCT Mills among its clients, told Asia Times Online that his company is dealing with about 50 Indian clients. "The potential for India is good," he said from Mumbai. "India has probably the largest number of firms registered for carbon trading in Asia, but the issue in India is the size of the contracts." His firm is primarily focusing on the sugar, sponge-iron and cement sectors.

Globally, carbon-credit-offsetting players include such corporations as the Hong Kong and Shanghai Banking Corp, BP, Avis, Gazprom and British Airways as well as sporting events such as World Cup 2006, music events and US farmers.

Environmental groups such as Friends of the Earth are raising concerns about the legitimacy of carbon-credit practices and verification problems in the credit-certification process. Other groups have accused factories in China of using carbon-credit trading to create a loophole in the Kyoto Protocol.

At the fifth Waste Not Asia conference of 14 countries, including China, South Korea, the Philippines, Cambodia and India, which concluded in the southern Indian city of Trivandarum on January 18, India was accused of being a stark example of vested interests pushing for the widespread use of pollution-generating equipment such as incinerators so that it can cash in on carbon trading.

India, though, is grumbling that it expected a better deal from the United Nations' CDM.

"We had hoped for much higher level of foreign direct investment - and technology transfer," Environment and Forests Secretary Prodipto Ghosh told a joint press briefing with European Union and World Bank representatives at a recent climate-change conference in New Delhi. "Whatever little technology transfer has happened is due to Indian companies [that] have sourced technology from within the country or outside. The CDM has to be on a much bigger scale."

The CDM under the Kyoto Protocol lets wealthier nations trade their emission-reduction commitments with developing countries by buying carbon credits earned by the latter for projects reducing greenhouse-gas emission. Since the CDM began in 2005, India has registered more than 450 projects for carbon trading.

The future of Asian carbon trading can be seen in the UK and the US, where a two-year-old carbon-offsetting company, TerraPass, offers "products" to neutralize environmental damage caused in everyday living by home energy consumption, driving cars and air travel. Prices for the driving credit range from $30-$80 a year. The funds that Terrapass raises is pumped into various environmentally friendly cleaner-energy projects such as wind power.

The UK government has proposed carbon-credit cards for individuals to make consumers accountable for the energy they use.

Organizations such as Germany-based Atmosfair and the UK's Climate Care offer online emissions calculators with which air travelers can figure out how much carbon-dioxide emission they have caused during their flight. They can then compensate for it through donations to environmentally friendly projects worldwide.

One such beneficiary of air-travel carbon offsetting is the community kitchen for pilgrims in Sringeri Mutt in the southern Indian state of Karnataka, where the diesel engines earlier used for cooking have been replaced by a solar-energy cooking system. About 4,000 tonnes of carbon dioxide will be saved by 2012, according to Atmosfair.

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