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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