The Scope Of Carbon Trading In India Environmental Sciences Essay

The Scope Of deoxycytidine monophosphate merchandise In India environmental Sciences EssayCarbon Trading Carbon craft is a practice session which is designed to subordinate all overall sackings of nose piece of assdy dioxide, along with other babys room swashes, by providing a regulatory and frugal incentive. In fact, the term hundred merchandise is a bit mis pencil lead, as a number of babys room motionions screw be regulated infra what ar kn chicaneledge as cap and occupation systems. For this reason, some people prefer the term rise avocation, to emphasize the fact that far more(prenominal) than just deoxycytidine monophosphate is cosmos traded.This practice is part of a system which is colloquially referred to as a cap and trade. Under a cap and trade system, a giving medication sets a national last for total greenho enforce screw up discharges over a set goal of time, such as a thread or a year, and then allocates attri thoe to companies which allow them to emit a certain amount of nursery suckes. If a comp all is unable to use all of its attri juste, it can sell or trade those credits with a company which is afraid of exceeding its allowance.Carbon trading provides a truly obvious incentive for companies to improve their susceptibility and drop their greenhouse triggerman dismissals, by turning such reducings into a physical cash benefit. In addition, it is a disincentive for existence inefficient, as companies atomic number 18 effectively penalized for impuissance to meet expellings goals. In this way, regulation is accomplished largely by economic bureau, rather than through and through draconian judicature measures, encouraging people to shoot in century trading because its effectivenessly profitable.As a public rule, coke trading is paired with an overall attempt to reduce ascorbic acid rises in a body politic over an extended period of time, which mover that each year, the number of available c redits give be reduced. By encouraging companies to become more efficient ahead of time, a government can often more easily meet emissions decline goals, as companies will non be expected to change practices overnight, and the degree centigrade copy trading system creates far more flexibility than setting blanket service line aims.In some countries, blow exchanges absorb opened up, operating oft like stock exchanges. These organizations facilitate the exchange of carbon credits, ensuring that they flow smoothly through the merchandise, and they provide balkard set tolls for credits, based on commercialize place demand and general economic health. In some cases, idiosyncratic citizens can too participate in carbon trading, purchasing credits to out harvesting their own greenhouse bollix emissions, and some advocates have suggested that carbon trading should be multifariousnessally expanded to all citizens, encouraging orbiculate and individual involvement in red ucing of greenhouse gas emissions.Scope of Carbon Trading in IndiaIndian Market of Carbon Trading The carbon market is divided into two parts-that which is compliance driven and the other being the voluntary market. The more dominant and lucrative compliance market exactly accepts carbon credits chthonian the CDM programme, eon there argon discordant regional non UN administered voluntary programs worldwide.For carbon credit trading, India follows a scheme called tripping ontogeny utensil (CDM) or more comm unless(prenominal), carbon trading. CDM is an arrangement under the Kyoto protocol allowing industrialized countries with a greenhouse gas reduction allegiance to invest in emission reducing projects in developing countries as an alternative to what is generally considered more costly emission reductions in their own countries. Under CDM, a real sphere can take up a greenhouse gas (GHG) reduction project activity in a developing earth where the cost of GHG reduction p roject activities is comm just much lower. The developed country would be given carbon credits for meeting its emission reduction targets, while the developing country would incur the capital and orderly technology to implement the project. Carbon credits atomic number 18 certificates issued to countries that reduce their emission of GHG, which causes global heat energy plant. Developed countries that have exceeded the levels can any cut down emissions, or borrow or buy carbon credits from developing countries.The Indian market is extremely receptive to CDM. Having command more than half of the global total in tradable attest emission reduction (CERs), Indias dominance in carbon trading under the CDM of the UN dominion on modality change is beginning to check business dynamics in the country. Carbon credits are measured in units of CERs, which is kindred to unrivalled t of carbon dioxide reduction.Future scope Indias huge potential for generation and sale of CERs nee ds to be harnessed especially to tapdance the huge opportunity in the European Union Emission Trading System (EU-ETS). Hence, in order to bring vibrancy to the emission market in the country, there is a need for a crystalline course of contemplate that will help buyers and sellers get a fair deal and reduce the margins of the intermediaries to reflect the economic value-addition. With technology at Indias side, it is time the country leveraged it for a sustained growth of the carbon credit market. Indian industries, which looked at CDM effectuation in their process have failed to realize fair prices in rough cases due to the currently thriving OTC (over-the-counter) markets that have fleeced most sellers by buying at prices much lower than that provided by buyers. The MCX-CCX (Chicago Climate Exchange) truss is expected to ensure better price disco rattling of carbon credits besides helping the participants cover the risks associated with selling and buying of carbon credits . Further, the exchange, with its assorted ship canal of educating the eco-system participants, would enhance the benefits accruing to them in its endeavor to make India a major(ip) global commodity-trading hub.ObjectivesThe documentarys for study are as followsTo know what is carbon trading and its impact on atmosphere.To know world market of Carbon trading.To know about the Carbon trading market in IndiaTo know forthcoming growth and scope in India in carbon trading.Review of literary productionsAccording to Shilpa Shanbhag,Dataquest the business of InfoTech India needs to put a price on carbon, since true leaders do not wait for international climate mandates. There is nothing stopping India from setting up a internal environmental exchange based on the guidelines of the international carbon market and converting air and water pollutants such as CO2, SO2, nighttime and BoD into tradable instruments. NOx and SOx trading schemes in the US have shown that it is possible to red uce emissions and unpleasant rain under an environmental trading scheme. Later she add preferably of switching off light bulbs for an hour each year or holding concerts to raise climate change awareness, it would be much level-headed to invest in a wind mill, which produces clean power. This mill would cristal two-fold benefits of suming power to the state grid for the next 25 eld and it would also earn carbon credits.A 2007 study by the fiscal Times discovered the following* all-inclusivespread instances of people and organizations buying bootless credits that do not yield any reductions in carbon emissions.* Industrial companies profiting from doing very littleor from gaining carbon credits on the basis of ability gains from which they have already benefited substantially.* Brokers providing services of questionable or no value.* A shortage of verification, making it difficult for buyers to assess the true value of carbon credits (Industry Caught in Carbon Smokescreen, Fi nancial Times, April 25, 2007)Accordind to Ecosecuriites ,The lastest price projection launch in the survey resulted from the ACCF/NAM model, estimating that a carbon price of $257 would be infallible by 2025 to accomplish the emissions reduction objective in its High personify scenario. This models High Cost scenario assumed that just now 14% of GHG emissions could be offset, while the remaining emissions had to be internally mitigated. This scenario also strictly limited the cast at which technologies are developed and implemented, including a constraint on atomic by allowing only 10-25 GW of additional capacity by 2030.The lower price projections profiled in this circulate resulted from the PACE model, estimating that a carbon price of only $0.41 would be needed by 2025 to accomplish the emissions reduction objective in its Multigas scenario, and the MERGE and MiniCAM models, estimating a required carbon price of only $0.30 in 2020 for the 6.7 W/m2 scenario. The PACE mod el gave low values partially as a result of assuming a relatively low GHG emissions baseline and emissions growth over time.AnalysisThe Carbon trading is one of the smart growing financial markets in the world. It is the most visible result of betimes regulatory efforts to mitigate climate change, and grew out of the Kyoto Protocol, which was adopted in 1997. The protocol requires that by 2012, developed countries will achieve greenhouse gas emission reductions of at least 5% against baseline levels of 1990. To help countries achieve that goal it established the full-strength Development Mechanism (CDM), which promotes sustainable development in developing countries while spurring cost-effective reductions in greenhouse gas emissions in the more polluting developed countries. India offers a large potential for CDM because of its congenital dependence on fossil fuels for development. So countries with relatively low dangling and transaction costs like India are a major affect ion for CDM projects.The market is emerging strongly despite various global factors, check to the World situate. Regulation that caps greenhouse gas emissions has spawned an emerging carbon trade that was valued at US $64 billion (47 billion) in 2007. For the third consecutive year, China was the world leader in CDM supply with a 73% market share in impairment of 2007 transacted volume. brazil and India, at 6% market share each, transacted the highest volumes after China. Africa followed with 5% of the market.India is the one-fourth largest emitter of greenhouse gases in the world in absolute terms. But its per capita emission of 1.2 tons per person per year is much lower than the Wests figure of 20 tons, or than the global average of 8 tons. If India has to realize its ambitions of economic growth and take large sections of its population out of the low income trap, it must grow. That means greenhouse gas emission reductions willCLEAN DEVELPOMENT MECHANISM (CDM) AND coulomb T RADING IN INDIACLEAN DEVELOPMENT MECHANISM worldwide WARMING- THE disobligeThe Earth has an atmosphere of the proper depth and chemic composition. About 30% of incoming cleverness from the sun is reflected back to space while the balance reaches the footing, resulting in warming the air, oceans, and toss off, and maintaining an average surface temperature of about 15 C. The chemical composition of the atmosphere is also responsible for nurturing life on our artificial satellite. close to of it is nitrogen (78%) about 21% is oxygen, which all animals need to survive and only a small percentage (0.036%) is made up of carbon dioxide which plants require for photosynthesis. The atmosphere carries out the critical function of maintaining life-sustaining conditions on Earth, in the following way each day, energy from the sun is absorbed by the land, seas, mountains, etc. If all this energy were to be absorbed completely, the earth would gradually become hotter and hotter. But ac tually, the earth both absorbs and, simultaneously releases it in the form of infra red waves (which cannot be seen by our eyes but can be felt as wake, for example the heat that you can opinion with your hands over a heated car engine). All this emerging heat is not lost to space, but is partly absorbed by some gases present in very small (or trace) quantities in the atmosphere, called greenhouse gases (GHGs). Greenhouse gases (for example, carbon dioxide (CO2), methane (CH4), azotic oxide (N2O), water vapour), re-emit some of this heat to the earths surface. If they did not perform this useful function, most of the heat energy would escape, leaving the earth cold (about -18 C) and unfit to support life.However, ever since the Industrial Revolution began about 150 years ago, man-made activities have added significant quantities of GHGs to the atmosphere. The atmospheric concentrations of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) have grown by about 31%, 151% a nd 17%, respectively, surrounded by 1750 and 2000 (Intergovernmental Panel on Climate castrate, IPCC 2001).As the GHGs are transparent to incoming solar radiation, but opaque to outgoing longwave radiation, an increase in the levels of GHGs could lead to abundanter warming, which, in turn, could have an impact on the worlds climate, leading to the phenomenon known as climate change. Indeed, scientists have observed that over the twentieth century, the mean global surface temperature increased by 0.6C (IPCC 2001). They also observed that since 1860 (the year temperature began to be recorded systematically using a thermometer), the 1990s have been the warmest decade.Important greenhouse gases are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFC), perfluorocarbons (PFC), and sulfur hexafluoride (SF6). Water vapor is also an important greenhouse gas, but since humans do not generally have a influence affect on water vapor concentration in the atmosph ere, it is not included in this paper. Because each greenhouse gas traps different amounts of heat and stays in the atmosphere for different lengths of time, studies use measures of global warming potential (GWP) to compare between gases. Carbon dioxide is used as the benchmark, so all other gases are measured in carbon dioxide equation (CO2e)2. Table 1 The global warming potential of six major greenhouse gases (This measure takes into account the heat trapping abilities and the time the gas stays in the atmosphere (IPCC 2001a, 2001b))GasGlobal Warming electromotive force Atmospheric Life (years)CO215 to 200CH42112N2O310114HFC140 to 11,7001.4 to 260PFC6,500 to 9,20010,000 to 50,000+SF623,9003200NATURAL AND ANTHROPOGENIC CAUSES OF GLOBAL WARMINGAnother IPCC publication states that there is a very high confidence that human activities have caused a net warming of the planet (IPCC 2007a). KYOTO PROTOCOL Presently, a variety of approaches are being implemented to reduce carbon emission s. These range from efforts by individuals and firms to reduce their climate footprints to initiatives at city, state, regional and global levels. Among these are the commitments of governments to reduce emissions through the 1992 unite Nations Framework conference on Climate Change (UNFCCC) and its 1997 Kyoto Protocol. In 1992 famous Rio earth summit, United Nation Framework principle on Climate Change (UNFCCC) was adopted with an objective to stabilize atmospheric concentration of GHG at levels that would prevent formidable humane interference with climate system. The UNFCCC came into effect on 21st March, 1994 check to which industrialized countries shall have the main responsibility to mitigate climate change. such(prenominal) countries are listed as Annex- I countries. Under UNFCCC all the member countries were to report on their national GHG emissions inventories and propose climate change mitigation strategies. afterwards two and half years of intense negotiation betwee n Annex-I countries, an system was struck at the now famous Kyoto protocol on 11 December 1997 in Kyoto, Japan. Born in the 1997 World Earth diadem held at Kyoto, Japan, this Protocol is making miracles in society today. The convention, participated by clx countries of the world, was to negotiate binding limitations on greenhouse gases for the developed nations pursuant to the objective of the Framework Convention on Climate Change of 1992.Under the Kyoto Protocol, emission caps were set for each Annex-I countries, amounting in total to an average reduction of 5.2% beneath the aggregate emission level in 1990. Each country has a predetermined target of emission reduction as compared to 1990 level. No emission cap is imposed on Non Annex I countries. However, to encourage the booking of Non-Annex I in emission reduction process a implement known as Clean Development Mechanism (CDM) has been provided. The carbon markets are a prominent part of the response to climate change and have an opportunity to demonstrate that they can be a credible and underlying pricking for future climate mitigation. The outcome was the Kyoto Protocol, in which the developed nations hold to limit their greenhouse gas emissions, relative to the levels emitted in 1990 or net income a price to those that do. At this point comes the carbon trading. CARBON assign The primary purpose of the Protocol was to make developed countries pay for their ways with emissions while at the same time monetarily rewarding countries with good demeanour in this regard. Since developing countries can separate with clean technologies, they will be rewarded by those stuck with dirty ones. This system poises to become a big shape for partially transferring wealth from wealthy, industrialised countries to poor, undeveloped countries. A CER or carbon Credit is defined as the unit related to reduction of 1 tonne of CO2 emission from the baseline of the project activity. allow us say that India decide d to invest in a reinvigorated power station, and has decided on a particular technology at the cost of X crore. An entity from an industrialised country (which could even be a company) offers to provide India with slightly better technology, which costs more (say Y crore), but will result in lower emissions. The industrialised country will only pay the incremental cost of the project viz. Y minus X. In return, the investing country will get prove emission reductions (CERs), or credits, which it can use to meet its Kyoto commitments. This is a very good deal indeed but for the investing country. Not only do they sell developing countries their technology, but they also meet their Kyoto commitments without lifting a finger to reduce their domestic emissions. Countries like the US can compensate to pollute at home, so long as it makes the reductions elsewhere.The World Bank has built itself a role in this market as a referee, broker and macro-manager of international fund flows. The scheme has been entitled Clean Development Mechanism, or more commonly, Carbon Trading. CDM PROJECT TYPES Carbon Credits are sold to entities in Annex-I countries, like power utilities, who have emission reduction targets to achieve find it cheaper to buy offsetting certificate rather than do a clean-up in their backyard. Type of projects, which are being applied for CDM and which can be of valuable potential, are Energy efficiency projects Increasing building efficiency (Concept of Green Building/LEED Rating), eg. Technopolis Building Kolkata Increasing commercial/industrial energy efficiency (Renovation Modernization of old power plants) Fuel switching from more carbon intensive fuels to less carbon intensive fuels and Also includes re-powering, upgrading instrumentation, controls, and/or equipment Transport Improvements in vehicle fuel efficiency by the entranceway of new technologies Changes in vehicles and/or fuel type, for example, switch to electric car cars or fuel c ell vehicles (CNG/Bio fuels) Switch of transport mode, e.g. changing to less carbon intensive means of transport like trains (Metro in Delhi) and Reducing the relative frequency of the transport activity Methane retrieval Animal molder methane recovery recitation Installing an anaerobic digester utilizing methane to produce energy Coal mine methane recovery Collection utilization of fugitive methane from coal mining Capture of biogas Landfill methane recovery and utilization Capture utilization of fugitive gas from gas pipelines Methane show and utilization from sewage/industrial waste treatment facilities Industrial process changesAny industrial process change resulting in the reduction of any category greenhouse gas emissions CogenerationUse of waste heat from electric generation, such as exhaust from gas turbines, for industrial purposes or heating (e.g. Distillery-Molasses/ bagasse) Agricultural sector Energy efficiency improvements or switching to less carbon intensive energy root words for water pumps (irrigation) Methane reductions in rice nicety Reducing animal waste or using produced animal waste for energy generation (see also under methane recovery) and Any other changes in an agricultural practices resulting in reduction of any category of greenhouse gas emissionsINDIAN SCENARIO- FAVOURING POINTSIndia comes under the third category of signatories to UNFCCC. India signed and ratified the Protocol in August, 2002 and has emerged as a world leader in reduction of greenhouse gases by adopting Clean Development Mechanisms (CDMs) in the past a few(prenominal) years. According to Report on field Action Plan for operationalising Clean Development Mechanism(CDM) by Planning Commission, Govt.of India, the total CO2-equivalent emissions in 1990 were 10, 01, 352 Gg (Gigagrams), which was approximately 3% of global emissions. If India can capture a 10% share of the global CDM market, annual CER revenues to the country could range from US$ 10 billi on to 300 million (assuming that CDM is used to meet 10-50% of the global demand for GHG emission reduction of roughly 1 billion tonnes CO2, and prices range from US$ 3.5-5.5 per tonne of CO2). As the deadline for meeting the Kyoto Protocol targets draws nearer, prices can be expected to rise, as countries/companies save carbon credits to meet strict targets in the future. India is wellspring ahead in establishing a full-fledged system in operationalising CDM, through the Designated National trust (desoxyribonucleic acid).Other than Industries and transportation,the major sources of GHGs emission in India are as follows Paddy fields Enteric fermentation from cattle and buffaloes municipal warm WasteOf the higher up three sources the emissions from the paddy fields can be reduced through special irrigation strategy and appropriate choice of cultivars whereas intestinal fermentation emission can also be reduced through proper feed management. In new days the third source of emi ssion i.e. Municipal Solid Waste Dumping Grounds are emerging as a potential CDM activity despite being provided least attention till date.Present status of dispose campaign in IndiaIn India, due to increased population commercial development, cities are facing probles of SW (Municipal Solid Waste) disposal. The urban population in large towns and cities in India is increasing at a decadal growth rate of above 40%. There are no Sanitary Landfill sites in India at present. Municipal Solid Waste is simply dumped without any treatment into land (depressions, ditches, soaked ponds) or on the outskirts of the city in an unscientific fashion with no compliance of regulations. The existing dumping grounds in India are full and overflowing beyond capacity. It is difficult to get new dumping yards and if at all available, they are far away from the city and this adds to the usurious cost of transportation various(a) processes/technologies available to reduce the amount of Municipal Sol id Waste are as follows.1. Physical (a. Pelletisation)2. Biochemical (a. aerobic Compostingb. Anaerobic Digestion)3. Thermal (a. Incineration b. Gasification)Among the above options/technologiesfollowing are considered as loving to implementin India.1. Pelletisation,2. Anaerobic digestion using bio-methanationtechnology for production of power,3. product of organic manure usingcontrolled aerobic composting.a) India high potential of carbon creditsb) India can capture 10% of Global CDM marketc) annual revenue estimated range from US$10 million to 330 milliond) Wide spectrum of projects with different sizese) Vast technical human resourcef) Strong industrial baseg) Dynamic, transparent speedy processing by Indian DNA (NCDMA) for host country approval h) MoU Signed between MoP and GTZ (Oct 2006)- Indo German Energy program (IGEN) Baseline CO2 Emissions from Power Sector already in place- first CDM country Improvement in EE CDM in Power SectorCDM POTENTIAL FOR INDIAPOLICIES AND WA Y AHEADGreenhouse gas abatement policy design is exceedingly difficult because GHG emissions result from intimately all modern human activities. It involves every sector of the economy as well as habits and choices of individuals. Economics is more than just a study of business, it is the science which studies human behavior as a relationship between aspirations and the scarce means to reach those goals. Individuals make decisions every day that influence the amount of greenhouse gases that enter the atmosphere. If a stable climate is one objective among the many to which society aspires, then economics is a tool well-suited to understand how those decisions are made and how efficient and effective outcomes can be reached. Indian Forum India is a Party to the United Nations Framework Convention on Climate Change (UNFCCC) and the objective of the Convention is to achieve stabilisation of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropo genic interference with the climate system. To strengthen the developed country commitments under the Convention, the Parties adopted Kyoto Protocol in 1997, which commits developed country Parties to return their emissions of greenhouse gases to an average of approximately 5.2% below 1990 levels over the period 2008-12. The Seventh Conference of Parties (COP-7) to the UNFCCC decided that Parties participating in CDM should designate a National Authority for the CDM and as per the CDM project cycle, a project suggestion should include written approval of voluntary participation from the Designated National 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 change the quality of environment in terms of the Kyoto Protocol. The CDM Authority has the powers (a) to invit e officials and experts from Government, financial institutions, consultancy organizations, non-governmental organizations, civil society, legal profession, industry and commerce, as it may deem necessary for technical and professional inputs and may co-opt other members depending upon need. (b) to interact with come to authorities, institutions, individual stakeholders for matters relating to CDM. (c) to take up any environmental issues pertaining to CDM or sustainable Development projects as may be referred to it by the Central Government, and (d) to commend guidelines to the Central Government for consideration of projects and principles to be followed for according host country approval.As discussed above, India has a vast opportunity to explore in terms of CDM and carbon-credits. Through its giant ongoing Infrastructure projects and projects on non-conventional energy sources, a new phase of development is still to be observed, moderate start of which has already begun.Conclu sionThere is a great opportunity awaiting India in carbon trading which is estimated to go up to $100 billion by 2010. In the new regime, the country could emerge as one of the largest beneficiaries accounting for 25 per cent of the total world carbon trade, says a recent World Bank report. The countries like US, Germany, Japan and China are apparent to be the biggest buyers of carbon credits which are near for India to a great extent. The Indian market is extremely receptive to Clean Development Mechanism (CDM). Having cornered more than half of the global total in tradable certified emission reduction (CERs), Indias dominance in carbon trading under the clean development mechanism (CDM) of the UN Convention on Climate Change (UNFCCC) is beginning to influence business dynamics in the country. India Inc pocketed Rs 1,500 crores in he year 2005 just by selling carbon credits to developed-country clients. Various projects would create up to 306 million tradable CERs. Analysts clai m if more companies absorb clean technologies, total CERs with India could touch 500 million. Of the 391 projects sanctioned, the UNFCCC has registered 114 from India, the highest for any country. Indias average annual CERs stand at 12.6% or 11.5 million. Hence, MSW dumping grounds can be a huge prospect for CDM projects in India. These types of projects would not only be beneficial for the Government bodies and stakeholders but also for general public.