CARBON CREDIT jmpcoc/EVS/unit III/Sem II/14-15 1

BACKGROUND • The burning of fossil fuels is a major source

of greenhouse gas emissions, especially for power, cement, steel, textile, fertilizer and many other industries which rely on fossil fuels (coal, electricity derived from coal, natural gas and oil). The major greenhouse gases emitted by these industries are carbon dioxide, methane, nitrous oxide, hydro-flurocarbons(HFCs), etc., all of which increase the atmosphere's ability to trap infrared energy and thus affect the climate.

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• The concept of carbon credits came into existence as a result of increasing awareness of the need for controlling emissions

• The IPCC (Intergovernmental Panel on Climate Change) has observed that:

• Policies that provide a real or implicit price of carbon could create incentives for producers and consumers to significantly invest in low-GHG products, technologies and processes. Such policies could include economic instruments, government funding and regulation,

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DEFINITION • A carbon credit is a generic term for any tradable certificate or

permit representing the right to emit one ton of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent to one ton of carbon dioxide.

• Carbon credits and carbon markets are a component of national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs). One carbon credit is equal to one metric ton of carbon dioxide, or in some markets, carbon dioxide equivalent gases.

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• The mechanism was formalized in the KYOTO PROTOCOL, an international agreement between more than 170 countries, and the market mechanisms were agreed through the subsequent Marrakesh Accords. The mechanism adopted was similar to the successful US Acid Rain Programme to reduce some industrial pollutants.

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KYOTO PROTOCOL

In 1990 the Inter Governmental Panel On Climate Change (IPCC) reported about the Global Warming- a serious cause for concern.

In 1997 a protocol ( TREATY) was adopted to reduce the Greenhouse Gases by specific percentage of the 1990s level.

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MARRAKESH ACCORDS • MARRAKESH ACCORDS ARE RULES

ADOPTED WITH INSTRUCTIONS REGARDING HOW TO IMPLEMENT THE KYOTO PROTOCOL.

• IT WAS DECIDED TO MONITOR ACTUAL EMISSION OF EACH COUNTRIES BY MAINTAINING RECORD LIKE ‘BANK ACCOUNT’.

• KEEP EVERY RECORD OF EMISSIONS AND MEASURES TAKEN TO REDUCE EMISSIONS.

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WHAT IS CARBON CREDIT UNDERKOYOTO PROTOCOL

A credit for reducing 1 ton of CO2 from the atmosphere

Developed Country A needs CC

Developed Country B earns CC i.e. Assigned Amounts Units(AAU)

Sell CC

Payment for CC

EMISSION TRADING jmpcoc/EVS/unit III/Sem II/14-15

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Developed Country A needs CC

Developed Country B earns CC called Emission Reduction Units

Sell CC

Sets a Project

JOINT IMPLEMENTATION

Developed Country A needs CC

Developing Country B earns CC called Certified Emission Reduction

Sets a Project

Sell CC

CLEAN DEVELOPMENT MECHANISM jmpcoc/EVS/unit III/Sem II/14-15

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AT PRESENT 1 CARBON CREDIT = 10-15 EURO

INDIA HAS GENERATED 30 MILLION CARBON CREDITS AND 140 MILLION IS IN THE PIPELINES.

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Caption or statement here

CO2 EMISSION IN MMT    2010  2011  2012 

CANADA  541.459 551.587 550.829 USA  5,630.02 5,483.21 5,270.42

BRAZIL  490.059 476.6 500.228 GERMANY  801.363 784.378 788.321

UK  528.893 488.31 498.87 INDIA  1,714.73 1,752.68 1,830.94

JAPAN  1,180.58 1,200.27 1,259.06 INDONESIA  414.549 450.077 456.21

CHINA  7,446.52 8,126.69 8,547.74 FRANCE  385.727 374.324 364.538 WORLD  31,059.46 32,154.99 32,723.21

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0

5000

10000

15000

20000

25000

30000

35000

210120112012

CARBONDIOXIDE EMISSION in MMT 

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