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By: DIVINE KAUR

CARBON CREDIT


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Birth of CarbonCredit

Concept ofCarbon Credit

Growth of CarbonCredit & IndiasPosition

Concern forChartered

Accountants


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The Major Concern

GLOBAL WARMING


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Green house gases leading toGlobal Warming

CO2 Methane Nitrous Oxide Hydroflourocarbon Sulphur Hexaflouride Perflourocarbon CO2t-e

one tonne ofCO2 equivalent


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Birth of UNFCCCIn 1992, Rio

Brazil

ObjectiveGreen House Gases should be stabilizedwithin a time frame.


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The KYOTOPROTOCOL

An agreement signed in December1997 in Kyoto, Japan


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KYOTO PROTOCOL

Annexure1

NonAnnexure 1

Developed Developin

gUnder

developed


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The Kyoto ProtocolObjective

Reduction of Green House Gasesemission by developed countries

in theThe First Commitment Period(2008-2012)


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WHY

DID YOU KNOW????


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Birth ofCarbon Credit




Accountants


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What is Carbon Credit under theKYOTO Protocol

A credit for reducing 1 ton ofCO2 (Green House Gases) from theatmosphere


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How to generateCarbon Credits???

CARBON CREDITS


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CO2

METHANE

CO2EARN

CARBON

CREDIT

METHANE


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USE OFCARBON CREDITS IN

EMISSION REDUCTION


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REDUCTION

NATIONAL

MEASURES

ADDITIONAL

MEASURES

THEFLEXIBILITYMECHANISM


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CleandevelopmentMechanism

Joint

implementation

Emissiontrading

FLEXIBILITYMECHANISM

Projectbased


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Emission Trading

Developedcountry A(needs CC)

Developedcountry B

Earns carbon creditscalled

Assigned AmountUnits

Sell thesecarbon credits

Payment

for CC


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Joint Implementation

Developedcountry A

(needs CC)Developedcountry B

Sets a project

Earns carboncredits calledEmission

Reduction UnitsSell carbon

credits


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Clean Development Mechanism (CDM)

Developedcountry(needs CC)

Developing Country

Earns carbon

credits calledCertifiedEmission

Reduction

Sells carbon credits

Sets a project


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Concept of VERsCountries not

committed to theprotocol

Voluntary EmissionReduction

ORVerified Emission

reduction

VER


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What should be the price ofcarbon????

At present, price of 1 carbon credit is10 Euro to 15 Euro


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Accountants



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Market for Carbon TradingCurrently there are 5 EnvironmentalExchanges, trading in Carbon Credits

POWER NEXT

EUROPEAN CLIMATE

EXCHANGE


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Indias Stance in Carbon Credits


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India along with China, lead countries in earningCarbon Credit


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India pocketed Rs 1,500crores in the year 2005just by selling carboncredits to developed-country clients.

India has generated 30 millionCarbon credits & 140 millionare in pipeline


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Some of the Leading companies of Indiausing & selling Carbon Credits

GUJARAT FLOUROCARBONS


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SRF.The major beneficiary of

reducing GHG gases


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Accountants



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Concern forTheCharteredAccountants.


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ACCOUNTING TREATMENT


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Treatmentunder IFRS

Treatmentunder USGAAPS

Treatmentunder AS

IAS 20(Governmen

t grants)

currently noguidance note

available

currentlyno

accountingstandardavailable

Present Accountingtreatment..


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Tax TreatmentsWill there be any tax onCarbon Credits ??????

f there is incomethere will be tax


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TAX TREATMENT

INDIRECT TAXIRECT TAXIncome from

CERs

OtherIncome

BusinessIncome

GoodsService

s

VAT, etc ServicetaxOR

CER TransactionTax


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However, NO setAccounting or Tax

Treatment has yet beendecided


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Scope forChartered Accountants


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Other opportunities..As an auditor.

In audit of Carbon Trading

As a Carbon TradingConsultant

Carbon TradingBroker


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Accountants



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What after 2012 End of CommitmentPeriod???

THE COPENHAGENCONFERENCE

NOTSUCCESSFUL


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Thank You

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