A Synopsis
On
“Study of Carbon Credit Market in India (Gujarat)”
Submitted to:
Gujarat Technology University
In
Partial Fulfillment of the Requirements for the Ph.D. Programme
Guided By
Dr. Narayan Baser
Shri Jairambhai Patel Institute of Management and Computer Appli.,
Ghandhinagar.
Prof. Gregor Radonjič
University of Maribor, Faculty of Economics and Business
Prepared By:
Avani Shah (Reg.No: 8015; Enrollment No. 119997392004)
Shri Chimanbhai Patel Institute of Management and Research, Ahmedabad.
Table of Content
Sr.
No. Particulars
Page
No.
1 Introduction of the Study 1
2 Rationale of the study 2
3 Purpose of the Study 2
4 Objectives of the Study 2
5 Scope of the Study 3
6 Original contribution by the thesis 3
7 Literature Review 3
8 Research Methodology 5
9 Data Analysis and Results 8
10 Suggestions 13
11 Achievements with respect to objectives 13
12 Conclusion of the study 14
13 Limitations and future scope of the study 14
References
Research Title
“Study of Carbon Credit Market in India (Gujarat)”
Abstract
A renewed push for industrialisation will have to be balanced against further climate change.
India is the world’s third largest emitter of CO2, the chief greenhouse gas. April 2014 was the
first month in human history with an average CO2 level above 400 ppm. April 2015 recorded a
level of 403.26, nearly two points higher than the same month last year. The rising CO2 levels
have been linked by the UN’s intergovernmental panel on climate change (IPCC), in a 2014
report, to rising ocean and land temperatures as well as rising sea levels over the past 35 years.
This facts creates the need of the study of the topic. The study has focused on the variables
identified from literature review in Gujarat. As the energy sector (renewable/non-renewable) had
registered highest number of CDM project till 2012. The data has been collected in form of
semi-structured questionnaire from the employee of the energy organisations. The data is non-
parametric in nature so non-parametric test used such as kruskal-wallis test, chi-square tests and
mann-whitney U tests. From the data analysis, it has been identified that financial cost and
technology maintenance cost plays vital role. Global market condition is highly affecting CDM
market. The CDM project is also affecting the administrative function of the organisation. There
are very less organisation gone for carbon trading and those who opt for carbon trading
preferring forward contract for the financial security. Finally, the carbon emission market is
down that will affect the organisation for the registering CDM project.
1
1. Introduction of the study
((IPCC), 2007)Life on the earth is possible partly because some gases, such as carbon dioxide
(CO2) and water vapor, which naturally occur in the Earth's atmosphere. It tends to trap heat- like
a greenhouse does. It has been felt that the humans are greatly adding to the presence of such
gases, commonly referred to as greenhouse gases (GHGs), by burning fossil fuels and through
other industrial activities as well as various kind of land use, such as deforestation. The industrial
revolution in the mid-eighteenth century, the concentration of CO2 in the Earth’s atmosphere has
raised approximately 30%. The rate of growth for CO2 emissions continues to increase, with the
rate much higher for the ten year period of 1995-2004 compared to the previous 24 year period
of 1970-1994.
((UNFCCC), 2008) ((IISD),2009)On Wednesday 16 February 2005, some 8 years after the
world’s nations came together in Kyoto in Japan in 1997 to discuss global warming; the Kyoto
Protocol finally came into force. Although, the protocol is to combat six greenhouse gases
emission, which was negotiated in Kyoto, Japan in December 1997, during the third Conference
of Parties (COP) of UNFCCC (which was agreed at the Earth Summit at Rio-de-Janeiro in
1992). Kyoto Protocol has defined three mechanisms such as: Joint Implementation (JI), Clean
Development Mechanism (CDM) and International Emission Trading. All these mechanisms are
market-based. The first two are project based, whereas the third one allows the developed
countries to sell surplus emission of one country to another developed country. Amongst all,
Clean Development Mechanism is only applicable to India. India has potential opportunity in
terms of transfer of technology, investment, carbon trading, profits and most of all environmental
benefits.
((IISD), 2009) (ICAI, 2009) India signed the UNFCCC on 10 June 1992 and ratified it on 1
November 1993. Under the UNFCCC, developing countries such as India do not have binding
GHG mitigation commitments in recognition of their small contribution to the greenhouse
problem as well as low financial and technical capacities. The ministry of environment and forest
is the nodal agency for climate change issues in India. The National CDM Authority (NCDMA)
is a single window clearance for CDM projects in the country. Gujarat is the first state in India to
sign such a MoU with the World Bank. India is the leading country in the world with the second
2
rank in carbon emission reduction earning after China. China accounted for more than 55% of
total CER issued under UNFCCC, where as 15% of total CER issued are of India. Gujarat is the
first state in the country accounted Rs.127, 021,481 CER issued till 2012 that 18% of the total
CER in India. In a country, the electrical energy consumption is an important parameter which
represents the economic growth of the country. According to a World Bank study (2009), India
can reduce its annual electricity usage by 183.5 billion Kilo Watt Hour (kWh) by investing 10
billion dollars in energy efficiency improvement measures. The Indian power sector is one of the
most diversified in the world. Sources for power generation range from commercial sources such
as coal, lignite, natural gas, oil, hydro and nuclear power to other viable non-conventional
sources such as wind, solar, and agriculture and domestic waste.
2. Rationale of the study
For delay time of global warming, every country starts their efforts. Though carbon credit has
been emerged as one of the strategy to delay the global warming, but the organization which has
implemented this concept are very low in number. The Kyoto Protocol has not been
implemented but it has impact on micro as well as macro level of the economy. Still in India,
there are very less participants because of unidentified parameters which leads to study the
concept and analyse the parameters.
3. Purpose of the Study
This study aims to have in-depth knowledge about the concept called Kyoto Protocol (KP). The
study examined the aspects considered for the CDM projects, barriers as well as factors affecting
CDM projects. On the other hand, the study focused on the impact of CDM project on
organisation of energy sector of Gujarat. Energy sector is considered to be highest registered
CDM projects (2219 number of projects) up to 2012. Hence, this study aims to contribute to
existing knowledge by testing the hypothetical association between selected
criteria of CDM projects among different classification of project as well as organisations.
4. Objectives of the Study
To review the global Carbon Credit Market.
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To assimilate the various technologies adopted by organisations and baselines, factors and
risk level associated with the different registered CDM projects of energy sector
organisations in Gujarat.
To examine the barriers faced by selected organisations and the impact of CDM project for
running the carbon credit project.
To explore the future potential of carbon credit market in Gujarat and India.
5. Scope of the Study
The scope of the study refers to the parameters under which the study will be operating. Think of
the scope as the domain of your research what’s in the domain, and what is not. The scope of the
study is energy sector organisations that have registered their project for carbon emission
reduction (CER) and implement in Gujarat up to 2012 (Kyoto Protocol Phase I) under NCDMA.
The study is focuses on the large scale projects of energy sector organisation in Gujarat.
6. Original contribution by the thesis
Carbon emission is the first step taken to reduce the global warming. The research focused on
companies in Gujarat region which are present in energy sector and tries to find the major
parameters considered by the company for CDM project. This will contributes to the society
where the contemporary issue has been focused which will help the society for better
understanding of the concept and decide the new strategy for reduce the global warming. The
governing bodies also get some facts that help them for designing future strategies which helps
the organisations for better understanding of concept and important criteria needs to be focus.
7. Literature Review
Global Warming and Kyoto Protocol
(Stavins, 2008) (Ans Kolk, 2009) emphasised on structured policy to reduce the emissions of
carbon dioxide and other greenhouse gases, majority of the previous researches were focused on
the western countries. With reference to the emerging issue – global warming, majority of the
country across the globe have started showing their serious concern for this issue, and need has
4
been raised to form a structured policy to have fair distribution of emission allowances which
also exert positive impact on the economy of the country. (Wara, 2008) stipulates that Global
warming is one of the most difficult and important environmental challenges facing the
international community. To address a global environment problem with market based
mechanism, Global market has done their first attempt called the Clean Development
Mechanism (CDM) of the Kyoto Protocol. (Paula Castro, 2007) (Das, 2008) covered the
international climate policy has developed in a series of international agreements over the last 15
years. The original treaty, the United Nations Framework Convention on Climate Change
(UNFCCC) was signed in 1992. Since it entered into force in 1994, the Parties to the Convention
meet annually at COP. In the framework of the Kyoto Protocol negotiated in Kyoto in 1997, the
industrialized countries - also known as Annex B countries as they are listed in Annex B of the
Kyoto Protocol Phase I - finally adopted legally binding quantitative constraints, in which they
agreed to reduce greenhouse gas emissions by 5.2 per cent below which is their 1990 level on
average over a first commitment period of 2008-2012.
o Carbon Emission market of India and Gujarat
(Olsen, 2007) focused on the clean development mechanism for contributing to the development
of economy. The Clean Development Mechanism is part of the global carbon market developing
rapidly as part of the Kyoto response towards the mitigation of global warming. (Volker Krey,
2009) (Martin Nicholson, 2011) emphases on the delay participation and technology failure,
these two factors affect the greenhouse gases emissions in 21st century. The research paper
distinguish between “first-best scenarios” with full participation, and “second-best scenarios”
with delayed participation of Brazil, China, India, and Russia in 2030. (Vinay Deodhar,
September 2003)(CDM Basics, 2009) covered the financial structure for CDM projects in India.
To meet the emission reduction requirement through purchase of carbon credit from projects in
developing countries. To encourage private sector for project development capacity, there should
be transparent and effective rules at central and state level. CDM funds and CDM bonds become
attractive to reduce the credit risks and political risk. (K. Umamaheswaran, 2006) (H. Pathak · N.
Jain · A. Bhatia, 2009) stipulates to assess additionality and sustainable development issues of
energy efficiency CDM projects with an emphasis on the situation in India. (Shah, 2011) (Ajay
5
Bharti, 2011) covered the possibility of exclusive use of renewable energy for electricity required
by the municipality for pumping, lighting and municipality buildings and municipal solid waste
management. This can be one of the first initiatives of the state for climate change mitigation.
o Research gap
The past studies focusing on different economy comparison in the context of carbon emission
market. This literature has also covered the model development that helps the industry as well as
economy for implementation of Kyoto protocol concept. The literature reviewed covered
secondary data analysis and conceptual research articles. Literature revealed absence of primary
data from industry related to CDM project registration and implementation. These research gaps
have been identified and addressed through this study.
8. Research Methodology
o Overview of the Study
The first phase is to conduct a literature review to study the concept in detail and identify the
scenario in India as well as Gujarat. A thorough literature review produced no previous studies
that investigated the projects which already registered by the energy sector organizations. The
second phase is to incorporate to identify and development of instrument. This step involves
developing a questionnaire which includes all the aspects identify from the literature review. The
third phase is to conduct a pilot study designed to confirm the reliability and validity of the
measurement instruments. The final phase is the primary research study. The primary research
study involves collecting data, conducting analysis for each of the instruments utilized and study
the relationships between model variables.
o Variables Defined
In the literature review, a set of constructs consisting of aspects considered by the organisation,
factors and barriers need to be considered for CDM project, the risk level association, impact of
CDM project, carbon trading and corporate social responsibility are identified as traits, which
potentially influence the development of CDM Project.
Sr. No. Variables Retrieved from
1. Aspects considered for CDM project CDM website, ‘CDM Project Cycle’:
6
http://cdm.unfccc.int/Projects/diagram.html
accessed Sept.,2013
2. Factors affecting CDM project www.paryavaranmitra.org.in
3. Barriers faced by organisation for
CDM project
www.paryavaranmitra.org.in
4. Risk associated with CDM project Clean Development Mechanism and Carbon
Credits, ICAI, April,2009
5. Impact of CDM project www.cdmindia.gov.in
6. Carbon Financing Clean Development Mechanism and Carbon
Credits, ICAI, April,2009
7. Carbon Trading www.unfccc.int
o Research Hypotheses
H1: There is a significant difference between factors affecting the CDM project and time span of
the project/ public & private sector organisations/ technology adopted for CDM project.
H2: There is a significant difference between barriers affecting CDM project and time span of
the CDM project/ type of organisations based on investment/number of employees/public &
private sector organisations/technology adopted for CDM project.
H3: There is a significant difference between aspects considered for the CDM project and
number of years serves in the industry/ type of energy sector organisation based on
investment/public & private organisation/technology adopted for CDM project.
H4: There is a significant difference for carbon trading among different type of organisation
based on no of years serve in industry/ type of organisation based on investment/public & private
organisation/ technology adopted for CDM project.
H5: There is a significant difference between impact of CDM project on organisation and
number of registered project/number of employees/number of years serves in industry/public &
private organisation/ technology adopted for CDM project.
7
H6: There is a significant association between risk associated with the CDM projects and time
span of the CDM project/ public & private energy sector organisations/ technology adopted for
CDM project.
H7: There is a significant association between deployment of corporate social responsibility and
number of years serves in industry/public & private organisations/ technology adopted for CDM
project.
H8: There is a significant difference between number of registered CDM projects among public
& private organisations/ technology adopted for CDM project.
H9: There is a significant difference between estimated CER p.a. among public & private
organisations/ technology adopted for CDM project /carbon trading.
Research Methodology
o Research design: The research uses descriptive research design to study the nature and
facts of variables listed above and carbon credit.
o Sample design: Non-probability convenience sampling used for sample design.
o Target population: The companies who had registered CDM project under NCDMA in
Kyoto protocol phase I (till 2012) in Gujarat.
o Target group: In Gujarat, there are 33 organisations from energy sector who has registered
large scale CDM projects till 2012 under NCDMA.
o Sample size: 22 organisations from Gujarat.
o Data Collection
The present study incorporates collection of both primary and secondary data for an in depth
study. Several top management employees from energy sector organisations were approached for
data collection through phone calls and E-mail and based on their convenience the data has been
collected through semi structured questionnaire. Secondary Data has been collected from
periodicals, journals, research papers, articles, magazines, newspapers, web-sites and other
reference material available from various sources.
8
9. Data Analysis and Results
Introduction
In the chapter on theoretical Framework, it was concluded that the study dealt with respondents
drawn from energy sector organization that had registered and implement CDM projects in
Gujarat in Kyoto Protocol phase I (2008-12). Responses from these organisations were solicited
to test the variables identified from literature review on organizations selected for study.
This chapter tests the reliability of the scales by using Cronbach alpha tests. . After applying
reliability test on the data collection instrument, the final data had been collected. Based on the
normality of the data set, the non-parametric test has been used for the data analysis. This is
followed by the testing of hypotheses by applying Kruskal-Wallis Test, Chi-Square Tests and
Mann-Whitney U Tests. Data also comprises of descriptive statistics. Standard Statistical
Package for Social Sciences version 20.0 software was used for analyzing the data.
Data analysis
Sr. No. Null Hypothesis Test Result
H1
There is a significant difference in factors affecting
the CDM Project for different time span of the
project.
Kruskal-Wallis Test
External Factors-0.018
Internal Factors- 0.550
External Factors - Null
Hypothesis rejected.
Internal Factors -Null
Hypothesis accepted.
H2
There is a significant difference in barriers affecting
the CDM Project for different time span of the
project.
Kruskal-Wallis Test
Sig.- 0.126 Null Hypothesis accepted.
H3
There is a significant difference in aspects
considered for the CDM Project among age of the
energy sector organisations.
Kruskal-Wallis Test
Sig. – 0.263
Null Hypothesis accepted
except Overestimation and
the Potential Error.
H4
There is a significant difference in aspects
considered for the CDM projects for different
classification of organisation based on investment.
Kruskal-Wallis Test
Sig. – 0.623 Null Hypothesis accepted.
H5
There is a significant difference in barriers faced by
the organisation among different classification of
organisations based on investment.
Kruskal-Wallis Test
Sig.- 0.472 Null Hypothesis accepted.
H6 There is a significant difference in barriers faced by Kruskal-Wallis Test Null Hypothesis accepted.
9
the organisation among number of employees of
energy sector organisations.
Sig.- 0.540
H7
There is a significant difference in carbon trading
among different age of energy sector organisations.
Kruskal-Wallis Test
Sig.-0.117 Null Hypothesis accepted.
H8
There is a significant difference in carbon trading
among classification of organisation based on
investment.
Kruskal-Wallis Test
Sig.- 0.195 Null Hypothesis accepted.
H9
Impact of CDM Projects does differ significantly
with number of registered CDM projects by energy
sector organisation.
Kruskal-Wallis Test
Sig. – 0.192 Null Hypothesis accepted.
H10
Impact of CDM Projects does differ significantly on
various parameters of energy sector organization
with respect to number of employees.
Kruskal-Wallis Test
Sig.- 0.396
Null Hypothesis accepted
except administrative part.
H11
Impact of CDM Projects does differ significantly of
energy sector organisation with respect to age of
them.
Kruskal-Wallis Test
Sig. – 0.568 Null Hypothesis accepted.
H12
Time span of the project and risk associated with the
registered CDM project are dependent.
Chi-Square
Sig.- 0.048 Null Hypothesis rejected.
H13
Deployment of CSR and age of the energy sector
organisations are dependent.
Chi-Square
Sig.- 0.185 Null Hypothesis accepted.
H14
Energy sector organisations gone for carbon trading
and number of registered CDM project are
dependent.
Chi-Square
Sig.- 0.570 Null Hypothesis accepted.
H15
Energy sector organisations gone for carbon trading
and estimated carbon emission reduction p.a. are
dependent.
Chi-Square
Sig.-0.219 Null Hypothesis accepted.
H16
Energy sector organisations gone for carbon trading
and ownership structure of organisations are
dependent.
Chi-square Test
Sig.-0.910 Null Hypothesis accepted.
H17
Estimated CER p.a. by energy sector organisation
and technology adopted for CDM Project are
dependent.
Chi-square Test
Sig.-0.043 Null Hypothesis rejected.
H18
Impact of CDM Projects does differ significantly
with respect to ownership structure of energy sector
organisations.
Mann-Whitney U Test
Sig. – 0.902 Null Hypothesis accepted.
10
H19
Aspects considered for CDM project does differ
significantly with respect to ownership structure of
energy sector organisation.
Mann-Whitney U Test
Sig.- 0.538 Null Hypothesis accepted.
H20
Barriers faced by the organisation does differ
significantly with the ownership structure of energy
sector organisations.
Mann-Whitney U Test
Sig. – 0.774 Null Hypothesis accepted.
H21
Factors affecting registered CDM project does differ
significantly with the ownership structure of energy
sector organisations.
Mann-Whitney U Test
External factors- 0.195
Internal factors- 0.042
Null Hypothesis accepted
except internal factor that is
Finance.
H22
Risk associated with registered CDM Projects does
differ significantly with the ownership structure of
energy sector organisations.
Mann-Whitney U Test
Sig. – 0.118
Null Hypothesis accepted
except supply risk and
operational risk.
H23
Deployment of Corporate Social Responsibility
through CDM Project does differ significantly with
the ownership structure of energy sector
organisations.
Mann-Whitney U Test
Sig.-0.309 Null Hypothesis accepted
H24
There is a significant difference in number of
registered CDM projects among Public/Private
organisations.
Mann-Whitney U Test
Sig.-0.583 Null Hypothesis accepted
H25
Impact of CDM Project on energy sector
organisations does differ significantly with the
technology adopted for the CDM projects.
Mann-Whitney U Test
Sig. – 0.243
Null Hypothesis accepted
except Finance.
H26
Aspects considered for the CDM Project by
organisations does differ significantly with the
technology adopted for the CDM Projects.
Mann-Whitney U Test
Sig. – 0.076
Null Hypothesis accepted
except technology, finance
and physibility
H27
Barrier faced by the energy sector organisation does
differ significantly with the technology adopted for
the CDM Projects.
Mann-Whitney U Test
Sig.-0.748 Null Hypothesis accepted
H28
Factor affecting the registered CDM projects does
differ significantly with the technology adopted for
the CDM Projects by organisations.
Mann-Whitney U Test
External factors- 0.438
Internal factors- 0.217
Null Hypothesis accepted
H29
Risk associated with Registered CDM Project does
differ significantly with the technology adopted by
energy sector organisations.
Mann-Whitney U Test
Sig.-0.847 Null Hypothesis accepted
11
H30
Deployment of CSR through CDM project does
differ significantly with the technology adopted by
the energy sector organisations.
Mann-Whitney U Test
Sig.-0.280 Null Hypothesis accepted
H31
There is a significant difference in number of
registered CDM Projects for different technology
adopted by energy sector organisations.
Mann-Whitney U Test
Sig.-0.698 Null Hypothesis accepted
H32
Carbon Trading does differ significantly with the
technology adopted by the energy sector
organisations.
Mann-Whitney U Test
Sig.-0.350 Null Hypothesis accepted
H33
Estimated Carbon Emission Reduction p.a. does
differ significantly with the ownership structure of
energy sector organisations.
Mann-Whitney U Test
Sig.-0.924 Null Hypothesis accepted
H34 There is a significant difference for Estimated CER
p.a. and organisation gone for Carbon Trading.
Mann-Whitney U Test
Sig.- 0.139 Null Hypothesis accepted.
Summary of results
o Barrier Analysis
Barriers analysis addresses the barriers faced by the CDM project. Out of all the barriers,
financial barriers (14org.), technological (7 org.) and institutional (6 org.) barriers are most
critical one. For the ease of study independent variables have been classified as organisation
based on investment, number of employees, ownership structure of organisations (public/private)
and technology adopted for CDM project and compared with barriers faced by organisation. The
value of sigma shows that there is no difference among all the independent variables. Thus it can
be interpreted that barriers faced by energy sector organisations are independent.
o Factors affecting CDM Projects
Two major factors “Global market condition and monitoring cost” were shown as highly
affecting the CDM project. Non-parametric test were used to check the difference among the
independent variables and factors affecting CDM projects. The result exhibited that there is
difference for external factors (global market, political changes and trade relations) with sig.
0.018 among different time span of the CDM project. Factors affecting registered CDM projects
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do not differ with the ownership structure of energy sector organisations / technology adopted for
CDM project except financial factor (sig. 0.034).
o Risk involved in CDM project
The risk associated with CDM projects are categorized into major five heads such as: registration
risk, performance risk, counter party risk, market risk and country risk (ICAI report, 2009). From
the study, it can be identified that financial risk, time over-run risk and operation risk are also
associated with CDM project. The statistical analysis shows that time span of the project and risk
associated with the registered CDM project are dependent (sig. 0.048). Capital cost over-run risk
(sig. 0.045) has difference with the time span of the CDM projects. Supply risk (sig. 0.013) and
operational risk (sig. 0.046) has difference with the ownership structure of organisations.
o Aspects considered for CDM project
The CDM project should meet prescribed criteria for registration as per NCDMA broadly named
as: additionality, sustainable development indicators and baselines. From the result, it can be
interpreted that there is no difference for aspects considered by the organisations for the CDM
project among all the independent variables such as age of organisations, classification of
organisations based on investment and ownership structure of organisations (public/private)
except certain criteria’s that are financial additionality (additionality), environmental well-being
and technological well-being (Sustainable development indicators), and overestimation and the
potential error (baselines).
o Impact of CDM project
The output of the data reveals that impact of CDM projects does not differ with total number of
registered projects, the age of energy sector organizations, ownership structure of energy sector
organisations, and the technology adopted for the CDM projects except for finance. However
significant difference was found for the impact of CDM project on energy sector organisation
among administrative employees exhibited by sigma value of 0.039.
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o Carbon Trading
The energy sector organisations registered their project but majority of the organisations does not
prefer to go for carbon trading because they are having contract with the foreign party. Out of all
sample studied, six organisations had gone for carbon trading and most of the organisations
prefer forward contract. From the data, it has been identified that organisations indulging in
carbon trading is independent from the organisations category, type of organisation based on
investment, estimated carbon emission reduction p.a., ownership structure of energy
organisations, number of registered CDM project and technology adopted for CDM project.
o Corporate Social Responsibility
Research shows that majority of the organisation used carbon credit as a tool for CSR.
Deployment of corporate social responsibility (CSR) through registered CDM project and age of
the organisations are independent. Deployment of corporate social responsibility through CDM
project does not differ with the ownership structure of organisations as well as technology
adopted by the organisations.
10. Suggestions
Various parameters affecting CDM projects were studied. Analysis revealed that majority
organisation used two renewable sources: wind and solar, so still there are opportunity exist to
use other renewable sources. In Gujarat biogas is highly used source. India has potential to
generate more carbon credit. Government has to generate more source of carbon financing that
will help the organisation for better implementation of the CDM project.
11. Achievements with respect to objectives
The research objective is to analyse the parameters identified from literature and its relationship
between energy organisation and CDM project profile. The study identified widely used
technology adopted for CDM project, and major aspects in perspective of organisation. The
study has also derived major risk associated with CDM projects, factors and barriers faced by the
organisation and the impact of CDM project on organisations.
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12. Conclusion of the study
The current study deals with the energy sector organisations that had registered CDM project in
Gujarat till 2012. The data focused on the various parameters relating to CDM Project, factors
affecting CDM Project, barriers faced by organisation for CDM project, risk involved in CDM
Project, impact of CDM Project on organisations, carbon trading, corporate social responsibility
and carbon financing.
There is various renewable energy sources used for the CDM Projects. The data shows that solar
and winds are the major used technology by the energy sector organisation for CDM projects in
Gujarat. This study highlighted that all the aspects are considered by the energy organisations.
CDM Projects needs to be eco-friendly, generate employment opportunity taking into
consideration feasibility aspect. The findings further revealed that external as well as internal
factor affects the CDM Project. Out of all the factors, global market condition and monitoring
cost of the CDM projects were found most critical one. Out of all the risk associated with
project, capital cost over-run risk, operational risk and supply risk were found to be influencing
the CDM projects. CDM project also had impact on organisations functions. Finance,
stakeholder and management areas are most affected functions in organisation by CDM projects.
With perspective of no. of employees, only administrative function was analysed as being
affected. Data analysis also revealed that organisations which had gone for carbon trading mostly
prefer forward contract because of carbon pricing fluctuations. The study revealed that carbon
credit plays a positive role for the deployment of CSR. Majority of the energy organisations were
seen registered with single project. Further discussion revealed that very less organisation wished
to register other projects. This will affect the future of the Kyoto Protocol Phase II.
13. Limitations and Future scope of the study
The study focused primarily on large scale CDM projects in energy industry only in Gujarat. The
research can be extended by covering all the CDM projects of Gujarat and further inter industry
comparison. The future research will be done on Cross-national comparison with economic
indicators relating to carbon credit. Kyoto Protocol phase II started after 2012 Carbon credit
pricing is always unpredictable so further in-depth analysis of the pricing of Carbon Credit
would be explored.
15
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Websites
www.unfccc.in
www.cdmindia.gov.in