| Governments
around the world agreed during the 1992 Rio Earth Summit on a United Nations Framework
Convention on Climate Change (UNFCCC). India is also a party to the convention
as it signed this multilateral treaty on 10 June 1992 and was the 38th country
to ratify the Convention on 1st November 1993. Being a non-Annex-I Party, India
is not required to adopt any greenhouse gases (GHGs) reduction targets but is
required to take steps contained in Article 4.1 of the Convention to demonstrate
India's commitment to climate change mitigation. Kyoto Protocol was adopted during
COP-3 in Dec 1997, which enjoins upon the developed country parties to reduce
their GHG emissions by a global average of 5.2% below the 1990 levels during 2008-12
which India acceded in August 2002 and come into force from 16th February, 2005.
Clean
Development Mechanism The Kyoto
Protocol has brought out three mechanisms for GHG emission abatement. They are: 1)
Joint Implementation (JI) (It allows countries
to claim credit for emission reduction that arise form investment in other industrialized
countries, which result in a transfer of 'emission reduction units' between countries) 2)
Clean Development Mechanism (CDM) (Through
this, industrialized countries can finance mitigation projects in developing countries
contributing to their sustainable development) 3)
International Emissions Trading (IET) (It
permits countries to transfer part of their 'allowed emissions' - assigned amount
units) - All
these mechanisms are market-based. The first two are project based, where as the
third one allows the developed countries to sell surplus emission of one country
to another developed country.
- Clean Development
Mechanism (CDM) provides trading of Green House Gases (GHG) reductions that is
measured in terms of Certified Emission Reductions (CERs) where each CER is equal
to one metric tonne of Carbon dioxide equivalent (CO2e). Trading of CERs can take
place between those countries who have agreed emissions reductions targets under
UNFCCC (Annex-1 countries) and those who have not yet agreed to emission reductions
targets (Non Annex countries).
- Out of the 3 Kyoto
mechanisms, CDM is the only one meant for the developing world which encourages
cleaner development in developing countries and bring infusion of investments
and technologies in developing countries; which thus provides them an opportunity
to adopt cleaner technologies and be paid for emission reductions.
- CDM
undergoes through a project cycle involving 4 stages such as (1) Project Development
(2) Validation and Registration (3) Project Monitoring (4) Verification, Certification
and Issuance of Certified Emission Reductions (CERs).
FICCI
Norwegian Embassy Project Background FICCI
with assistance from Norwegian Embassy, New Delhi is presently implementing an
International project for promotion of CDM among Indian companies. FICCI will
provide the necessary technical consultancy through our trained professionals
for preparing Indian companies including sugar industry to obtain the benefit
of carbon trading. It is important to promote energy efficiency and renewable
energies in developing countries, with their great contribution to sustainable
development through realizing various socio-economic benefits and their large
potential of GHG emission reductions. FICCI,
the apex chamber body of the industry and being a not for profit organization,
will be providing these services on an extremely competitive basis. It will assist
Indian Companies in introducing new efficient technologies, making them more competitive
and at the same time, it will also protect environment. Objectives The
prime objectives of the project are: To create
awareness amongst Indian organizations about the benefits of CDM. To
handhold at least 5 potential companies from Project Design Document (PDD) to
actual carbon credit realisation and taking them from PDD to actual carbon credits
trading. There is a possibility of giving subsidy of up to 2 to 3 Lakhs to companies,
selected under this Project. To establish
a mechanism for carbon trading by Indian Companies Emerging
Markets A market for CERs is taking
shape. The EUs emission allowance trading directive came in to force n January
1st 2005 initializing the European Emission Trading System. This could create
a financial market worth EURO 2 billion in the short and over 10 billion in the
long term. One of the aims of this project is to make India a global leader in
carbon trading. At the global level, countries
around the world have expressed a firm commitment of strengthening international
mechanism for GHG mitigation. India has the potential to generate 250 million
carbon credits, which is worth about 1.5 billion USD. This potential could be
realized if India is able to develop capacity for undertaking CDM project. For
Futher details click on the link www.ficci-cdm.biz
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