The document discusses two key points from climate change studies: 1) Earth's capacity to absorb carbon is finite and depletable, and growth in greenhouse gas (GHG) emissions poses a threat to humankind. 2) A country's per capita GHG emission is strongly correlated with its economic prosperity. Without increases in GHG emissions or access to alternative technologies, countries would not be able to pursue socio-economic goals. The Kyoto Protocol is a global cooperative attempt to address both these issues.

1. C SQUARE
RL JUNE 2009

2. CLIMATE CHANGE STUDIES UNDERSCORED TWO POINTS
FIRSTLY
SECONDLY
EARTH’S CARBON ABSORBING CAPACITY IS FINITE
AND DEPLETABLE
PER CAPITA GHG EMISSION
AND IS STRONGLY CORRELATED TO
ECONOMIC PROSPERITY
GROWTH OF GHG EMISSIONS POSE A THREAT TO
HUMANKIND
Without increase in GHG emissions or access to appropriate
alternative technology options,countries would not be able to
pursue socio-economic goals. Kyoto Protocol a global
cooperative attempt to address both these issues
RL JUNE 2009

3. LIST
OF
COUNTRIES
ANNEX I OF UNFCCC
AUSTRALIA [NOT RATIFIED] LIECHTENSTEIN
AUSTRIA LITHUANIA
BELGIUM LUXEMBOURG
BULGARIA MONACO
CANADA NETHERLANDS
CROATIA NEW ZEALAND
CRECH REPUBLIC NORWAY
DENMARK POLAND
ESTONIA PORTUGAL
EUROPEAN COMMUNITY ROMANIA
FINLAND RUSSIAN FEDERATION
FRANCE SLOVAKIA
GERMANY SLOVENIA
GREECE SPAIN
HUNGARY SWEDEN
ICELAND SWITZERLAND
IRELAND UKRAINE
ITALY UNITED KINGDOM
JAPAN UNITED STATES OF AMERICA [NOT RATIFIED]
LATVIA
RL JUNE 2009

4. N O N -A N N E X I O F U N F C C C
AFGHANISTAN ALBANIA KAZAKHSTAN KENYA THAILAND TIMOR-LESTE
ALGERIA ANGOLA KIRIBATI KUWAIT TOGO TONGA
ANTIGUA AND BARBUDA ARGENTINA
KYRGYSTAN LAO PEOPLE’S DEMOCRATIC REPUBLIC TRINIDAD AND TOBAGO TUNISIA
ARMENIA AZERBAIJAN
BAHAMAS BAHRAIN LEBANON LESOTHO TURKMENISTAN TUVALU
BANGLADESH BARBADOS LIBERIA LIBYAN ARAB JAMAHIRIYA UGANDA UNITED ARAB EMIRATES
BELIZE BENIN
MADAGASCAR MALAWI UNITED REPUBLIC OF TANZANIA URUGUAY
BHUTAN BOLIVIA
BOSNIA AND HERZEGOVINA BOTSWANA MALAYSIA MALDIVES UZBEKISTAN VANUATU
BRAZIL BURKINA FASO MALI MALTA VENEZUELA VIET NAM
BURUNDI CAMBODIA
MARSHALL ISLANDS MAURITIUS YEMEN ZAMBIA
CAMEROON CAPE VERDE
MEXICO MICRONESIA ZIMBABWE
CENTRAL AFRICAN REPUBLIC CHAD
MONGOLIA MONTENEGRO
CHILE CHINA
COLOMBIA COMOROS MOROCCO MOZAMBIQUE
CONGO COOK ISLANDS MYANMAR NAMIBIA
COSTA RICA CUBA NAURU NEPAL
CYPRUS COTE D’LVOIRE NICARAGUA NIGER
DEMOCRATIC PEOPLE’S REPUBLIC DEMOCRATIC REPLUBLIC OF THE NIGERIA NIUE
OF KOREA CONGO
OMAN PAKISTAN
DIJIBOUTI DOMINICA
PALAU PANAMA
DOMINICAN REPLUBLIC ECUADOR
PAPUSA NEW GUINEA PARAGUAY
EGYPT EI SALVADOR
PERU PHILIPPINES
EQUATORIAL GUNIEA ERITREA
QUATAR REPUBLIC OF KOREA
ETHIOPIA FIJI
REPLUBLIC OF MOLDOVA RWANDA
THE FORMER YUGOSLAV REPLUBLIC GABON
OF MACEDONIA SAINT KITTS AND NEVIS SAINT LUCIA
SAINT VINCENT AND THE GRENADINES SAMOA
GAMBIA GEORGIA
SAN MARINO SAO TOME AND PRINCIPLE
SAUDI ARABIA SENEGAL
GHANA GRENADA
SERBIA SEYCHELLES
GUATEMALA GUINEA
SIERRA LEONE SINGAPORE
GUINEA-BISSAU GUYANA
SOLOMON ISLANDS SOUTH AFRICA
HAITI HONDURAS
SRI LANKA SUDAN
INDIA INDONESIA
SURINAME SWAZILAND
IRAN ISRAEL
SYRIAN ARAB REPUBLIC TAJIKISTAN
JAMAICA JORDAN RL JUNE 2009
TRINIDAD AND TOBAGO TUNISIA
TURKMENISTAN TUVALU
UGANDA UNITED ARAB EMIRATES

5. FLOW CHART
CLEAN DEVELOPMENT
MECHANISM PROJECTS { CDM }
PROJECT IDEA NOTE [PIN]
PROJECT DEVELOPMENT DOCUMENT [PDD]
DESIGNATED NATIONAL AUTHORITY [DNA]
DESIGNATED OPERATIONAL ENTITY [DOE]
PROJECT PARTICIPANT [PP]
EMISSION REDUCTION PURCHASE AGREEMENT [ERPA]
EXECUTIVE BOARD [EB]
CERTIFIED EMISSION REDUCTIONS [CER]
RL JUNE 2009

6. LIST OF
INDICATIVE PROJECTS
IN
INDIA
GENERAL
1. Renewable Energy Projects (Wind Power, Solar, Biomass, Hydel)
2.Fuel Switching (from fossil fuel to green fuel like biomass, rice husk, etc.)
3.Cogeneration in industries having both steam and power requirement
4.Energy Efficiency Measures (Boiler & Steam Efficiency, Efficient Cooling System,
Back Pressure Turbines, Installation of Variable Speed Drives, Pump& Pumping System, Improved Co-gen Efficiency)
5.Induction of new technologies in power sector
6.Waste Management (Capturing landfill methane emission to capture power,
Methane recovery from municipal solid wastes, biomethanation for power generation, Utilisation of waste and waste water
emissions for generation of energy)
7.
Transport (Fuel switch from gasoline/diesel to natural gas, Modal shift
from air to train, road to train at macro level, Replacement of shipment of certain raw material through roads to pipeline)
RL JUNE 2009

7. SPECIFIC PROJECTS
1] Energy & Power
(Generation, Transmission & Distribution)
1.
Renewable Energy like wind power project, biomass based project, solar power projects, small run of the river hydro electricity
generation projects.
2.
Refurbishment of existing power plants to achieve a heat rate which is amongst the top 20% of the heat rate of all power plants in the
relevant regional grid
3.
Fuel shift from cal to gas or liquid fuel to gas
4.
Super critical or ultra super critical technologies for power generation
5.
T&D loss reduction below CEA stipulated values through (HT line bifurcation, High Voltage Distribution System, etc.)
6.
Power Generation through Methane recovery from municipal solid waste/ biomethanation
7.
Replacement of SF6 containing equipment and destruction of SF6 etc.
RL JUNE 2009

8. 2] Cement
1.
General energy efficiency improvement initiatives
2.
Waste heat recovery from kiln fuel gas
3.
Raw mix modification to reduce process Co2 emissions
4.
Use of pozzolanas (fly ash/blast furnace slag) over and above the industry specifications
5. Fuel shift from coal to gas or to biomass or high calorific value wastes
6.Initiatives to reduce kiln volume through higher conversion in precalciners, etc.
3] Steel
1.
Coke dry quenching
2.
Blast Furnace top gas heat and pressure recovery
3.
Basic Oxygen Furnace gas waste heat recovery
4.
Coal dust, oxygen and tar injection in Blast Furnace to reduce the coke rate
5.
General energy efficiency improvement in rolling mill area
6.
Oxy Fuel use in reheating furnaces
7.
Corex Units
8.
Waste heat recovery from DRI/Midrex process for sponge iron manufacture
9. Romelt iron making technology
10. Hydrogen annealing etc.
RL JUNE 2009

9. 4] Pulp & Paper
1.
Energy efficiency improvements
2.
Biomass based cogeneration
3.
Continuous pulping, etc.
5] Fertilizer
1.
Reduction of N2O in nitric acid/other fertilizer manufacture
2.
Waste heat recovery
3.
General energy efficiency improvement
4.
Methane recovery and reuse
6] Coal Mining
1.
Coal bed methane capture and use for power generation
2.
Coal mine methane capture and use for power generation
7] Transport
1.
Fuel shift from liquid fuel to CNG/LPG
2.
Hybrid cars, electric cars and hydrogen fuel cells
3.
O&M improvement of existing vehicles, etc.
RL JUNE 2009

10. 8] Aluminium
1.
PFC reduction through reduction in anode effect duration and frequency
2.
Energy efficiency improvement in alumina refining, smelting and rolling
3. Heat recovery from bauxite digestion & bauxite digestion efficiency improvement
4. Dry scrubbing of smelter fumes, waste heat recovery, etc.
9] Chlor Alkali
1. Use of hydrogen to replace fossil fue
10] Agriculture
1. Land use change from rice cultivation to alternative crops/cropping pattern change
2.
Forestry and Afforestation
3. Biodiesel/Ethanol
11] Sugar
1.
Bagasse cogeneration plants
2.
Energy efficiency improvement
3. Ethanol (from molasses) as replacement for fossil fuels
12] Oil & Natural Gas
1.
◦ Methane/CNG leak reduction in T&D system
◦
Capture and use of natural gas which would otherwise have been flared
RL JUNE 2009

11. • Carbon credits are “Entitlement Certificates” issued by United Nations Framework Convention on Climate Change (UNFCCC) to implementers of
approved Clean Development Mechanism (CDM) projects.
• Potential buyers of carbon credits are corporates in Annexure I countries that need to meet compliance prevailing in their countries as per the
Kyoto Protocol or those investors who would like buy the credits and with the expectation of selling them at ahigher price during the KP phase
(2008-12).
• The extension of KP shall be ratified by the current signatories of KP in their future meetings essentially to curb GHG emissions into the
environment.
• Theoritically one carbon credit equivalent to one tonne of carbon dioxide or its equivalent greenhouse gas (GHG).
• Emissions trading (ET) is a mechanism that enables countries with legally binding emissions targets to buy and sell emissions allowances among
themselves.
• Futures contracts in carbon credits are actively traded in the European as well as Indian exchanges [NCDEX AND MCX].
• In fact, many companies actively participate in the futures market to manage the price risks associated with trading in carbon credits and other
related risks such as project risk, policy risk, etc.
• The major price influencing factors would be a] supply-demand mismatch, b]policy issues, 3]crudeoil prices,4] coal prices, 5]carbon dioxide
emissions, 6] weather/ fuel prices, 7]european union allowances {EUAs} prices, 8] foreign exchange fluctuations , 9] global economic growth.
• India one of the leading generators of CERs through CDM, has a large scope in emissions trading. Around 300 total CDM projects comprising
almost 1/3rd of the total CDM projects has been registered with the UNFCCC.Estimates of trading in carbon credits would touch US$ 100 billion
by 2010. The total issued CERs with India as a host country till now stand at 34,101,315 (around 34 million), 1/3rd of total CERs issued by the
UNFCCC.

12. CER
FUTURE
CONTRACT
ON NCDEX
CER Futures
Product Note
Exhibit 1 – CONTRACT SPECIFICATIONS OF CARBON CREDIT (CER) FUTURES (as on
February 02, 2009)
Futures Contract Specifications
Type of Contract Futures Contract Specifications for Certified Emission Reduction
Units (CERs)
Name of Commodity Certified Emission Reduction (CER) – Carbon Credits
Ticker symbol CERNCDEX
Trading System NCDEX Trading System
Basis Mumbai (NCDEX) - Exclusive of all Taxes, Levies and Duties
Unit of trading One lot of 500 CERs (Carbon Credits)
Delivery unit One lot of 500 CERs (carbon Credits)
Quotation/base value Rs. per CER
Tick size Rs. 0.20
CER Futures
Quality specification Certified Emission Reduction (CERs) is a unit pursuant to Article Product Note
12 and requirements there under, as well as the relevant
Launch Calendar:
provisions in the CDM modalities and procedures and is equal to
one metric tonne of carbon dioxide equivalent, calculated using
global warming potentials defined by decision 2/CP.3 or as Contract Launch Month Contract Expiry Month
subsequently revised in accordance with Article 5 of the Kyoto March 2009
Protocol or its successor agreements or decisions under United July 10, 2008 June 2009
Nations Framework Convention on Climate Change. September 2009
Quantity variation Up to +/- 250 CERs
Delivery center At notified delivery centre at MUMBAI
Hours of Trading As per directions of the Forward Markets Commission from time to
time. Currently,
Mondays through Fridays:
10:00 a.m. to 11:30 p.m.
10:00 a.m. to 11:55 p.m. (during US day light saving period)
Saturdays: 10:00 a.m. to 2:00 p.m.
The Exchange may vary the above timing with due notice
The contents of this product note are subject to Rules, Byelaws and Regulations of
NCDEX as in force from time to time and be read therewith.
-14-

13. CER
CONTRACT
ON MCX Contract Specifications of Carbon Credit – Certified Emission Reduction (CER)
EXCHANGE Symbol CER
Description CERMMMYY
Contracts available for trading
November 08 contract Immediately on receipt of the approval letter by the
Commission to 25th November 2008
February 09 contract Immediately on receipt of the approval letter by the
Commission to 25th Feb 2009
May 09 contract Immediately on receipt of the approval letter by the
Commission to 25th May 2009
August 09 contract Immediately on receipt of the approval letter by the
Commission to 25th August 2009
November 09 contract Immediately on receipt of the approval letter by the
Commission to 25th November 2009
Trading
Trading period Mondays through Saturdays
Trading session Monday to Friday: 10.00 a.m. to 11.30 p.m.
Saturday: 10.00 a.m. to 2.00 p.m.
Trading unit 250 tons of CER units
Quotation/Base Value Rs. per ton
Maximum order size 10,000 tons
Tick size (min price 50 paise per ton
movement)
Daily price limits The base price limit will be 4%. Whenever the base
daily price limit is breached, the relaxation will be
allowed upto the 6% without any cooling off period in
the trade. In case the daily price limit of 6% is also
breached, then after a cooling off period of 15
minutes, the daily price limit will be relaxed upto 9%)
In case of price movement in international markets
which is more than the maximum daily price limit
(currently 9%), the same may be further relaxed in
steps of 3% with the approval of FMC.
Initial margin 6%
Special margin In case of additional volatility, a special margin at such
percentage, as deemed fit, will be imposed
immediately on both buy and sale side in respect of all
outstanding position, which will remain in force for next
2 days, after which the special margin will be relaxed.
Maximum allowable open For individual clients: 5,000,000 tons
position For a member collectively for all clients: 25,000,000
tons or 15% of the market wide open position
whichever is higher
Delivery
Delivery unit 250 tons of CER units
Delivery Center Mumbai