1. Carbon Credit Trading Mechanism and Indian Scenario Presented By: Debasis Pan (10810019) Pankajkumar (10810041) Pravin Dwivedi (10810045)

2. Contents Introduction Kyoto protocol (KP) KP Mechanisms Price Determinants of Carbon Indian Scenario CDM Market in India

3. Climate Change

4. Total CO2 Emissions - 1990 and 2005

5. UN Framework Convention on Climate Change 165 nations signed the 1992 United Nations Framework Convention on Climate Change (UNFCCC) at Rio de Janeiro The Convention divides countries into two main groups - Annex I & Non-Annex I Countries Annex I (developed countries) agreed to reduce their GHGs by 5.2 % below 1990 levels in 1st commitment period 2008 – 2012

6. UNFCCC continues.. Convention is based on three principles – Common but differentiated responsibility – Precautionary approach – Sustainable Economic Growth and Development The Kyoto protocol defined how to bring down the emissions in COP 3 in 1997 COP-conference of the parties

7. Kyoto Protocol Negotiated in Kyoto, Japan in December 1997, Opened for signature on March 16, 1998, Came into force on February 16, 2005, Binding 'industrialized’ or 'developed’ countries, listed in Annex 1 of the UNFCCC Commits developed countries to specific targets for reducing their green house emissions Each country has a prescribed number of 'emission units' which make up the target emission units The Kyoto Protocol provides mechanisms for countries to meet their emission targets

8. Copenhagen Deal Conceived and organized on 6-18 Dec 2009 by Bjorn Lomborg, then director of the Danish government's Environmental Assessment Institute Meant to replace Kyoto Protocol in 2013 Still no legal binding or any future sign of it Target temperature rise is 3.6F

9. Carbon Credits A carbon credit is a financial instrument that represents a tonne of CO2 or CO2e (carbon dioxide equivalent gases) removed or reduced from the atmosphere from an emission reduction project. Carbon credits are measured in units of certified emission reductions (CERs). Each CER is equivalent to one ton of carbon dioxide reduction. Such a credit can be sold in the international market at a prevailing market rate.

10. KP Mechanism

13. India 90,898,274 China 309,129,616

16. CER – Source of Generation Industries like: Manufacturing, Energy (renewable & non-renewable sources), Metal production, Mining and mineral production, Chemicals, Afforestation & reforestation, Transport and Agriculture

17. Price Determinants of Carbon Policy and regulatory Issues; Market fundamentals; and Technical Analysis.

18. India Scenario

20. The Seventh Conference of Parties (COP-7) to the UNFCCC decided that Parties participating in CDM should designate a National Authority for the CDM.

22. Indo German Energy Programme, embedded in Bureau of Energy Efficiency, Ministry of Power, Government of India is implementing "A CDM - Capacity building Programme" in partnership with Designated National Authority, Ministry of Environment and Forests, Government of India. Funded by German Ministry of Economic Cooperation and Development through IGEN, GIZ, for a period of three years will act as a facility that can help reduce transaction cost in early market development process.

23. Carbon Trading in India Multi Commodity Exchange of India Ltd. ( MCX) entered into a strategic alliance with CCX in September 2005 to initiate carbon trading in India. The tie-up would provide immense scope and opportunity for domestic suppliers to realize better prices for their carbon credits. India being a major supplier of carbon credits, the tie-up between the two exchanges is expected to ensure better price discovery of carbon credits

24. CDM POTENTIAL FOR INDIA Sector-wise break-up Total No. of Projects = 1578

25. Total No. of CERs = 633401547.39

26. CER POTENTIAL NCDMA , MoEF

27. CDM MARKET IN INDIA Fastest growing financial market – rose 80% in 2007 to reach nearly $ 60 billion - expected to be $ 1 trillion by 2009–10. 2007 carbon market shows China’s share at 61% and India at 12%. In terms of total CERs issued of 166 million, India has 43 million or 26%. In 2008, China’s share at 23% and India at 30% in terms of no of projects and 36% and 25% in terms of no of CER’s issued respectively. (13.10.08) An Indian firm, J.S.W Steel won the largest single CER of 5.4 million in 2 projects.

28. Thank You