This presentation is related to carbon trading and LCA

1. Carbon trading and
life cycle Assessment
UNIT 4

2. Environmental Statement (ES)
 An Environmental Statement is a publicly available document.
It sets out the developer’s own assessment of the likely environmental effects of his proposed
development.
It is prepared by the developer and submitted with his planning application. While the
responsibility for preparing the environmental statement lies with the developer, he is expected
to consult with those public authorities with relevant information.
Those bodies are required to make available to the developer such environmental information
as may be relevant.

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All environmental statements must include a description of the project, the main effects it is
likely to have on the environment, a description of the measures Taken to avoid, reduce or
remedy significant adverse environmental effects, an outline of the main alternatives studied by
the developer and a summary, in non-technical language.

4. EIA development is defined as
either
 "Schedule 1 development", for which an Environment Statement is required in every case.
For example crude oil refineries; aerodromes with a runway length of 2,100 meters or more;
waste disposal installations for the incineration, chemical treatment, or landfill of hazardous
waste; gas pipelines of more than 800mm in diameter and 40 kilometers in length; intensive
livestock installations .
 "Schedule 2 development" for which EIA (Environmental impact assessment) is required only
if the project is likely to give rise to significant environmental effects. These are developments
which include intensive fish farms; large pig and poultry units (unless in Schedule 1); mineral
extraction; energy producing installations such as wind farms and hydroelectric installations;
metal processing; chemical, food, textile, rubber and paper industries; infrastructure projects;
tourist development and waste disposal. Projects of a type listed in Schedule 2 which are not in
a sensitive area and are below the threshold in Column 2 of that Schedule do not require EIA.

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 However, where any part of the proposed development is in a sensitive area, or any threshold
in Column 2 of that Schedule is exceeded or met, EIA may be required. The Department will
make a determination, on the need or not for EIA - this process is referred to as "screening". It
will also advise on the content of the ES, on request - referred to as "scoping".
Changes and Extensions to existing development
Following the Baker ruling in the High Court of Justice, the Courts have made it clear that the
change or extension should not be considered in isolation. The 2012 EIA Regulations apply the
applicable thresholds to the development as changed or extended.

6. Who decides whether EIA is
necessary?
 A developer may decide that his project falls within Schedule 1 or that it meets or exceeds the
thresholds in Schedule 2 or is in or partly in a sensitive area, and submit an ES with his planning
application. He may also apply to the Department asking them to determine if EIA is required.
He should ask the Department as soon as he can provide a basic minimum information on the
proposal.
 More often, it will probably fall to the Department to determine if the application is an EIA
application. It should be noted that if an application is an EIA application it cannot be
processed until the ES is received.

7. In the Case of Schedule 2
Projects, How Is ‘Significance’
Determined?
There are 3 main considerations to be taken into account:
 The characteristics of the development, including its size, cumulation with other
developments, use of natural resources, production of waste, pollution and nuisance and the
risk of accidents having regard to the substances and technologies used;
 The location of the development e.g. the existing land use, the abundance of natural
resources in the area and whether it is intended for a sensitive location; and
 The characteristics of the potential impact, its duration and frequency, transfrontier nature
etc.

8. What are the advantages of EIA?
 Environmental Impact Assessment should provide a basis for better decision making for the
Department and other public bodies with environmental responsibilities.
 For developers, the process should draw attention at an early stage, to the potential
environmental effects of the proposal so the alternatives can be examined or remedial
measures incorporated in the designs.
 Another advantage is that the implications of proposed new development should be
thoroughly analyzed before a planning application is made, and more comprehensive
information provided with the application.

9. Green House Gases-
Introduction to Net radiation Budget

41. Carbon credit
 A carbon credit is a generic term for any tradable certificate or permit representing the right
to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon
dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide.
 Carbon credits and carbon markets are a component of national and international attempts to
mitigate the growth in concentrations of greenhouse gases (GHGs). One carbon credit is equal
to one tonne of carbon dioxide, or in some markets, carbon dioxide equivalent gases. Carbon
trading is an application of an emissions trading approach. Greenhouse gas emissions are
capped and then markets are used to allocate the emissions among the group of regulated
sources.

42. Carbon credit-
The goal is to allow market mechanisms to drive industrial and commercial processes in the
direction of low emissions or less carbon intensive approaches than those used when there is no
cost to emitting carbon dioxide and other GHGs into the atmosphere.
Since GHG mitigation projects generate credits, this approach can be used to finance carbon
reduction schemes between trading partners and around the world.

43. Carbon credit-
 There are also many companies that sell carbon credits to commercial and individual
customers who are interested in lowering their carbon footprint on a voluntary basis.
These carbon off setters purchase the credits from an investment fund or a carbon
development company that has aggregated the credits from individual projects.
 Buyers and sellers can also use an exchange platform to trade, which is like a stock exchange
for carbon credits. The quality of the credits is based in part on the validation process and
sophistication of the fund or development company that acted as the sponsor to the carbon
project.
 This is reflected in their price; voluntary units typically have less value than the units sold
through the rigorously validated Clean Development Mechanism.

44. Carbon Sequestration
 Carbon sequestration is the process involved in carbon capture and the long-term storage
of atmospheric carbon dioxide or other forms of carbon to mitigate or defer global warming. It
has been proposed as a way to slow the atmospheric and marine accumulation of greenhouse
gases, which are released by burning fossil fuels.
 Carbon dioxide (CO2) is naturally captured from the atmosphere through biological, chemical,
and physical processes. Artificial processes have been devised to produce similar
effects, including large-scale, artificial capture and sequestration of industrially produced
CO2 using subsurface saline aquifers, reservoirs, ocean water, aging oil fields, or other carbon
sinks.

46. Description
Carbon sequestration is the process involved in carbon capture and the long-term storage of
atmospheric carbon dioxide (CO2) and may refer specifically to:
"The process of removing carbon from the atmosphere and depositing it in a reservoir." When
carried out deliberately, this may also be referred to as carbon dioxide removal, which is a form
of geoengineering.
Carbon capture and storage, where carbon dioxide is removed from flue gases (e.g., at power
stations) before being stored in underground reservoirs.
Natural biogeochemical cycling of carbon between the atmosphere and reservoirs, such as
by chemical weathering of rocks.

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Carbon dioxide may be captured as a pure by-product in processes related to petroleum
refining or from flue gases from power generation. CO2 sequestration includes the storage part
of carbon capture and storage, which refers to large-scale, artificial capture and sequestration
of industrially produced CO2 using subsurface saline aquifers, reservoirs, ocean water, aging oil
fields, or other carbon sinks.
Carbon sequestration describes long-term storage of carbon dioxide or other forms of carbon to
either mitigate or defer global warming and avoid dangerous climate change. It has been
proposed as a way to slow the atmospheric and marine accumulation of greenhouse gases,
which are released by burning fossil fuels.
Carbon dioxide is naturally captured from the atmosphere through biological, chemical or
physical processes. Some artificial sequestration techniques exploit these natural processes,
while some use entirely artificial processes.

48. Sustainable Development through
Trade
The response to climate change is one of the most pressing policy issues of our time. Carbon
trading assets are currently worth more than $100 billion. This market is expected to reach $3
trillion by 2020.
In Stabilizing an Unstable Economy Hyman Minsky notes that the markets for financial assets
are inherently unstable, leading to the cyclical behavior of the economic system.
How effective then are market-based solutions to solving climate change? It might just be that
carbon markets have not reduced environmental instability and may increase financial
instability of the entire economic system.

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The core of carbon trading is not trading of physical GHGs, but the trading of the right to emit
GHGs and the unit of account is a ton of carbon dioxide equivalent (tCO2e).
The carbon market stems from the Kyoto Protocol, and its specifics are target of discussion as
scholars debate about the legal characteristics of the carbon unit. Some countries view it as a
commodity while others see it as a monetary currency.

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Under the Kyoto Protocol trading mechanisms were made up of three types:
1.international emissions trading,
2.the Clean Development Mechanism (CDM),
3.and Joint Implementation (JI).
The European Union Emission Trading System (EU ETS) is the world’s largest carbon market.

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Voluntary markets exchanges (carbon markets outside the Kyoto) are also on the rise because
they make trading, hedging and risk management easier by providing liquidity.
 Furthermore, they develop sophisticated financial instruments such as CER futures, options,
and swaps, which will help establish a price forecast for carbon.
Some of these markets are the Chicago Climate Exchange (CCX), Multi-Commodity Exchange of
India (MCX), and Asian Carbon Trade Exchange.

52. Sustainable Development-
 From their foundation, carbon markets have failed to address the underlying root causes of
climate change. They divert money from technological investment that will actually reduce the
use of fossil fuels towards the financial markets.
 Furthermore, they are causing instability in the environment through the use of carbon
offsets, which have caused massive green grabs to occur in the global South, and through
outsourcing emissions to developing nations. Carbon offsets were created by Kyoto to describe
emissions reductions projects that are not covered by an ETS ( emission trading system) . For
instance, tree plantations, fuel switches, wind farms, hydroelectric dams…etc.

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Furthermore, carbon trading has also failed to reduce global GHGs emissions. When a country
claims to have reduced its carbon emissions, one must question whether it is by adopting low-
carbon technologies, like how Sweden used well-crafted public policies and market incentives to
decarbonization, or by outsourcing its emissions to another country, most likely to developing
nations.

54. Carbon Trading-
Carbon emissions trading is a form of emissions trading that specifically targets carbon
dioxide (calculated in tonnes of carbon dioxide equivalent or tCO2e) and it currently constitutes
the bulk of emissions trading.
This form of permit trading is a common method countries utilize in order to meet their
obligations specified by the Kyoto Protocol; namely the reduction of carbon emissions in an
attempt to reduce (mitigate) future climate change.

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Under Carbon trading, a country having more emissions of carbon is able to purchase the right
to emit more and the country having less emission sells the right to emit carbon to other
countries.
The countries emitting more carbon thereby satisfy their carbon emission requirements, and
the trading market results in the most cost-effective carbon reduction methods being exploited
first.
For any given expenditure on carbon reduction, the market mechanism will result in the
greatest reduction.

56. Economics
Emissions trading works by setting a quantitative limit on the emissions produced by emitters.
The economic basis for emissions trading is linked to the concept of property rights-
Costs and valuation
Ethics and fairness
Coase model
Equity
Taxes versus caps
Trading
Incentives and allocation

57. Market trend
Carbon emissions trading has been steadily increasing in recent years. According to the World
Bank's Carbon Finance Unit, 374 million metric tonnes of carbon dioxide equivalent (tCO2e) were
exchanged through projects in 2005, a 240% increase relative to 2004 (110 mtCO2e) which was
itself a 41% increase relative to 2003 (78 mtCO2e).
The increasing costs of permits have had the effect of increasing costs of carbon emitting fuels
and activities. Based on a survey of 12 European countries, it was concluded that an increase in
carbon and fuel prices of approximately ten percent would result in a short-run increase in
electrical power prices of roughly eight percent. This would suggest that a lowering cap on
carbon emissions will likely lead to an increase in the costs of alternative power sources.
Whereas a sudden lowering of a carbon emission cap may prove detrimental to economies, a
gradual lowering of the cap may risk future environmental damage via global warming.

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In 2010 Chicago Climate Exchange (CCX) ceased its trading of carbon emissions.450 members of
the CCX had achieved reductions of 700million tonnes of emissions over the life of the cap and
trade program. The seven year CCX cap and trade program claimed to have successfully
provided cost-effectiveness and market-based flexibility for emissions trading.

59. Life cycle Assessment-
Life-cycle assessment (LCA, also known
as life-cycle analysis, eco-balance, and cradle-
to-grave analysis) is a technique to assess
environmental impacts associated with all the
stages of a product's life from raw material
extraction through materials processing,
manufacture, distribution, use, repair and
maintenance, and disposal or recycling.
Designers use this process to help critique
their products.

60. Life cycle Assessment-
LCAs can help avoid a narrow outlook on environmental concerns by:
oCompiling an inventory of relevant energy and material inputs and environmental releases;
oEvaluating the potential impacts associated with identified inputs and releases;
oInterpreting the results to help make a more informed decision

61. Goals and purpose of LCA
The goal of LCA is to compare the full range of environmental effects assignable to products
and services by quantifying all inputs and outputs of material flows and assessing how these
material flows affect the environment. This information is used to improve processes, support
policy and provide a sound basis for informed decisions.
The term life cycle refers to the notion that a fair, holistic assessment requires the assessment
of raw-material production, manufacture, distribution, use and disposal including all intervening
transportation steps necessary or caused by the product's existence.

62. Life cycle Assessment-
There are two main types of LCA. Attributional LCAs seek to establish (or attribute) the
burdens associated with the production and use of a product, or with a specific service or
process, at a point in time (typically the recent past). Consequential LCAs seek to identify the
environmental consequences of a decision or a proposed change in a system under study
(oriented to the future), which means that market and economic implications of a decision may
have to be taken into account. Social LCA is under development as a different approach to life
cycle thinking intended to assess social implications or potential impacts. Social LCA should be
considered as an approach that is complementary to environmental LCA.
The procedures of life cycle assessment (LCA) are part of the ISO 14000 environmental
management standards: in ISO 14040:2006 and 14044:2006. (ISO 14044 replaced earlier
versions of ISO 14041 to ISO 14043.) GHG product life cycle assessments can also comply with
specifications such as PAS(PUBLICLY AVAILABLE SPECIFICATION) 2050 and the GHG Protocol Life
Cycle Accounting and Reporting Standard.

63. Stages of LCA-
According to the ISO 14040 and
14044 standards, a Life Cycle
Assessment is carried out in four
distinct phases as illustrated in the
figure shown to the right. The phases
are often interdependent in that the
results of one phase will inform how
other phases are completed.

64. 1. Goal and scope
An LCA starts with an explicit statement of the goal and scope of the study, which sets out the
context of the study and explains how and to whom the results are to be communicated. This
is a key step and the ISO standards require that the goal and scope of an LCA be clearly
defined and consistent with the intended application. The goal and scope document therefore
includes technical details that guide subsequent work:
 the functional unit, which defines what precisely is being studied and quantifies the service
delivered by the product system, providing a reference to which the inputs and outputs can
be related. Further, the functional unit is an important basis that enables alternative goods, or
services, to be compared and analyzed. So to explain this a functional system which is inputs,
processes and outputs contains a functional unit, that fulfills a function, for example paint is
covering a wall, making a functional unit of 1m² covered for 10 years. The functional flow
would be the items necessary for that function, so this would be a brush, tin of paint and the
paint itself.

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The system boundaries; which are delimitations of which processes that should be included in
the analysis of a product system.
Any assumptions and limitations
The allocation methods used to partition the environmental load of a process when several
products or functions share the same process; allocation is commonly dealt with in one of three
ways: system expansion, substitution and partition. Doing this is not easy and different
methods may give different results.
 The impact categories chosen for example human toxicity, smog, global
warming, eutrophication.

66. 2. Life cycle inventory
Life Cycle Inventory (LCI) analysis involves creating an inventory of flows from and to nature for
a product system. Inventory flows include inputs of water, energy, and raw materials, and
releases to air, land, and water. To develop the inventory, a flow model of the technical system
is constructed using data on inputs and outputs.
The flow model is typically illustrated with a flow chart that includes the activities that are going
to be assessed in the relevant supply chain and gives a clear picture of the technical system
boundaries. The input and output data needed for the construction of the model are collected
for all activities within the system boundary, including from the supply chain (referred to as
inputs from the techno-sphere.

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The data must be related to the
functional unit defined in the goal
and scope definition.
Data can be presented in tables and
some interpretations can be made
already at this stage.
 The results of the inventory is an
LCI which provides information
about all inputs and outputs in the
form of elementary flow to and from
the environment from all the unit
processes involved in the study.

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LCI Methods-
Process LCA
Economic Input Output LCA
Hybrid Approach

69. 3. Life cycle impact assessment
Inventory analysis is followed by impact assessment. This phase of LCA is aimed at evaluating
the significance of potential environmental impacts based on the LCI flow results.
Classical life cycle impact assessment (LCIA) consists of the following mandatory elements:
1.Selection of impact categories,
2.category indicators, and
3.characterization models;
the classification stage, where the inventory parameters are sorted and assigned to specific
impact categories; and impact measurement, where the categorized LCI flows are characterized,
using one of many possible LCIA methodologies, into common equivalence units that are then
summed to provide an overall impact category total.

70. 4. Interpretation
Life Cycle Interpretation is a systematic technique to identify, quantify, check, and evaluate
information from the results of the life cycle inventory and/or the life cycle impact assessment.
The results from the inventory analysis and impact assessment are summarized during the
interpretation phase. The outcome of the interpretation phase is a set of conclusions and
recommendations for the study.
According to ISO 14040:2006, the interpretation should include: identification of significant
issues based on the results of the LCI and LCIA phases of an LCA;
evaluation of the study considering completeness, sensitivity and consistency checks; and
conclusions, limitations and recommendations.

71. Life cycle costing-
Life Cycle Cost (LCC) of an item represents
the total cost of its ownership, and includes
all the cots that will be incurred during the
life of the item to acquire it, operate it,
support it and finally dispose it.
Life Cycle Costing adds all the costs over
their life period and enables an evaluation
on a common basis for the specified period
(usually discounted costs are used)

72. Life cycle costing-
Definition
Life cycle costing is defined as the total cost throughout its life including planning, design,
acquisition & support costs & any other costs directly attributable to owning / using the asset.
Category of LCC Capital assets :
•Initial costs
•Operating costs
•Disposal costs

87. Eco-labelling
 Eco-labels and Green Stickers are labeling systems for food and consumer products. Ecolabels
are voluntary, but green stickers are mandated by law; for example, in North America major
appliances and automobiles use Energy Star. They are a form of sustainability
measurement directed at consumers, intended to make it easy to take environmental concerns
into account when shopping.
 Some labels quantify pollution or energy consumption by way of index scores or units of
measurement, while others assert compliance with a set of practices or minimum requirements
for sustainability or reduction of harm to the environment.

89. Eco-labelling
 Many ecolabels are focused on minimizing the negative ecological impacts of primary
production or resource extraction in a given sector or commodity through a set of good
practices that are captured in a sustainability standard.
 Through a verification process, usually referred to as "certification", a farm, forest, fishery, or
mine can show that it complies with a standard and earn the right to sell its products as certified
through the supply chain, often resulting in a consumer-facing ecolabel.
 Ecolabelling systems exist for both food and consumer products. Both systems were started
by NGOs, since then the European Union have developed legislation for conduct of ecolabelling
and also have created their own ecolabels, one for food and one for consumer products. At
least for food, the ecolabel is nearly identical with the common NGO definition of the rules for
ecolabelling.

90. Design of Environment
Design for Environment focuses on efforts by producers and manufacturers to reduce product
or process impact on the environment.
Design for the Environment (DfE) is a design approach to reduce the overall human health and
environmental impact of a product, process or service, where impacts are considered across its
life cycle.
Different software tools have been developed to assist designers in finding optimized products
or processes/services.
DfE is also the original name of a United States Environmental Protection Agency (EPA)
program, created in 1992, that works to prevent pollution, and the risk pollution presents to
humans and the environment. The program provides information regarding safer chemical
formulations for cleaning and other products. EPA renamed its program "Safer Choice" in 2015

91. Design for Environment practices
Four main concepts that fall under the DfE umbrella.
1. Design for environmental processing and manufacturing: This ensures that raw
material extraction (mining, drilling, etc.), processing (processing reusable materials, metal
melting, etc.) and manufacturing are done using materials and processes which are not
dangerous to the environment or the employees working on said processes. This includes the
minimization of waste and hazardous by-products, air pollution, energy expenditure and other
factors.
2. Design for environmental packaging: This ensures that the materials used in packaging are
environmentally friendly, which can be achieved through the reuse of shipping products,
elimination of unnecessary paper and packaging products, efficient use of materials and space,
use of recycled and/or recyclable materials.

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Design for disposal or reuse: The end-of-life of a product is very important, because some
products emit dangerous chemicals into the air, ground and water after they are disposed of in
a landfill. Planning for the reuse or refurbishing of a product will change the types of materials
that would be used, how they could later be disassembled and reused, and the environmental
impacts such materials have.
Design for energy efficiency: The design of products to reduce overall energy consumption
throughout the product's life.

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life cycle assessment (LCA) is employed to forecast the impacts of different (production)
alternatives of the product in question, thus being able to choose the most environmentally
friendly.
A life cycle analysis can serve as a tool when determining the environmental impact of a product
or process.
Proper LCAs can help a designer compare several different products according to several
categories, such as energy use, toxicity, acidification, CO2 emissions, ozone depletion, resource
depletion and many others.
By comparing different products, designers can make decisions about which environmental
hazard to focus on in order to make the product more environmentally friendly.

94. Why do firms want to design for the
environment
Modern day businesses all aim to produce goods at a low cost while maintaining quality, staying
competitive in the global marketplace, and meeting consumer preferences for more
environmentally friendly products.
To help businesses meet these challenges, EPA encourages businesses to incorporate
environmental considerations into the design process.
The benefits of incorporating DfE include: cost savings, reduced business and environmental
risks, expanded business and market opportunities, and to meet environmental regulations.

95. ISO Participation
The last few years have seen two key trends in the ecolabels space. There is an explosion in the
numbers of different ecolabelling programs across the world and across business sectors and
secondly the proliferation of umbrella labeling programs. The International Organization for
Standardization ISO has created standards for labeling practices within the ISO 14000 schema.
ISO 14020 to 14025 series deals with environmental labels and declarations. ISO proposed
three categories of environmental labels according to the aspects covered and the rigor
required to award the seal:
type I in ISO 14024;
type II in ISO 14021; and
type III in ISO 14025.

103. Thank You !!!