India cashing in on carbon trading market
New Delhi, November 25:
With renewed global concern over climate change, carbon trading is emerging as a major business prospect for India Inc, which is eyeing a $100-billion annual potential, says a World Bank expert.
Under the Kyoto Protocol, when a company adopts a cleaner technology as compared to existing ones, the notional difference in emission levels becomes the carbon credit entitlement for that company, which can be traded in global markets.
The buyers of this credit are companies from developed countries, which have to cut their emission levels as per the protocol. But they are permitted to offset the inability to cut emission levels themselves by buying carbon credits.
“Sectors such as power, transport, cement and agriculture and providers of civic amenities like municipalities could significantly benefit fr-om carbon trading,” says Charles Cormier of the Bank.
“To capitalise on this booming carbon business, more and more Indian firms are setting up projects under the clean development mechanism,” Cormier, the team leader for the bank’s energy and environment programme in South Asia, said.
“The global business in carbon trading under the clean development mechanism (CDM) alone is currently valued at $5 billion a year,” said the expert.
“This can go up to $100 billion if the recommendations of the Intergovernmental Panel on Climate Change (IPCC) for a 50 per cent reduction in carbon emission is implemented.” According to statistics available with the United Nations Framework Convention on Climate Change, out of 844 projects registered under the CDM scheme, as many as 289 are from India, accounting for 34.24 per cent of the total.
China ranks next with 131 projects, or 15.52 per cent, followed by Brazil with 113, or 13.39 per cent, Mexico with 97, or 11.49 per cent.