09 po in Environmental laws, Green audit and Carbon related areas
1. PROFESSIONAL OPPORTUNITIES
IN ENVIRONMENTAL LAWS,
GREEN AUDIT & CARBON
RELATED AREAS
CA. Rajkumar S. Adukia
098200 61049
rajkumarfca@gmail.com
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2. Professional Opportunities in
Carbon Credit
1. Conceptualizing the Clean Development Mechanism
(CDM) project
2. Quantification of greenhouse gases (GHG) Carbon
Footprint
3. Selection of Cleaner technologies for New projects
4. Project risk analysis
5. Registration of project - both national and international
level
6. Obtaining Host country approval
7. Preparation of Project Concept Note
8. Preparation of Project Design Document
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3. Professional Opportunities in
Carbon Credit
9. Selection of Methodologies and Baseline
10. Legal and regulatory advice during negotiations with
host country Designated National Authority (DNA)
11. Advice on the appointment of independent validators
12. Assistance to achieve registration of the project by the
CDM Executive Board
13. Assistance in getting verification done by Designated
Operational Entity (DOE)
14. Ensure Compliances
15. Assisting various Ministries associated with National
Action Plan on Climate Change (NAPCC)
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4. Professional Opportunities in
Carbon Credit
16. Carbon Finance
17. Energy Audit under The Energy Conservation
Act 2001
18. Advise on investment in carbon credit
19. Accounting advisory services
20. Taxation advisory services
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5. Professional Opportunities in
Environmental Laws and Green
Audit
1. As Environmental Consultants - give opinion on
viability of various projects, technologies to prevent
pollution and clean up polluted resources
2. Obtain consents for establishment of Unit
3. Submission of Gross Block investment certificate along
with the consent application for establishment of a Unit.
4. Environmental clearance under the Environment
Impact Assessment Notification.
5. Record keeping of various hazardous wastes,
chemicals etc, as prescribed under the Hazardous
Wastes (Management and Handling) Rules, 1989 and
Manufacture, Storage, and Import of Hazardous
Chemicals Rules, 1989. rajkumarfcasubscribe@yahoogroups.com
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6. Professional Opportunities in
Environmental Laws and Green
Audit
6. Status of compliance of Rules 5, 7, 10,11,12,13 and 18
under the Manufacture, Storage, and Import of
Hazardous Chemicals Rules, 1989 need to be given in the
application for consent to establish/operate/renewal of
consent. This status of compliance can be given by
Chartered Accountants in the form of a certificate of
compliance.
a. Rule 5 – Notification of major accident
b. Rule 7 – Notification of sites
c. Rule 10 – Preparation and submission of safety
report
d. Rule 11 – Updation of safety report
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7. Professional Opportunities in
Environmental Laws and Green
Audit
e. Rule 12 – Requirements of further information to
given to the authority
f. Rule 13 – Preparation of on-site emergency plan by
the occupier
g. Rule 18 – Import of hazardous chemicals
7. After consent to establish/operate is obtained under
the Water (Prevention and Control of Pollution) Act,
1974 and Air (Prevention and Control of Pollution) Act,
1981, CA can ensure on a monthly/quarterly/half-yearly
basis that the conditions of the consent order are
complied with by the industrial unit.
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8. Professional Opportunities in
Environmental Laws and Green
Audit
8. CA can also ensure on a monthly/ quarterly/ halfyearly basis that the conditions of the authorization are
complied by the industrial units under the Hazardous
Wastes (Management and Handling) Rules, 1989.
9. Give report or certificate with regard to capital
investment under the Biomedical waste (Management
and Handling) Rules, 1998. This is an important
document to be submitted along with the application for
authorization.
10. Environmental Audits
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9. WHY CARBON CREDIT CAME
INTO EXISTENCE
GEOGRAPHICAL BOUNDARY CAN BE
DIVIDED
ATMOSPHERE IS INDIVISBLE
WORLD DISCUSSION STARTED ON HOW TO
MITIGATE CLIMATE CHANGE
VARIOUS ALTERNATIVES DISCUSSED
WHO ARE RESPONSIBLE FOR CLIMATE
CHANGE ?
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10. Climate Change
Temperature Increase of 0.4O
C in last 100 years.
Increase in monsoon
seasonal rainfall across
West Coast, AP
Decrease in monsoon in
North East India, Kerala
Climate Models predict 2-4
O
C rise by 2050s
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12. Effects of changing climate
A decrease in the quantity and quality of water in many arid and
semi-arid areas
A decrease in the reliability of hydropower and plantation biomass.
An increase in the loss of species and degradation of key ecosystems
such as coral reefs, which play a critical role in the economy of some
developing countries;
The displacement of tens of millions of people in low-lying areas
An increased threat in national and regional security because of the
loss of natural resources and the potential flow of environmental
refugees
An increase in the incidence of vector-borne diseases (e.g., malaria
and dengue), water-borne diseases (e.g., cholera), and malnutrition
throughout the tropics and sub-tropics, where millions of lives are
rajkumarfcalost every year;
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13. Effects of changing climate
A decrease in agricultural productivity in the tropics and sub-tropics.
For low-lying areas in the world, the threat of climate change is a matter
of survival. The sea level could rise by one meter over the next century,
which would have the following consequences
In countries with significant low-lying areas, coastal communities
would be severely threatened. For example, 17% of the land area of
Bangladesh would be lost and tens of millions of people displaced.
The survival of low-lying small island states would be in doubt, in
particular for the many island states in the Indian and Pacific Ocean
and Caribbean that are only a few meters above sea level.
While no one will be able to escape from climate change, it is the poorer
people and countries who are most vulnerable to its negative impacts.
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16. Key Words
Global warming is the increase in the average temperature of the Earth's
near-surface air and oceans in recent decades and its projected
continuation.
GHG: Green House Gases (eg. Carbon dioxide, Methane, Nitrous oxide,
HFC 23, Sulphur hexafluoride and Per fluoro carbons)
UNFCCC: United Nations Framework Convention on Climate Change
KP: Kyoto Protocol
CERs: A certified emission reduction or CER is a unit issued pursuant to
reduction in GHG emissions equal to one metric tonne of carbon dioxide
equivalent, calculated using global warming potentials defined by
UNFCCC.
Clean development mechanism (CDM) : Article 12 of the Kyoto Protocol
defines the CDM as. “The purpose of the clean development mechanism
shall be to assist Parties not included in Annex I in achieving sustainable
development and in contributing to the ultimate objective of the
Convention, and to assist Parties included in Annex I in achieving
compliance with their quantified emission limitation and reduction
rajkumarfcacommitments”.
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17. The Green House Effect
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18. Global Initiative to Mitigate CC
United Nations Conference On Human Environment
(1972)
Vienna Convention For Protection Of Ozone Layer (1985)
Montreal Protocol (1987)
Intergovernmental Panel on Climate Change (1988)
United Nations Conference on Environment And
Development (1992) at Rio
Conference Of The Parties To The UNFCCC ( from 1995 )
Kyoto Protocol (1997)
Marrakesh Accord ( 2001 )
World Summit on Sustainable Development ( WSSD ),
2002
Global Environment Facility ( GEF )
rajkumarfcaPrototype Carbon subscribe@yahoogroups.com Bank, 2002
Fund (PCF), World
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19.
United Nations Framework
Convention on Climate Change
(UNFCCC)
UNFCCC – An international environmental treaty entered
into force on 21st March 1994.
Signed by 154 states (plus the EU) in 1992
Currently 195 parties have ratified UNFCCC
Based on three principles – 1. Common but differentiated
responsibility; 2. Precautionary approach; 3. Sustainable
Economic Growth and Development.
Divides countries into two main groups - Annex I
(Developed) & Non-Annex I Countries (Developing).
Under the UNFCCC, the Annex I parties, consisting of
highly industrialized countries and countries undergoing
transition to a market economy, have legally binding
greenhouse gas (GHG) emission limitation and reduction
rajkumarfcacommitments while developing countries have non-binding
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obligations to limit emissions.
20. Kyoto Protocol
Its an addition to the UNFCCC Treaty.
Is an international and legally binding agreement
It was negotiated in Kyoto, Japan and entered into force
on 16th February 2005
It assigns mandatory targets for signatory nations to
reduce their emission of the specified 6 greenhouse
gases, or engage in emissions trading if they maintain or
increase emission of these gases.
Annex I (developed countries) parties of the UNFCCC
have agreed to reduce their GHGs by 5.2 % below 1990
levels in the Protocol’s 1st commitment period
The first commitment period under this Protocol starts
rajkumarfcafrom calendar year 2008 to calendar year end 2012.
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23. Kyoto Protocol – The “Flexibility
Mechanisms”
Provides for 3 co-operative implementation mechanism.
1) Joint Implementation (JI),
(which 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 which industrialized countries can finance mitigation projects in
developing countries contributing to their sustainable development )
3) International Emissions Trading (ET)
(which permits countries to transfer parts of their 'allowed emissions' assigned amount units )
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24. India & Carbon Credits
India ratified UNFCCC on 1st November
1993.
India ratified Kyoto Protocol on 26th
August 2002
The Ministry of Environment and Forests,
Government of India, is the nodal agency
for climate change issues in India.
The National Action Plan on Climate
Change (NAPCC), was released by
the Prime Minister on 30th June, 2008
India is being heralded as the next
carbon credit destination of the world.
On 7th September 2012, the one
billionth CER credit under the KP’s
CDM was issued to a project at a
manufacturing plant in India that has
switched its fuel source from coal and
oil to locally gathered biomass.
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25. India’s National Action Plan on
Climate Change (NAPCC)
NAPCC was released on 30th June, 2008
It is ‘A National Document compiling action taken for addressing the
challenge of Climate Change, and the action it proposes to take ’
The Action Plan, would be implemented through a core of eight
National Missions running through 2017:
1. National Solar Mission
2. National Mission for Enhanced Energy Efficiency
3. National Mission on Sustainable Habitat
4. National Water Mission
5. National Mission for Sustaining the Himalayan Ecosystem
6. National Mission for creating a “Green India”)
7. National Mission for Sustainable Agriculture
8. National Mission on establishing a Strategic Knowledge
Platform for Climate Change.
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26. Contd…
The Prime Minister’s Council on Climate Change is in
charge of the overall implementation of the plan. The
Council will also be responsible for periodically
reviewing and reporting on each mission’s progress.
The Council is Chaired by the Prime Minister.
The NAPCC consists of several targets on climate change
issues and addresses the urgent and critical concerns of
the country.
The National Missions were to be institutionalized by
the respective Ministries and would be organized
through inter-sectoral groups.
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27. Contd….
Each Mission was to evolve specific objectives spanning
the remaining years of the 11th plan period at the time it
was laid down and the 12th Plan Period and each
Mission will report publicly on its annual performance.
Ministries with lead responsibility for each of the
missions are directed to develop objectives,
implementation strategies, timelines, and monitoring
and evaluation criteria, to be submitted to the Prime
Minister’s Council on Climate Change.
Each Mission will report publicly on its annual
performance
All the missions have been implemented and progress is
rajkumarfcabeing made
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28. Clean Development Mechanism
(CDM)
CDM offers industrialized countries the
possibility to engage in economically and
environmentally competitive emission reduction
projects in developing countries (the NonAnnexure I countries).
Through the CDM, certified emission reductions
(CERs) will be generated.
These CER credits, each equivalent to one tonne
of CO2, can be can be traded and sold, and used
by industrialized countries for the purpose of
being counted towards meeting Kyoto targets.
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29. Institutional Framework
The CDM is administered by the CDM Executive
Board (CDM Board)
CDM Board reports and is accountable to the
Conference of Parties (COP).
Developing country is the Project Developer also
known as the Host Party/Country
Annexure 1 countries are the Investors
The project has to be first approved by
Designated National Authority (DNA) of the
Host country where the project is being set up.
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30. Contd…
The Designated National Authority
(DNA) in India is the National Clean
Development Mechanism Authority
(NCDMA)
An institution which verifies the essential
prerequisites for CDM projects and
certifies the emission reductions is the
Designated Operational Entity (DOE)
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31. Project requirements
Must promote sustainable development as
defined by host countries
Emission reductions must be:
Real
Measurable
Additional
Funding for CDM must not divert funds from
existing government development programs
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32. Carbon Credits
Carbon credits are reductions of emission of Green
House Gases (GHGs) caused by a project.
1 M ton CO2 = 1 carbon credit = 1 CER [Certified
Emission Reduction Unit –in CDM terminology]
The reduction is achieved by improved and
modern technology and process.
VER –Voluntary/Verified Emission reductions (For
non registered Projects)
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33. Host country eligibility
requirements
Ratified Kyoto Protocol
Designate a DNA
- Designated National Authority
Approves CDM projects
Confirms project in line with country’s sustainable
development agenda.
Confirms project in accordance with all laws
Reviews PDD to see if complete
Approval process not set by CDM. Each country
allowed to determine own rules
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34. Methodologies
Incineration of HFC 23 waste streams
Analysis of the least cost fuel option for
seasonality operating biomass cogeneration
plants
Recovery & utilization of gas from oil wells
that would otherwise be flared.
Natural Gas based package cogeneration
Steam system efficiency improved by
replacing steam traps.
Baseline methodology for decomposition of
N20 from existing adipic acid production
plants
Method for zero emissions grid connected
electricity generation from renewable
rajkumarfcasources
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35. Methodologies
Methodology from greenhouse gas reductions through
waste head recovery & utilization for power generation
at cement plants
Avoid emissions from organic waste through alternative
waste treatment processes
Substitute of CO2 from fossil or mineral origin by CO2
from renewable sources in the production of inorganic
compounds
Methods for bus rapid transit projects
Methane emissions reduction from organic waste, water
and bio-organic solid waste using composting
Afforestation and reforestation activities
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36. Small Scale CDM Projects
Power projects upto 15 mega watts
Energy saving of 60 giga watts hours per year
Reduction of 60 kt CO2 per year.
A & R Sequestration of 8 kt CO2
It should not be debundled component of large
methodology
Approved Simplified Methodologies by CDM EB
Same DOE can undertake validation, verification and
certification
Bundling of projects feasible
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37. CDM Project Cycle - Basics
Preparation of PIN - DNA
Preparation of PDD - UNFCCC
Project Validation
By UNFCCC Accredited DOE
Host Country Approval
To the Candidate Project
ONE TIME ACTIVITY
Submission for Registration
(UNFCCC – CDM Executive Board)
Project Performance Monitoring
by Project Proponent
RECURRING ACTIVITY
Certification & Issuance of CERs
(DOE & UNFCCC)
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38. CDM Registration
Step 1: PDD submission
Project Design Document
Presents information on the essential technical and
organizational aspects of project activity
Contains information on activity, application of
approved baseline and monitoring methodologies
Submitted to DOE, which decides on validity. Must
be accepted by EB
Must demonstrate project will result in net carbon
emission reductions
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39. Baseline Methodology
Application of an approach for determination
of baseline scenario
Should reflect aspects such as environmental
conditions and past land uses and land-use
changes
Must be established in a transparent and
conservative manner
Submitted to DOE, which decides on validity.
Must be accepted by EB
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40. The Additionality Test
“additionality” criteria, – “ The emission
reductions of the proposed project must be
additional to any that would occur in absence
of the project”.
Would the project have happened otherwise?
Emission Additionality
Financial Additionality
Environmental Additionality
Technological Additionality
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41. Host Country Approval
Project must obtain approval from the host
government.
The Designated National Authority (DNA) in
India is the National Clean Development
Mechanism Authority (NCDMA)
The NCDMA is a single window clearance for
CDM projects in the country.
Once the members of NCDMA are satisfied, the
Host Country Approval (HCA) is issued by the
Member-Secretary of the National CDM
rajkumarfcaAuthority.
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42. Step 2: Validation and Registration
Validation conducted by a DOE
Reviews PDD
Validates proposed CDM project and submits a validation
report to EB
PDD
Written approval of project by DNA
Explanation of response to public comments
Registration
Requested by DOE to the EB
Registration is final after 8 weeks unless a review is
requested
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43. Step 3: Implementation and
Monitoring
Project Implementation
Follow methodology written in PDD
Monitoring
Follow methodology set in the PDD
Complete and submit a monitoring report
Includes estimates of carbon emission reductions
Available to the public
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44. Step 4: Verification and certification
Verification
Independent review of emission reductions by a
DIFFERENT DOE
DOE submits ‘verification report’ to EB and is
made publicly available
Report covers a specific period
Certification
Conducted by DOE
Specific period, project achieved certain level of
emission reductions
Reductions are additional
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45. Registration Fee
USD 0.10 per CER for the first 15,000 tonnes of CO2
equivalent for which issuance is requested in a given
calendar year;
USD 0.20 per CER for any amount in excess of 15,000
tonnes of CO2 equivalent for which issuance is
requested in a given calendar year
Maximum Fee USD 350,000
No registration fee to be paid for CDM project
activities with expected average annual reduction
below 15,000 t CO2-equivalent.
No registration fee are to be paid for CDM project
activities hosted in least developed countries
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46. Step 5: Issuance of CERs
CER: Certified Emission Reduction credits
Issued after verification and certification by DOE
Can be sold in international emissions reduction
market
Project review
After credits sold, project can review what steps it
wants to take, e.g.:
Dissolution of project
Renewal for another crediting period
Change of project participants
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50. TYPICAL –Full CDM Cycle Time Frame
Registration Process=►TOTAL 8 –12 Months [Existing
Methodology], 24 Months [for New Methodology]
Project Design Document: Large scale - 3 to 4 months, Small scale
PDD : 1 to 2 months
Host country approval : 2 to 4 months
Validation
Registration
�Adopt an approved methodology : about 2 months
�Propose a new methodology : 6 to 12 months
�Large scale PDD: 8 weeks after submission unless revision req.
�Small scale PDD: 4 weeks after submission unless revision req.
Accrual Process Accrual Process=►TOTAL about 14
Months
Data Generation –Duration [Say 1 year]
Certification –About 1 Month
rajkumarfcaInternational Trading & FINAL Receipt of funds–About 1 Month
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51. Factors determining CER price
Country’s rating in terms of country risk,
credibility and performance of NCDMA
The status of the project
The size of the project / offerings of CERs
The history of the project in honouring its
commitments to buyers
Credit rating and standing of the project
developers
No. of project participants
Reputation of project participants
The work done by the project proponents in
terms of sustainable development
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52. Industries having scope of
generation of CERs
Agriculture
Energy ( renewable & non-renewable sources)
Manufacturing
Fugitive emissions from fuels (solid, oil and gas)
Metal production
Mining and mineral production
Chemicals
Afforestation & reforestation
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53. Carbon Credit Supply Chain
(After the advent of Exchanges)
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56. Transaction Structures contd.
Payment on Delivery
Buyer
Seller
Forward contract @ floating price
Option payment – future delivery
Buyer
Seller
Option contract @ Option Purchase Price
Spot Delivery – One time payment
Buyer
Seller
One time delivery – No Forward Contract
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57. Accounting Issues
In case of self generated CERs
What is the stage at which the carbon credits meet the definition
of an ‘asset’?
If the carbon credits meet the definition of an asset, then what is
the nature of this asset?
If the carbon credits meet the definition of an asset, then when
should the carbon credits be recognised?
If an asset in respect of carbon credits is recognised, what
account should be credited?
How should carbon credits, if these are assets, be measured?
How should impairment of these assets be dealt with in terms
of identification and measurement of impairment
How should carbon credits be presented in the financial
statements?
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58. Accounting Issues
When should the carbon credits be derecognised? What
should be the treatment of gains and losses on derecognition?
When futures contracts of carbon credits are traded on an
exchange, an issue would arise as to whether these would be
considered as financial instruments within the meaning of AS
30, Financial Instruments: Recognition and Measurement
What would be the nature of future contracts, which are not
covered by AS 30/AS 31 and how they should be accounted
for?
For purchased CER
If an entity other than the originator/generator of carbon
credits, purchases carbon credits from the exchange for the
purposes of sale, it would be a current asset. Should it be
shown as inventories? Should Accounting Standard (AS) 2,
Valuation of Inventories, be applied to such inventories?
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59. Stages of asset recognition
when the project is registered entitling it to
earn CERs in the future, or
when the CERs are applied for, or
when the CERs are actually received, or
at any other point of time like sale of CER?
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60. Nature of Asset
Is it a monetary asset?
Or a financial asset?
Or an intangible asset?
Or any other type of asset like
inventory?
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61. Measurement of CER
Should these be measured at the cost of
earning the CERs at the time of initial
recognition or at fair value?
Should subsequent measurement be at cost
or fair value?
If these are to be measured at cost, what
should be considered as cost?
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62. Guidance Note on Accounting
for Self-generated Certified
Emission Reductions (CERs)
Issued by Institute of Chartered Accountants of India
(ICAI) on 11th February 2012
An entity should apply this Guidance Note for
accounting periods beginning on or after April 01, 2012.
Is CER an Asset?
CER is an ‘asset’ as per the definition given in the
‘Framework for the Preparation and Presentation of
Financial Statements’, issued by the ICAI
“An asset is a resource controlled by the enterprise as a
result of past events from which future economic
benefits are expected to flow to the enterprise.”
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63. Contd…
When CERs should be recognised in the financial
statements?
As per paragraph 88 of the Framework, the criteria for
recognition of an asset are as follows:
“88. An asset is recognised in the balance sheet when it is
probable that the future economic benefits associated
with it will flow to the enterprise and the asset has a cost
or value that can be measured reliably.”
Therefore CERs come into existence when these are
credited by UNFCCC in a manner to be unconditionally
available to the generating entity.
CERs should not be recognised before that stage.
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64. Contd…
What type of Asset is a CER?
Keeping in view the non-physical form of CERs,
the definition of ‘intangible asset’, as per
Accounting Standard (AS) 26, Intangible Assets,
is noted as follows:
“An intangible asset is an identifiable nonmonetary asset, without physical substance, held
for use in the production or supply of goods or
services, for rental to others, or for
administrative purposes.”
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65. Contd…
Therefore, though CERs are non-monetary
assets without a physical form, they do not
strictly fall within the meaning of ‘intangible
asset’ as per AS 26.
CERs are inventories of the generating entity as
they are generated and held for the purpose of
sale in the ordinary course of business.
Therefore, even though CERs are intangible
assets these should be accounted for as per the
requirements of AS 2 – Valuation of Inventories
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66. Contd…
Measurement of CERs?
CERs are inventories for an entity which
generates the CERs. Therefore, the valuation
principles as prescribed in AS 2 should be
followed for CERs. As per AS 2, inventories
should be valued at the lower of cost and net
realisable value.
Accordingly, CERs should be measured at cost
or net realisable value, whichever is lower.
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67. Contd…
Measurement of Underlying Assets related to
CERs?
For the generation of CERs, the generating entity
may create certain intangible and tangible assets.
For example, for reducing emissions, an entity
may carry out some research and development
which may result into creation of an intangible
asset.
Insofar as expenditure on research and
development is concerned, the entity should
apply AS 26, Intangible Assets.
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68. Contd…
In some cases, an entity may use a tangible asset
to reduce emissions. For example, an entity may
use incinerators for the purpose of reducing
carbon emissions. In respect of such
equipments/devices, the provisions of the
Accounting Standard (AS) 10, (Revised)
Tangible Fixed Assets (which is being
formulated)will apply
Any pollution control/emission reduction
devices installed by the generating entity for the
purpose of generating CERs are fixed assets and
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therefore they shall be accounted for as per AS 68
69. Contd…
An entity should present CERs as part of Inventories, in
the balance sheet, separately from other categories of
Inventories such as Raw Materials, Work-in-process,
Finished goods and others.
An entity should disclose the following information
relating to CERs in the financial statements:
a) No. of CERs held as inventory and the basis of
valuation.
b) No. of CERs under certification.
c) Depreciation and operating and maintenance costs
of Emission Reduction equipment expensed during
the year.
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70. Climate Exchanges
Climate exchanges have been established to provide a
spot market in allowances, as well as futures and options
market to help discover a market price and maintain
liquidity.
The spot market or cash market is a commodities or
securities market in which goods are sold for cash and
delivered immediately. The spot market for most
securities exists primarily on the Internet.
A futures exchange is a central financial exchange where
people can trade standardized futures contracts; that is, a
contract to buy specific quantities of a commodity or
financial instrument at a specified price with delivery set
at a specified time in the future.
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71. Contd...
Currently, futures contracts in carbon credits are actively
traded in the European exchanges
Carbon prices are normally quoted in Euros per tonne of
carbon dioxide or its equivalent (CO2e)
For trading purposes, one allowance or CER (certified
emission reduction) is considered equivalent to one
metric tonne of CO2 emissions.
These allowances can be sold privately or in the
international market at the prevailing market price. Each
international transfer is validated by the UNFCCC. Each
transfer of ownership within the European Union is
additionally validated by the European Commission.
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72. Exchanges trading in carbon
allowances
Chicago Climate Exchange
European Climate Exchange
Nord Pool
Powernext
Multi Commodity Exchange
National Commodity and Derivatives Exchange
Indian Energy Exchange
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73. Multi Commodity Exchange of
India Ltd. (MCX)
MCX is a demutualised nationwide electronic
multi commodity futures exchange set up by
Financial Technologies with permanent
recognition from Government of India for
facilitating online trading, clearing & settlement
operations for futures market across the country.
Headquartered at Mumbai
The exchange started operations in November
2003.
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74. Indian Energy Exchange Limited
(IEX)
IEX is India’s first nationwide, automated, and online
electricity trading platform.
It has been conceived to catalyse the modernisation of
electricity trade in the country by ushering in a
transparent and neutral market through a technologyenabled electronic trading platform.
IEX is a demutualised exchange (for profit shareholder
owned corporation)
IEX commenced operations on 27th June 2008
Regulator of IEX: Central Electricity Regulatory
Commission (CERC)
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75. Energy and Environment Interphase
Energy and environment are essential for sustainable
development. The poor are disproportionately affected
by environmental degradation and lack of access to
clean, affordable energy services.
Section 2(h) of the Energy Conservation Act 2001,
defines ‘Energy’ as –
“Energy means any form of energy derived from fossil
fuels, nuclear substances or materials, Hydro-electricity
and includes electrical energy or electricity generated
from renewable sources of energy or biomass connected
to the grid.”
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76. Contd…
About 20% of worlds energy is generated from coal and
about 60% of worlds energy is generated from oil and
natural gas.
Because of extensive use of fossil fuel, such as coal, oil
and natural gas, as primary source of energy today, the
harmful emissions of GHG (Green House Gasses) such
as Carbon Dioxide increases the GHG level and causes
the Greenhouse Effect and eventually global warming.
Scientists believes that global warming will cause the
average World temperature rise by one Degree Celsius
by the year 2020 and four Degree Celsius by the end of
21st century.
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77. Energy Conservation
Energy conservation is the practice of decreasing the
quantity of energy used. It can be achieved through
efficient energy use, where energy use is decreased
while achieving a similar outcome, or by reduced
consumption of energy services.
Energy conservation facilitates the replacement of nonrenewable resources with renewable energy. It is often
the most economical solution to energy shortages, and is
a more environmentally benign alternative to increased
energy production.
Investment in energy efficiency/energy conservation is
highly cost effective. It also avoids investment in fuel,
mining, transportation etc.
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78. Contd…
Energy requirement in India is increasing rapidly. Its
demand for commercial energy in 2020 is expected to
increase by 250% from today’s level.
Economic growth is desirable for developing countries,
and energy is essential for economic growth.
If India is to achieve the targeted growth in GDP, it would
need commensurate input of energy, mainly commercial
energy in the form of coal, oil, gas and electricity.
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79. Energy Conservation in India Energy Conservation Act 2001
Enacted by the Government of India considering the vast
potential of energy savings and benefits of energy
efficiency.
It was enacted in October 2001 but became effective
from 1st March, 2002.
The Act provides for the legal framework, institutional
arrangement and a regulatory mechanism at the Central
and State level to embark upon energy efficiency drive in
the country.
The Act is divided into 10 chapters, comprising of 62
sections and one Schedule.
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80. Contd…
Framework of the Act:
Chapter I: Preliminary
Chapter II:Bureau of Energy Efficiency
Chapter III: Transfer of assets, liabilities etc. of
Energy Management Centre to Bureau
Chapter IV: Powers and functions of Bureau
Chapter V: Power of Central Government to
facilitate and enforce efficient use of energy and
its conservation
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81. Contd…
Chapter VI: Power of State Government to facilitate and
enforce
efficient use of energy and its conservation
Chapter VII: Finance, Accounts and Audit of Bureau
Chapter VIII: Penalties and Adjudication
Chapter IX: Appellate Tribunal for Energy Conservation
Chapter X : Miscellaneous
The Schedule : List of Energy Intensive Industries and
other establishments specified as designated
consumers.
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82. Measures proposed by the Act
1.Energy Conservation
2. Energy audit of government buildings
3. Capacity building amongst departments to take up
energy efficiency programmes
The Thrust Areas :
a. Industry specific Task Forces.
b. Notifying more industries as designated consumers.
c. Conduct of energy audit amongst notified designated
consumers.
d. Recording and publication of best practises
e. Development of energy consumption norms.
rajkumarfcaf. Monitoring of compliance with mandated provision by
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83. Important Provisions Under the
Act
Energy intensive Industries
The Schedule to the Energy Conservation Act, 2001 gives
the List of Energy Intensive Industries and other
establishments specified as designated consumers.
Establishment of Bureau of Energy Efficiency
The Bureau of Energy Efficiency (BEE) is a statutory Body
under the Ministry of Power, Government of India
established with effect from 1st March, 2002.
The Energy Conservation Building Codes (ECBC)
The BEE launched the Energy Conservation Building Code
(ECBC) on 27th May 2007 in New Delhi. This code
addresses the design of rajkumarfcanew, large commercial buildings
to optimize the building’s energy demand.
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84. Contd…
Designated Consumers (DCs)
The Central Government may, by notification, in
consultation with the Bureau, specify, any user or class
of users of energy as a designated consumer for the
purposes of this Act. The Schedule to the Act provides a
list of the Designated Consumers. These DCs have to :
1. Appoint/Designate Energy Managers
2. Get Energy Audit conducted by Accredited Energy
Auditors
3. Implement Techno-Economic Viable Recommendations
4. Comply with norms of specific energy consumption
fixed
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5. Submit Report on Steps Taken
85. Contd…
Labeling Programme for Appliances
An energy labeling programme for appliances was
launched in 2006, and comparative starbased labeling
has been introduced for fluorescent tubelights, air
conditioners, and distribution transformers.
Energy Audits of Large Industrial Consumers
In March 2007, the conduct of energy audits was made
mandatory in large energy-consuming units in nine
industrial sectors. it is mandatory for the designated
consumers to get energy audit conducted by an
“accredited energy auditor” These units are also
required to employ “certified energy managers”, and
rajkumarfcareport energy consumption and energy conservation
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data annually.
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86. Environmental Laws
Complex and interlocking body of statutes, common
law, treaties, conventions, regulations and policies to
regulate the impacts of human activity on the natural
environment
The Indian constitution is amongst the few in the world
that contains specific provisions on environment
protection.
The Constitution states that it is the duty of the state to
‘protect and improve the environment and to safeguard
the forests and wildlife of the country’.
Organisations have a legal and moral duty to comply
with environmental laws and regulations.
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87. Sources of Environmental Law
Treaties
Bilateral
Multilateral
Protocols
Conventions
Customary International Law
Judicial decisions etc.
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88. United Nations Conference on the
Human Environment (UNCHE)
An international conference convened under
United Nations auspices held in Stockholm,
Sweden from June 5-16, 1972.
It was the UN's first major conference on
international environmental issues, and marked
a turning point in the development of
international environmental politics.
The conference acknowledged that the goal of
reducing human impact on the environment
would require extensive international
cooperation, as many of the problems affecting
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the environment are global in nature.
89. Contd…
The meeting agreed upon a Declaration
containing 26 principles concerning the
environment and development; an Action Plan
with 109 recommendations, and a Resolution.
Following this conference, the United Nations
Environmental Programme (UNEP) was
launched in order to encourage United Nations
agencies to integrate environmental measures
into their programs.
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90. Important Environmental Laws in
India
The Environment (Protection) Act, 1986
Water (Prevention and Control) Act, 1974
Air (Prevention and Control) Act, 1981
The Public Liability Insurance Act, 1991
The Biological Diversity Act, 2002
The Indian Forest Act, 1927
Forest (Conservation) Act, 1980
The Indian Wildlife Protection Act, 1972
The National Green Tribunal Act, 2010
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91. Environment Impact Assessment
(EIA)
The study to predict the effect of a proposed
activity/project on the environment.
Its a decision making tool - EIA compares
various alternatives for a project and seeks to
identify the one which represents the best
combination of economic and environmental
costs and benefits.
EIA systematically examines both beneficial and
adverse consequences of the project and ensures
that these effects are taken into account during
project design.
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92. Contd…
It helps to identify possible environmental
effects of the proposed project, proposes
measures to mitigate adverse effects and
predicts whether there will be significant
adverse environmental effects, even after the
mitigation is implemented.
Benefits of EIA - protection of environment,
optimum utilisation of resources and saving of
time and cost of the project.
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93. Stages of EIA Process
Screening
Setting Scope
Impact Analysis
Mitigation
Reporting
Review of EIA
Decision Making
Post-Monitoring
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94. Green Audit
Green audit is an official examination of the
effects a company has on the environment.
It can also be described as the inspection of a
company to assess the total environmental
impact of its activities or of a particular product
or process.
It is also widely known as Environmental Audit.
Its Aim is to review the measures taken by the
company to combat pollution.
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95. Compliance of Laws under Green
Audit
National Environment Laws, Rules and Regulations;
Notifications issued by the Government and the agencies
under them;
Standards issued by responsible bodies such as those for
Environment Impact Assessments (EIA), ISO 14001 for
Environment Management System, pollution control
orders and standards issued by oversight and
implementation bodies such as CPCB etc.;
Sanctions and permits issued in respect of the entity by
the regulatory bodies concerned;
EIA reports, reviews by independent organisations,
company’s environment policy etc.
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96. Green Audit Report
The Green Audit Report should be complete, precise,
accurate and balanced.
Contents should be easy to understand and free from
vagueness or ambiguity
It should include information which is supported by
complete and relevant audit evidence and be
independent, objective fair and constructive.
It should contain constructive and precise
recommendations.
It must be persuasive and instrumental in inspiring the
managements of entities to take corrective actions.
The violations and omissions should also be effectively
rajkumarfcamentioned in the report.
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97. Ministry of Environment & Forests
(MOEF)
Nodal agency in the administrative structure of
the Central Government for the planning,
promotion, co-ordination and overseeing the
implementation of India's environmental and
forestry policies and programmes
Also serves as the nodal agency for the United
Nations Environment Programme (UNEP),
South Asia Co-operative Environment
Programme (SACEP), International Centre for
Integrated Mountain Development (ICIMOD)
and for the follow-up of the United Nations
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Conference on Environment and Development 97
98. Contd…
The Ministry is also entrusted with issues
relating to multilateral bodies such as the
Commission on Sustainable Development
(CSD), Global Environment Facility (GEF)
and of regional bodies like Economic and
Social Council for Asia and Pacific
(ESCAP) and South Asian Association for
Regional Co-operation (SAARC) on
matters pertaining to the environment.
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99. Central Pollution Control Board
(CPCB)
Constituted in September, 1974
Is a body corporate having perpetual succession
and a common seal with power to acquire, hold
and dispose of property and to contract and may
by the aforesaid name sue or be sued.
Principal Functions of the CPCB
(i) to promote cleanliness of streams and wells in
different areas of the States by prevention,
control and abatement of water pollution, and
(ii) to improve the quality of air and to prevent,
control or abate air pollution in the country.
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100. State Pollution Control Board
(SPCB)
Constituted by the State Government by
notification in the official gazette.
With regard to a Union Territory, a SPCB is not
constituted. The CPCB exercises the powers and
performs the functions of a SPCB for that Union
Territory, however it may delegate its powers.
SPCB will be a body corporate having perpetual
succession and a common seal with power to
acquire, hold and dispose of property and to
contract and may by the aforesaid name sue or
be sued
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101. National Green Tribunal
Established on 18.10.2010 under the National Green
Tribunal Act 2010
Objective - Effective and expeditious disposal of cases
relating to environmental protection and conservation of
forests and other natural resources including
enforcement of any legal right relating to environment
and giving relief and compensation for damages to
persons and property and for matters connected
therewith or incidental thereto.
It is a specialized body equipped with the necessary
expertise to handle environmental disputes involving
multi-disciplinary issues.
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102. Contd..
The Tribunal will not be bound by the procedure laid
down under the Code of Civil Procedure, 1908, but shall
be guided by principles of natural justice.
The Tribunal is mandated to make and endeavour for
disposal of applications or appeals finally within 6
months of filing of the same.
Initially, the NGT is proposed to be set up at five places
of sittings and will follow circuit procedure for making
itself more accessible.
New Delhi is the Principal Place of Sitting of the
Tribunal and Bhopal, Pune, Kolkata and Chennai shall
be the other 4 place of sitting of the Tribunal.
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