1. JITHIN
KRISHNAN
S1 MBA
SMBS

2.  Global Warming and Climate Change
 Deforestation
 Energy Crisis
 Ozone Layer Depletion
 Pollution
 Waste
 Oil Spills
 Overpopulation
 Nuclear Issues
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3.  ACID RAIIN
 Carbon Credit Definition
 UNFCC
 KYOTO PROTOCOL
 Carbon credit(s)
 Mechanism
 Pricing
 Avenues for Earning
 Importance
 Indian Scenario
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4. ACID RAIN
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5. JITHIN KRISHNAN 5

6.  Refers to what scientists call acid deposition.
 Caused by airborne acidic pollutants and has
highly destructive results.
 One of the most important environmental
problems of all, cannot be seen. The invisible
gases that cause acid rain usually come from
automobiles or coal-burning power plants.
 Moves easily, affecting locations far beyond
those that let out the pollution.
 Can have harmful effects on plants, aquatic
animals, and infrastructure through the process
of wet deposition.
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7. 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.
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8. 1 CARBON CREDIT ≈ 1 ton of CO2 or its
equivalent
greenhouse gas
(GHG) which is an entitled
certificate by UNFCCC
(United Nations
Framework
Convention on
Climate Change)
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9. A credit for reducing 1 ton of
CO2 (Green House Gases) from the
atmosphere

10.  Carbon credits create a market for reducing
greenhouse emissions by giving a monetary
value to the cost of polluting the air.
Emissions become an internal cost of doing
business and are visible on the balance sheet
alongside raw materials and other liabilities
or assets.
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11. Birth of UNFCCC
In 1992, Rio
Brazil
Objective…
Green House Gases should be stabilized
within a time frame.
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12.  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
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13.  Convention is based on three principles
– Common but differentiated responsibility
– Precautionary approach
– Sustainable Economic Growth and
Development
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14. The KYOTO PROTOCOL…
An agreement negotiated in 11
December 1997 in Kyoto, Japan
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15. The Kyoto Protocol……
Objective
Reduction of Green House Gases
emission by developed countries in the
The First Commitment Period
(2008-2012)
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16.  The Kyoto Protocol is an international agreement
linked to the United Nations Framework
Convention on Climate Change(UNFCCC) passed
on 11 December 1997 in Kyoto, Japan but came in
force on 16 February, 2005.
 Countries that ratify this protocol commit to
reduce
(a) their emissions of carbon dioxide and
(b) five other greenhouse gases, or
(c)engage in emissions trading if they maintain
or increase emissions of these gases.
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17.  It sets legally binding targets for emissions of
6 major greenhouse gases in industrialized
countries and defines a specific time period
for reaching those targets.
 It creates a new commodity (carbon) that
can be traded through new international
market-based mechanisms.
 It will facilitate the initials of sustainable
development while providing additional
support to developing nations to achieve this
goal.
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18. KYOTO Protocol
Annex I
Non-Annex I
Not ratified JITHIN KRISHNAN 18

19. Annex I Non -Annex-1
Australia(Not ratified) India
Austria Bangladesh
Belgium Brazil
Monaco China
Canada Afghanistan
Netherland Algeria
New Zealand Nepal
United Kingdom Argentina
Germany Bolivia
Spain Srilanka
Switzerland Pakistan
Greece Malaysia
JITHIN KRISHNAN Mauritius 19

20.  Clean Development Mechanism (CDM)
 Joint Implementation
 Emissions Trading
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21. Clean Development Mechanism (CDM)
Sets a project
Developed Developin
country g Country
(needs CC)
Earns carbon
Sells carbon credits credits called
Certified
Emission
Reduction
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22. Joint Implementation
Sets a project
Developed Developed
country A country B
(needs CC)
Earns carbon
Sell carbon credits called
credits Emission
Reduction Units
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23. Emission Trading
Payment
for CC
Developed
country A Developed
(needs CC) country B
Earns carbon credits
Sell these called
carbon credits
Assigned Amount
Units
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24. Currently there are 5 Environmental
Exchanges, trading in Carbon Credits
EUROPEAN CLIMATE
EXCHANGE
POWER NEXT
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25.  Risk allocation
 Creditworthiness & experience of project
sponsor
 Viability of underlying project
 Contract structure (e.g. upfront payments
incur discount, penalties for non-
delivery, ability to pay penalties)
 Cost of validation & potential certification
 Host country support & willingness to
cooperate
 Additional environment and social benefits
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26.  The amount of carbon dioxide equivalent (CO2e)
being traded globally in 2009 would value at USD
157 billion.
 The global carbon market that has been growing
by 105 per cent and 84 per cent in 2007 and
2008 respectively.
 India is expected to be one of the top three
largest players in the Carbon Credits market by
2010 end where business is estimated to grow by
US$ 5 billion.
 The average annual Certified Emission Reduction
(CERs) from registered projects during July 2008
to February 2009 grew by 20.92 per cent from
218,345,930 to 264,022,976 respectively.
 $ 60 Billion was the size of the global carbon
credit market in 2007.
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27.  The average price paid to offset one ton of CO2
or equivalent GHGs rose 49% from 2006 to 2007.
 The percentage of projects sourced from Asia
nearly doubled, from 22% in 2006 to 39% in 2007.
 More than 3.6 million CER’s registered.
 Of the 93 CDM projects registered, 23 are from
India.
 Almost 50% of projects in the pipeline are from
India.
 Over 75% of India’s CDM potential lies in the
energy sector.
 By 2012 Indian companies are expected to
generate at least US$ 8.5 billion
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28. India’s Stance in Carbon Credits
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29. India along with China, lead countries in earning
Carbon Credit
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30. India pocketed Rs 1,500
crores in the year 2005
just by selling carbon
credits to developed-
country clients.
India has generated 30 million
Carbon credits & 140 million
are in pipeline
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31.  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.
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32. • Sector-wise break-up
No. of Projects
22% Energy Efficiency
29%
Forestry
Fuel switching
Industrial Process
MSW
5% 1% Renewable
Renewable (Biomass)
35% 6%
2%
Total No. of Projects = 1578
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33. CERs up to 2012
14%
Energy Efficiency
34%
Forestry
Fuel switching
20% Industrial Process
MSW
Renewable
Renewable (Biomass)
2% 2%
10%
18%
Total No. of CERs = 633401547.39
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34.  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
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35. GUJARAT FLOUROCARBONS Ltd.
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36.  Andhyodaya Green  Reliance Energy Ltd.
Energy  Tata Motors Limited
 Grasim Industries Ltd.  Tata Steel Limited
 Indo Gulf Fertilizers  Bajaj Finserv Limited
 Indus Technical &  Dhariwal Industries
Financial Consultants Ltd
Ltd  Tata Power Company
 Madhya Pradesh Rural Limited
Livelihoods Project  BlueStar Energy
 Rajasthan Renewable Services Inc.
Energy Corporation  Valera Global Inc.
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37.  CC provide an additional source of revenue;
 CC improves the return on their investments;
 CC boost the economic feasibility of
projects;
 CC accelerate project implementation.
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