Carbon Trading

Amidst growing concern and increasing awareness on the need for pollution control, the concept of carbon credit came into vogue as part of an international agreement, popularly known as the Kyoto Protocol. Carbon credits are certificates issued to countries that reduce their emission of GHG (greenhouse gases), which causes global warming.

It is estimated that 60-70% of GHG emission is through fuel combustion in industries like cement, steel, textiles and fertilizers. Some GHG gases like hydro fluorocarbons, methane and nitrous oxide are released as by-products of certain industrial process, which adversely affect the ozone layer, leading to global warming.

What is the Kyoto protocol?
Kyoto Protocol is a voluntary treaty signed by 141 countries, including the European Union, Japan and Canada for reducing GHG emission by 5.2% below 1990 levels by ’12. However, the US, which accounts for one-third of the total GHG emission, is yet to sign this treaty. The preliminary phase of the Kyoto Protocol is to start in ’07 while the second phase starts from ’08. The penalty for non-compliance in the first phase is E40 per tonne of carbon dioxide (CO2) equivalent. In the second phase, the penalty will be hiked to E100 per tonne of CO2.

How does trading in carbon credit (CC) take place?
The concept of carbon credit trading seeks to encourage countries to reduce their GHG emissions, as it rewards those countries which meet their targets and provides financial incentives to others to do so as quickly as possible. Surplus credits (collected by overshooting the emission reduction target) can be sold in the global market. One credit is equivalent to one tone of CO2 emission reduced. CC is available for companies engaged in developing renewable energy projects that offset the use of fossil fuels.

Developed countries have to spend nearly $300-500 for every tonne reduction in CO2, against $10-$25 to be spent by developing countries. In countries like India, GHG emission is much below the target fixed by Kyoto Protocol and so; they are excluded from reduction of GHG emission. On the contrary, they are entitled to sell surplus credits to developed countries.

It is here that trading takes place. Foreign companies who cannot fulfill the protocol norms can buy the surplus credit from companies in other countries through trading.

Thus, the stage is set for Credit Emission Reduction (CER) trade to flourish. India is considered as the largest beneficiary, claiming about 31% of the total world carbon trade through the Clean Development Mechanism (CDM), which is expected to rake in at least $5-10bn over a period of time.

Carbon credit – thrust for cleaner technologies
Trading carbon credits between developing and developed nations will soon become a reality. Companies in India will gain monetarily and be able to put up projects that are eco-friendly.

Come Globalization, and trade takes on different hues. The latest comes from quite unconventional quarters – trading of carbon credits or more specifically carbon dioxide credits between developing and developed nations. When global warming is the watchword and reducing carbon dioxide emission is the buzzword, can trade be far behind?

What does a company in a developing country gain by trading carbon credits?
Monetary gain is of course the first and foremost. Every tone of CO2 not emitted is considered as one credit and every carbon credit fetches the company $3-6. The remuneration continues year after year. And the best part is that it is quite easy to implement technologies known to reduce emissions provided the project meets certain criteria.

The companies trading credits have two options to choose from depending on the life of the project – fixed crediting period of ten years or first period of seven years extendable twice for a total period of 21 years.

Advantage of implanting cleaner and sustainable technologies is the ability to avail funding from Prototype carbon Fund which is under the aegis of the World Bank. The fund is formed by contributions from many developed nations. The only catch being that the carbon credit trading will be at a discounted price.

With the European Union Emission Trading Scheme about to be passed any time by the European Union, the Clean Development Mechanism is here to stay. And Indian companies may well take the lead to use cleaner technologies to earn credits and secure funds.

What is Carbon Neutrality?
Carbon neutrality is simply planting enough greenhouse gas absorbing trees to offset the amount of GHG gases you or your business produce each year. Most calculate the equivalent CO2 and calculate the amount of trees required to offset this. The average US family of 4 produces 2 to 5 tons of CO2 per month. This would require planting up to 30 trees to offset. Some expert’s estimate it could even is more if you include the industrial cost of the products consumed, but we are basing this on the growing responsibilities of business becoming CARBON NEUTRAL also.

You can help stop global warming.
The new phrase being tossed around is “carbon footprint”. This can be translated into the amount of CO2 equivalent you produce each year living your normal life. How will you personally offset your greenhouse gases and help stop global warming? There are many different solutions advocated. We propose the most natural solution. Plant trees.

The average North American produces 22 tons of CO2 per year. One tree, planted in the dry tropics of Central America, over 12 to 20 years, can convert 0.82 tons of this CO2 into carbon and oxygen. “So what?” you say. This means the average American would have to plant 27 trees per year, to become “carbon neutral”. It will still take 12 to 20 years to do its job. The time to start is now. “Carbon Neutrality” isn’t just a slogan; it’s a way of life. You adapt. You make changes. You decide to make a difference by deciding how you will live each day of your life. That’s how you help stop global warming. One day at a time. One tree at a time.

Here is where you begin your journey towards Carbon Neutrality. It ends when you decide you have reached a comfort zone; when you have offset enough greenhouse gases to feel good about yourself, or about your organization. Start feeling good today by planting a tree.

Carbon dioxide (CO2) is a naturally occurring and human-generated gas that aids in warming the surface of the planet by trapping solar heat in the Earth’s atmosphere. This is a good thing because it keeps our planet warm enough for animal and human habitat. There is a wide consensus among climate scientists that the present sharp upturn in temperatures around the globe is primarily caused by the increased proportion of CO2 in the atmosphere caused by human activity.

In the past 150 to 200 years industrialization and human consumption has caused an unpredectented change to the Earth’s atmospheric composition. By burning fossil fuels such as coal, gas and oil and clearing forests we have dramatically increased the amount of carbon dioxide in the Earth’s atmosphere and temperatures are rising.

A current scientific opinion on climate change is that recent warming is largely human-caused, although others differ. Across the globe, we are seeing climate-related shifts, including melting glaciers, rising sea levels, plant and animal habitat degradation, and the significant financial impact to businesses and individuals. To put these risks in context consider the following:

Severe climatic events are currently costing US$150 billion a year. 200 million people could be affected by rising sea levels. Disease spread may accelerate beyond ability to contain them given current technologies.

While there may be some uncertainty in the cause and likelihood of catastrophic consequences from global warming, the imperative exists today to take action. This site is dedicated to furthering the dissemination of information, discussion and resources to contain anthropogenic global warming.

If you are looking for a good starting place, start by learning more about what you can do to make a difference.

What are Greenhouse Gases?

Are CO2 Levels Really Rising?

How Much Hotter Is It?

So What’s Happening?

How Much Hotter Will it Get?

Who is Responsible for CO2 Emissions? We are!

How Much Worse is it today?

What are the Sources?

Solutions Exist to Mitigate Industrial CO2 Emissions

You Can Make a Difference

Become Aware. Understand the impact you are having in your daily life. The average American emits about 50 tons of carbon dioxide per year. Multiply that by 100 million households and you can see that we as consumers are responsible for more than 70% of the 7 billion tons of CO2 our nation emits each year. Take a survey to estimate the annual CO2 emissions that are generated by the things you do every day.

Open Your Mind. There’s a lot to learn about this complex issue, but don’t letthat disuade you from taking some simple steps to learn more.

Small Changes Make A Big Difference. There are many things you can do to change your daily activities so slightly that you’ll hardly notice the difference. With just a few non-life changing steps, you could cut your CO2 by 60%.

Wrap your water heater in an insulation blanket. You’ll save 1,000 pounds of carbon dioxide a year with this simple action. You can save another 550 pounds per year by setting the thermostat no higher than 120 degrees Fahrenheit.

Use less hot water. It takes a lot of energy to heat water. You can use less hot water by installing a low flow showerhead (350 pounds of carbon dioxide saved per year) and washing your clothes in cold or warm water (500 pounds saved per year) instead of hot.

Use a clothesline instead of a dryer whenever possible. You can save 700 pounds of carbon dioxide when you air dry your clothes for 6 months out of the year.

Unplug electronics from the wall when you’re not using them. Even when turned off, things like hairdryers, cell phone chargers and televisions use energy. In fact, the energy used to keep display clocks lit and memory chips working accounts for 5 percent of total domestic energy consumption and spews 18 million tons of carbon into the atmosphere every year!

Only run your dishwasher when there’s a full load and use the energy-saving setting.You can save 100 pounds of carbon dioxide per year.

Be sure you’re recycling at home. You can save 2,400 pounds of carbon dioxide a year by recycling half of the waste your household generates.

Buy recycled paper products. It takes less 70 to 90% less energy to make recycled paper and it prevents the loss of forests worldwide.

Plant one tree a month. A single tree will absorb one ton of carbon dioxide over its lifetime. Shade provided by trees can also reduce your air conditioning bill by 10 to 15%.

Get a home energy audit. Many utilities offer free home energy audits to find where your home is poorly insulated or energy inefficient. You can save up to 30% off your energy bill and 1,000 pounds of carbon dioxide a year.

Switch to green power. In many areas, you can switch to energy generated by clean, renewable sources such as wind and solar.

Buy fresh foods instead of frozen. Frozen food uses 10 times more energy to produce.

Seek out and support local farmers markets. They reduce the amount of energy required to grow and transport the food to you by one fifth.

Buy organic foods as much as possible. Organic soils capture and store carbon dioxide at much higher levels than soils from conventional farms. If we grew all of our corn and soybeans organically, we’d remove 580 billion pounds of carbon dioxide from the atmosphere!

Avoid heavily packaged products. You can save 1,200 pounds of carbon dioxide if you cut down your garbage by 10%.

Eat less meat. Methane is the second most significant greenhouse gas and cows are one of the greatest methane emitters. Their grassy diet and multiple stomachs cause them to produce methane, which they exhale with every breath.

Be Mobile, But Tread Lightly. Almost one third of the carbon dioxide produced in the United States comes from cars, trucks and airplanes. Reduce the number of miles you drive by walking, biking, carpooling or taking mass transit wherever possible. Avoiding just 10 miles of driving every week would eliminate about 500 pounds of carbon dioxide emissions a year!

Start a carpool with your coworkers or classmates. Sharing a ride with someone just 2 days a week will reduce your carbon dioxide emissions by 1,590 pounds a year.

Keep your car tuned up. Regular maintenance helps improve fuel efficiency and reduces emissions. When just 1% of car owners properly maintain their cars, nearly a billion pounds of carbon dioxide are kept out of the atmosphere.

Check your tires weekly to make sure they’re properly inflated. Proper inflation can improve gas mileage by more than 3%. Since every gallon of gasoline saved keeps 20 pounds of carbon dioxide out of the atmosphere, every increase in fuel efficiency makes a difference!

Try car sharing. Need a car but don’t want to buy one? Community car sharing organizations provide access to a car and your membership fee covers gas, maintenance and insurance.

Try telecommuting from home. Telecommuting can help you drastically reduce the number of miles you drive every week.

Fly less. Air travel produces large amounts of emissions so reducing how much you fly by even one or two trips a year can reduce your emissions significantly. You can also offset your air travel by investing in renewable energy projects.