Wednesday, October 25, 2006

carbon equivalent credits?

25th oct 2006

i dont entirely understand what the heck is going on with this. it sounds vaguely useful, but does someone knowledgeable enlighten the rest of us? is this like taking on carbon emissions into india and selling that to western companies? or is this actually useful and sensible? or is it another hare-brained idea like shipping high-quality iron ore to china?

http://www.indianexpress.com/story/15394.html

4 comments:

Ghost Writer said...

I have not studied this in depth - but here is what I know... another explanatory article here

To encourage adoption of eco-friendly technologies - the UN created a 'stock-excange' for Carbon Equivalent Credits (CER) as part of the Kyoto Protocol. Essentially, businesses in the West will seek to comply with certain emission norms and emission targets. A business can earn credits for polluting below its mandated target - which it can then sell in an open market to another business that is not clean or is polluting excessively (i.e above it's target) Businesses can also earn credit by deploying technologies in developing world that reduces emissions. For instance if the Limey's put up a wind energy based plant in Kerala - they can claim to have earned a certain amount of CER. They can either sell the CER or use it to write off fines etc. in case of emission norms they have not met.

The THEORY is that gains will be two-fold
1- adding a revenue stream will encourage business to adopt non-polluting technologies
2- The western, developed world can accept stiffer targets - hence giving developed countries a sompetitive edge in the CER exchange. In other words - this system works like a handicap in golf. For the same course - two players will be allowed different scores as par.
An added benefit of item 2-) is that countries like India and China can 'start clean' when it comes to the consumption of energy and not end up polluting the world like the west did in it's development cycle.

The Reality (my analysis only) is that IT IS A WAY FOR THE WEST TO STICK COSTS OF DEPLOYING EXPENSIVE TECHNOLOGY TO COUNTRIES LIKE INDIA WHILE CONTINUING TO POLLUTE THEMSELVES

The biggest hole of course is that the Yanks just up and left from the Kyoto deal anyways - and who in the world cares for the Atlanticists and Canadians?

Overall, I am all for clean energy - for another simple reason - reduction of our import bill and chopping the Arab hand that strangles our foreign policy. With the Yanks out of Kyoto - the markets for CER may not be big enough incentive for us .....

Santhosh said...

http://en.wikipedia.org/wiki/Emissions_trading

It seems that trading emission credits might not help reduce emissions in total.

Its like announcing a price for crimes.
What if the crime becomes affordable ?

At least for now, this trading might allow stringent emission limits.

Non Carborundum said...

I think this is just normal Carbon trading wherein developed countries which have signed onto the Kyoto Protocol on greenhouse gas emissions reduction can either reduce emissions in their own country or finance emission reduction in developed countries. Since it costs them $50/kg of CO2 on an average in the developed world they prefer financing CDM projects in developing countries where the cost in $15/kg of CO2. I'm not too sure about this though. Would someone please correct me if I'm wrong?

Non Carborundum said...

Oh sorry..its $50/ton and $15/ton equivalent of CO2.