With increasing concerns over green house gases (GHGs) and climate change, India’s revenues from carbon trade can grow to around $10 billion by 2012, says Dun & Bradstreet (D&B), a business information company. “The Kyoto Protocol initiative, undertaken to control the increase in the emission of GHGs, presents tremendous opportunity for trade in Credit Emission Reduction (CER),” said Dun & Bradstreet India CEO Manoj Vaish.“The carbon market has grown 3 times from $10 bn in 2005 to $30 bn globally in 2006 and is bound to grow even further as participation increases from other countries that are not a part of the Kyoto Protocol under the Clean Development Mechanism,” said Vaish.The CDM is an arrangement under the Kyoto Protocol allowing industrialised countries with a greenhouse gas reduction commitment to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries. The CDM allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in industrialised countries.Speaking on the future of carbon markets, Prodipto Ghosh, distinguished fellow of The Energy and Resources Institute said, “While the global carbon market is expected to be much larger after 2012, the 850 odd projects that are in the pipeline in India itself, will generate revenues of about Rs 65,000 crore.”Commenting on the Bali Action Plan (BAP), Ghosh said, “The BAP will require developed countries to reduce their GHG emissions by more than 25 to 40 per cent with at least 50 per cent reduction in global GHG emission by 2050. As the bulk of the projects are in India, China and Brazil, a more equitable regional distribution will be considered. The resistance by US to outsource carbon credits will also have to gradually reduce and hence the possibilities of an upstream cap and trade and new outsourced service sector are being discussed.”On the importance of understanding the exchange mechanism, Anik Ajmera, chief of Business Development, Asia Carbon Exchange said, “India issues the maximum credits but only a small percentage is traded. Understanding expectations of buyer and seller as well as provide visibility of projects to get better prices is very important.”
