Green investment: Turning a new Kyoto leaf in New Delhi

There is a link between climate and money and it will get clearer when New Delhi hosts the Conference of Parties (COP)-8 of the UN Conventio...

There is a link between climate and money and it will get clearer when New Delhi hosts the Conference of Parties (COP)-8 of the UN Convention on Climate Change on October 23. More than 5000 delegates will discuss how best to check global warming. The action plan to prevent this would include business opportunities from the industrialised world to countries like India.

A preparatory meeting with 33 countries began today. While COP-7, held in Bonn, had settled some of the institutional frameworks, COP-8 is expected to develop a framework for action called a ‘‘Delhi Declaration.’’

The practical way in which the Kyoto protocol, a part of the climate change convention, works is through the Clean Development Mechanism (CDM). Developing countries are supposed to reduce their emissions by using clean technologies and the cost is borne by industrialised countries since they have been polluting for a longer period. In turn, developed countries get points (credits) for investing in developing countries for upgrading their technology.

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Some of the areas that have already been identified are power generation — its renovation and modernisation, introduction of renewable energy like wind power.

Investments are also likely to pour in for increasing industrial efficiency — iron and steel, pulp and paper and replacement of industrial motors.

Each of these is estimated to reduce 500-850 thousand tonnes of carbon monoxide per year.

The other aspect is that since US and Australia are not going to be part of the Kyoto protocol, the market for CDMs has shrunk. However, participants say that EU, Japan and Canada are there to pump in money in return for credits. It is the credit value that will suffer and not the volume.

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As a dry run, some trading is already going on and the value of one tonne of carbon is between one and five dollars. If developed countries want to save one tonne of carbon in another country, they have to pay at this rate. If the US had participated, this would have been at least 20 US dollars.

Apart from CDM, there is another voluntary fund called the Global Environment Facility. ‘‘We are going to ask for money to be increased under the GEF ,’’ said P V Jaikrishnan, Secretary, Environment. What is at stake is the fact that developing countries cannot be made to stunt their development activity in a plea to clean the environment. Outlining the intentions of COP-8, Environment Minister T R Baalu said: ‘‘The stress this time is to actually set the implementation strategy so that the entire process of reducing green-house gases can begin.’’

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