DEMYSTIFYING CARBON CREDITS

CARBON CREDIT CERTIFICATE

NEED FOR IT…

Helps Capping total annual emissions

Assigns a monetary value to the carbon emitted

Gives business and economic incentives to Organization

who reduce emission.

Necessitates adoption of clean technologies by the

developed nations .

Helps developing nations get foreign investment for

developing advanced clean technologies .

CARBON CREDITS

1992• UNFCCC

establishes Framework

1997• Treaty

negotiated in Kyoto (Japan)

• Opened for signature

2005• Agreement

Came into Existence

KYOTO: BACKGROUND

183 Countries ratified as of Jan 2009

This represents about 64% of industrialized

country emissions

Developed countries have a target to reduce GHG

emissions by 5.2%

India, China, and Brazil are classified as emerging

countries and hence exempted from this protocol

KYOTO PROTOCOL

UNFCC Kyoto Protocol

Project Based

Clean Development

Mechanism

Joint Implement

ation

Allowance Based

International Emission Trading

KP MECHANISMS

Clean Development Mechanism

34%

26%10%

7%

3%

2% 18%

CDM Project Statistics

ChinaIndiaBrazilMexicoMalaysiaChileOthers

Sales of CER from Developing to Developed country

Certified Emission Reductions (CER)

1430 Registered projects reducing 550 Mton CO2

Source : UNFCCC Site

JOINT IMPLEMENTATION

One industrialised country to another

Emission Reduction Units (ERU)

203 Projects reducing 21 Mton CO2

48%

16%7%

5%

5%5%

4% 10%

JI Project Statistics

RussiaUkraineBulgariaHungaryPolandLithuniaGermanyOthers

Source : UNFCCC Site

Cap and Trade

Assigned Amount Units (AAU)

EU ETS, UK ETS, CCX

International Emissions Trading

Businesses that don’t reduce emissions enough must buy creditsMONEY

CREDITS

GHG emission cap (set by authorities)

Cap is lowered over time

The European Union Emission Trading Scheme is the largest under Kyoto

PROJECT BASED TRANSACTIONS

Source : UNFCCC Site

THANK YOU !!!