CARBON EMISSIONS &

CARBON CREDIT TRADING

PRESENTED TO:
PREPARED BY:
Prof. RajseeJoshi Tanmay
Kotak
 CARBON EMISSIONS AND
CARBON FOOTPRINT
• polluting carbon substances released
into atmosphere
• Responsible for about 80% of the
problems related to Greenhouse Gas
Emissions. 
• Carbon Dioxide Emissions and carbon
dioxide are one of the six chemicals
that also include; 
– methane and Biomethane
– nitrous oxide
– hydrofluorocarbons 
– perfluorocarbons 
– sulfur hexafluoride
The USA has the highest per
capita emissions of carbon but
China and India and other Asian
countries have huge populations –
putting increased pressure on
carbon emissions
 CARBON TRADING
• An administrative approach used to
control pollution by providing
incentives for achieving reductions in
emissions of pollutants.
• Also known as emission trading.
• Overall goal of an emissions trading
plan is to minimize the cost of
meeting a set emissions target.
•
•
 KYOTO PROTOCOL
• The protocol was initially adopted on 11
December 1997 in Kyoto, Japan and entered
into force on 16 February.


• A protocol to the United nations framework

convention on climate change (UNFCCC) aimed
at fighting global warming.


• As on November 2009,187 countries have signed

and ratified the protocol.
•
KYOTO PROTOCOL (CONTD.)
• Under the protocol all the countries ( called
‘Annex I countries”) commit themselves to
reduction of greenhouse gases.

§
• US is the only nation which has not ratified it as
they believe that 5% reduction will “wreck the
American economy”.

§
• The target agreed upon was an average reduction
of 5.2% from 1990 levels by the year 2012.
 CAP AND TRADE
 Cap - a set limit on the amount of a
pollutant that can be emitted .
 Trade - The transfer of allowances is
referred to as trade .
• Companies that need to increase
emission allowance must buy credits
from those who pollute less.
• In effect, buyer is paying a charge for
polluting, while seller is being
rewarded for having reduced
emissions by more that was needed.
 CAP AND TRADE (CONTD.)
• Carbon credits are measured in tonnes of carbon
dioxide.
 1 credit = 1tonne of CO2


• In developing countries like India, the emission levels

are much below the target fixed by the Kyoto
Protocol. So, they are excluded from reduction of
GHG emission. On the contrary, they are entitled to
sell surplus credits to developed countries. The
European countries and Japan are the major buyers
of carbon credits.
•
• This is what makes trading in carbon credits such a
great business opportunity.
•
• Foreign companies which cannot fulfill the protocol
Company A can reduce Company B can reduce
1000 tons CO2E at 1000 tons CO2E at
$2/ton = $2000 $6/ton = $6000

SELL BUY
1000 tons CO2E at $4/ton
= $4000

$2000 Profit $2000 Savings

Company A - Seller Company B - Buyer
COPENHAGEN SUMMIT 2009

• Held at the Bella Center in

Copenhagen at Denmark between
7th Dec-16th Dec 2009
 OVERALL IMPACT OF CARBON
TRADING
• By reducing carbon emissions,
greenhouse gases in the
atmosphere will be reduced
slowing heat entrapment.


• Companies that emit excess carbon

dioxide will be penalized and forced
into taking more care.
•
 GUIDEILNE TO REDUCE OUR
CARBON FOOTPRINT
• Compact fluorescent bulb
• Product with excessive packaging
• Recycle more
• Turn off electronic devices
• Drive less
• Check your tire
• Plant a tree
THANK YOU