CII's Conference on Carbon Credit Emphasizes use of CDMs

In view of this growing global issue of global warming and climate change, the Conferation of Indian Industry (CII-Northern Region) organized the Conference on Carbon Credits in the month of May. The theme address was delivered by Rajesh Srivastava, Managing Director, Rabo India Finance Ltd. He said that climate change had become more and more evident, which is all the more reason for Kyoto to be implemented at a faster pace. Throwing light on the carbon market size, he shared that, it was 40 billion Euros in 2007 which was likely to grow up to 60-70 billion Euros in 2008. Expressing his concern for Kyoto ending in 2012, he gave an insight on the various hindrances in continuing it further which included low participation from various countries, complex processes, long time periods in processing of applications, and inadequate consultation procedures to resolve questions faster. In the near future, PSUs would also need to focus in this direction while the financial sector would need to be more supportive for the interested companies to join this protocol further, he added.

While dwelling on the current position in the energy sector, Surender Mehta, Senior Vice President, RRB Energy Ltd commented that in India though carbon trading happens on MCX and NCDEX, the participation was not very encouraging because of hosts of factors ranging from absence of big financial players like banks and mutual funds; relative lack of awareness among corporate and stakeholders and unavailability of trained skilled manpower.

Salil Singhal, Chairman CII Northern Region & Chairman Secure Meters Ltd, while addressing, shared concerns about the challenges which come in the way of leveraging this huge opportunity. The Indian Government had taken a stand in global fora that developmental issues and concerns should be integrated into climate change framework, if the issues were to be effectively addressed. GHG mitigation and adaptation strategies should be designed to allow developing countries to achieve rapid economic growth along with meeting millennium development goals (MDGs) having sufficient resources to support adaptation efforts.

In the global response to climate change, India and other developing countries have to find solutions which can meet the MDGs, reduce poverty, which would lead to economic and industrial growth. This is all to be achieved without sacrificing the long-term objectives of energy security and climate change. India continuous to be an emerging global hub for further energy efficiency in industry, buildings, residential and commercial sectors playing a key role in the identification, development and utilisation of new and renewable energy sources.
Indian industry is actively participating in CDM projects. Two hundred eighty-two projects registered by the CDM Executive Board had already resulted in over 28 million tonnes of certified CO2 emission reduction, and have directed further investments in renewable energy and energy efficiency projects.

Amitabh Nangia, Chairman, CII UP State Council & Director, Tricolite Electricals Ltd, shared his perspective on the upcoming trends in Carbon Trading as well as its contribution to the exchequer. He stated that India had cornered nearly 43% of the carbon credits (CERS) issued so far by the CDM executive board, the highest international body under the Kyoto Protocol to register projects and issue credits. Under the Kyoto Protocol, governments and companies in the European Union can use these credits to offset their carbon emissions and meet part of their reduction targets.

Carbon credits were generated mainly in the developing countries because of the lower project cost. The Clean Development Mechanism (CDM) enabled developing countries to participate in joint greenhouse gas (GHG) mitigation projects. CDM enables these countries to meet their reduction commitments in a flexible and cost-effective manner. It allows public or private sector entities to invest in GHG mitigation projects in developing countries. In return the investing parties received credits or certified emission reductions (CERs) which they could be used to meet their targets under the Kyoto Protocol. While investors profit from CDM projects by obtaining reductions at costs lower than in their own countries, the gains to the developing country host parties were in the form of finance, technology, and sustainable development benefits.

The Conference included thought provoking presentations and discussions by persons of eminence and key companies engaged in the rural retail sector:

• Mahendra Kumar, Chief Executive, Reliance Energy Trading Ltd

• Bishal Thapa, Managing Director, ICF International

• Jotdeep Singh, Director & Head, India & Regional Co-ordinator Asia, Renewable Energy & Carbon Credits, Rabobank International

• Ashutosh Pandey, Head - CDM Practice, Emergent Ventures

• Mark Runacres, Senior Visiting Fellow, TERI & Director, Sheffield Vermark

• Saurabh Kumar, Secretary, Bureau of Energy Efficiency, Government of India

• Charles Cormier, Senior Carbon Specialist - South Asia, The World Bank

• S C Dangayach, Director - Projects, Steel Authority of India

• Dr V Shunmugam, Chief Economist, MCX

• Dr Y P Abbi, Fellow, TERI

• Anik Ajmera, Head - Business Development, Asia Carbon Exchange

• Mahua Acharya, Head - Carbon Markets & Climate Change, Arcelor Mittal, London

• Karin Sittler, Vice President, KfW Carbon Fund, Germany

• Sri Sundar, Head - Product Strategy, TCS Financial Solutions and Mr Shirish Sinha, Head - Climate Change, WWF India.

The technical sessions on the agenda comprised the following:

• Carbon Trading in Asia

• Pricing & Trading carbon credits including emerging carbon trading strategies

• Role of and opportunities in the voluntary market

• Mainstreaming CDM projects in India

• Mechanics for expanding role of CDM market

• Future of the Carbon Market

• Assessment of Bali Talks and possible scenarios post 2012

These sessions were powered by thoughts of an experienced pool of eminent speakers, making the conference a distinct learning forum for over 300 delegates representing varied industry segments, aspiring to leverage the huge potential in Carbon Credits & Carbon Trading.