By Gurmit Singh
Make no mistake: carbon trading is going to be a fact of life, serious money is heading into carbon. Globally, about $64 billion went that way in 2007.
The essence of trading greenhouse gases such as CO2 is characterized by the system of "cap" and "trade". Member countries agree to reduce the amount of greenhouse gases they release into the atmosphere by a percentage referred as "cap". Trading takes place when members release less than their limit and hence left with surplus of emission credits. A carbon credit equivalent to reducing one tonne of CO2 emission is called Carbon Financial Instruments. These credits can then be sold to members that have exceeded their allowable limits. Carbon credits basically seek to encourage countries to reduce their greenhouse gas emissions, as it rewards those countries that meet their targets and provides financial incentives to others to do so as quickly as possible. The European countries and Japan are the major buyers of carbon credits. This is what makes trading in carbon credit such a great business opportunity.
"Understanding Carbon Credits" is directed at smaller-scale local partners in Clean Development Mechanism (CDM) projects-small businesses, non-governmental organisations (NGO's) and community based organisations- to empower them to put forward project ideas, particularly ideas with development focus. While large companies generally have the resources and skills to devote to project development, smaller companies and institutions might not.
"Understanding Carbon Credits" bridges the gap between general introductions to the CDM and more technical manuals on project design and GHG assessment. It covers project design only, not implementation, and it points project developers to detailed resources, where appropriate. On monitoring and verification, for example, it summarises monitoring protocols rather than duplicating their detail. Although this book is not everything a project developer needs to design and report on a CDM project, it does provide a comprehensive overview of how to get there.
The international negotiations on the CDM are in constant flux, as are the needs of project developers
- 1. Global warming, Climate change and GHG (Green House Gases)
- 2. Carbon Credits, Kyoto Protocol and Clean Development Mechanism (CDM)
- 3. Environmental integrity and Sustainable development
- 4. The CDM project cycle
- 5. The Project Design Document (PDD)
- 6. Financing CDM Projects
- 7. Market Intelligence
- 8. Legal Issues in CDM
- 9. CDM after 2012
- 10. Nuclear Energy and the Kyoto Protocol
- 11. The Environment Since 1970