CEE Jan-Mar 2012

pressure to accept the European Union roadmap as the poor nations incl uding Bangladesh and Maldives backed the roadmap. There was also division in the biggest group of 132 nations in the UN climate conference of G-77 plus China with African island and least developed nations supporting the EU proposal. The outcome means that India has abandoned its stand of not agreeing to emission cuts till its per capita emissions ri se above average per capita emissions of the developed world. As per modelling studies, India's per capita emissions will be less than that of rich nations even in 2030. Carbon markets weak Indian companies looking to earn cash from carbon credi ts may be in for disappointment as prospects for global carbon trade turn bleak. Prices have hit an all time low ahead of the Durban climate talks, where the fate of Kyoto Protocol will be decided. The first commitment period of Kyoto Protocol, the global legally binding agreement for reducing emissions on which the current carbon market is based, will come to an end in December 2012. Differences between developed and developing countries on the continuance of Kyoto beyond 2012 have made the carbon markets' future uncerta in. "I have stopped looking at prices. It is scary and they may fall further," Mr Pandey said. The price crash has resulted in a big value loss for those Indian finns holding on to carbon credits. India with 745 projects accounts for 20.63 per cent of the total 3612 Clean Development Mechanism (CDM) projects registered with the UN Framework on Climate Change. Indian companies account for 16 per cent of the 78.10 crore carbon credits issued. 'The carbon markets are almost dead as climate negotiators are unlikely to arrive at a consensus on the Kyoto Protocol replacement at Durban. There is also a talk of concluding a global deal by 2015," said Mr Anmol Jaggi, Director, Gensol Consultants, a carbon advisory firm. Recent efforts by the UN panel to curtail supplies of carbon credits have not helped lift the market sentiments either. As Europe reels under financial cri sis and with no industrial production, the demand for carbon credits remains poor, Mr Jaggi added. That the European economies are facing difficult times further makes it tougher to continue the Kyoto Protocol unless other developed and developing countries agree to abide by mandatory emission reduction targets. However, Mr Pandey feels that the carbon market will continue to exist as the market mechanism has been created. The EU has already stated that it was ready to accept credits generated from COM projects till end of 2012 in the third phase of EU Emission Trading Sy.;tem which starts form 2013 and goes till 2020. Moreover, the current set up of multilateral trading in carbon credits may go bilateral or the regional way. Japan, which is opposed to extension of Kyoto Protocol, has already expressed its willingness to source credit from India beyond 2012 on a bilateral basis. Courtesy: Total Energy, Nov. - Dec. 2011, Pp33-35. CLIMATE TALKS AT DURBAN TO DECIDE FUTURE OF CARBON MARKETS Indian companies looking to earn cash from carbon credits may be in for disappoint as prospects for global carbon trade turn bleak. Prices have hit an all-time low ahead of the Durban climate talks starting Monday, where the fate of Kyoto Protocol will be decided. The first commitment period of Kyoto Protocol, the global legally binding agreement for reducing emissions on which the current carbon market is based, will come to an end in December 2012. Differences between developed and developing coun– tri es on the continuance of Kyoto beyond 2012 have made the carbon markets future uncertain. Carbon Markets Weak "It is a tricky situation," said Mr Ashutosh Pandey, CEO of carbon advisory business at Emergent Ventures, attributing the slump in carbon credit prices to the poor demand from the recession hit European Union. Prices of car- bon credits hit a low €6 last week from about €12-1 3 in July on high supplies from China and India and weaker demand from the EU. "I have stopped looking at prices. It is scary and they may fall further," Mr Pandey said. The price crash has resulted in a big value loss for those Indian firms holding on to carbon credits. India with 745 projects accounts for 20.63 per cent of the total 3612 clean development mechanism (CDM) projects registered with the UN Framework on Climate Change. Indian companies account for 16 per cent of the 78.10 crore carbon credits issued. "The carbon markets are almost dead as cl imate negotiators are unlikely to arrive at a consensus on the Kyoto Protocol replacement at Durban. 26