Carbon Trading
Carbon Trading: Future Money Making Venture for India
Sarika Gupta
Assistant Professor,
P.M.B. Gujrati Commerce Collage,
Indore
Abstract
Carbon Trading are generated by enterprises in the developing world that shift to cleaner technologies and thereby consumption, consequently reducing their greenhouse gas emissions. For each tone of carbon dioxide (the major GHG) emission avoided, the entity can get a carbon emission certificate which they can sell either immediately or through a futures market, just like any other commodity. The certificates are sold to entities in rich countries, like power utilities, which have targets to achieve and find it cheaper to buy 'offsetting' certificates rather than do a clean-up in their own backyard. This trade is carried out under a mandated international convention on climate change to help rich countries reduce their emissions. Carbon dioxide, the most important greenhouse gas produced by combustion of fuels, has become a cause of global panic as its concentration in the Earth's atmosphere has been rising alarmingly. This devil, however, is now turning into a product that helps people, countries, consultants, traders, corporations and even farmers earn billions of rupees. This was an unimaginable trading opportunity not more than a decade ago.
Introduction
Carbon Trading are a part of international emission trading norms. They give incentives to companies or countries which emit less carbon. The total annual emissions are capped and the market allocates a monetary value to any shortfall through trading. Businesses can exchange, buy or sell Carbon Credit in international markets at the prevailing market price. India and China are likely to emerge as the biggest sellers and Europe is going to be the biggest buyers of Carbon Credit. India is one of the countries that have 'credits' for emitting less carbon. India and China have surplus credit to offer to countries that have a deficit. India has generated some 30 million Carbon
Sarika Gupta
Assistant Professor,
P.M.B. Gujrati Commerce Collage,
Indore
Abstract
Carbon Trading are generated by enterprises in the developing world that shift to cleaner technologies and thereby consumption, consequently reducing their greenhouse gas emissions. For each tone of carbon dioxide (the major GHG) emission avoided, the entity can get a carbon emission certificate which they can sell either immediately or through a futures market, just like any other commodity. The certificates are sold to entities in rich countries, like power utilities, which have targets to achieve and find it cheaper to buy 'offsetting' certificates rather than do a clean-up in their own backyard. This trade is carried out under a mandated international convention on climate change to help rich countries reduce their emissions. Carbon dioxide, the most important greenhouse gas produced by combustion of fuels, has become a cause of global panic as its concentration in the Earth's atmosphere has been rising alarmingly. This devil, however, is now turning into a product that helps people, countries, consultants, traders, corporations and even farmers earn billions of rupees. This was an unimaginable trading opportunity not more than a decade ago.
Introduction
Carbon Trading are a part of international emission trading norms. They give incentives to companies or countries which emit less carbon. The total annual emissions are capped and the market allocates a monetary value to any shortfall through trading. Businesses can exchange, buy or sell Carbon Credit in international markets at the prevailing market price. India and China are likely to emerge as the biggest sellers and Europe is going to be the biggest buyers of Carbon Credit. India is one of the countries that have 'credits' for emitting less carbon. India and China have surplus credit to offer to countries that have a deficit. India has generated some 30 million Carbon