By Raghav Bansal:
In today’s grossly materialistic world our daily lives are consumed so inadvertently by two phrases which have entire world powers fighting to stabilize and grow one and maintaining and preserving the other. Almost every second action of our lives is directed towards the manifestation of these sole entities. They are unmistakably the Economic Progress and Environment. Until the recent past these have seemed to be two birds that just cannot stay in the same nest. Sharing a relationship that can be said to be less than cordial, economic development has always come at the expense of environment preservation. To put it plainly, the environment has always suffered innumerable setbacks just to ensure our cars, factories continue to guzzle up the black gold ever so shamelessly.
The times are changing now, for good. As the highly speculated Dooms Day ends near as we continue with our relentless onslaught on the environment several private agencies, international governing associations have taken the initiative to help clean up Mother Earth without compromising economic development. Sounds blandly oxymoronic, doesn’t it. Well let me explain. The International Kyoto Environmental Protocol had introduced ground-breaking concepts of Carbon Footprint, Carbon Credit, Emissions Trading etc.
The Carbon Footprint is the measure of the amount (in tonnes of GHG) of Greenhouse Gases emitted by an organization or agency involved in any production activity. A central governing body be it national or international allocates a certain permit (of Gross tonnes of GHG it may exude) to a production institution thus restricting its emissions and thus effectively helping reduce air pollution, but at the cost of capped economic growth. Now to increase production one needs to have Carbon Credits (allocated on basis of goods produced) that allow it to offset the permit of GHG emissions. Now if a company has more carbon credits than it requires currently, then it may sell them to one in need to undertake production through an Emissions Trading market like the European Climate Exchange, Chicago Climate Exchange, NASDAQ OMX etc.
A corporation that has excessive Carbon credits tends to gain monetarily by huge leaps and bounds simply by selling them to less environmental friendly companies that need them. The price of 1 Metric Tonne GHGE(equivalent to trading 1 Carbon credit) has varied between INR 800 to 900 in the past 1 month.
Given the economic benefits of Carbon Trading developing nations like India tend to gain immensely from it. With its juvenile fledgling industries India is in a position to develop and implement new eco-friendly technologies that are highly energy efficient according to standard international norms simply by mass employing the enormous youth labour workforce at its disposal. By doing so we all stand to gain by selling our credits to old foreign industries that importunately need them to make both sides of the Carbon ledger match. Small scale Indian industries tend to be the biggest beneficiaries of this system as they have the luxury of using the cheapest and most energy efficient means i.e. raw labour.
Using manual labour tremendously reduces the output of pollutant gases besides helping reduce unemployment. Driven by the glittering monetary incentives of Carbon Trading several young entrepreneurs are coming forward to setup small scale industries that produce good quality products at minimum emission levels. Use of the best hybrid technologies that use the optimum balance of man and machine, these people have really managed to make their space a truly green one to work at. Now called Green Business Owners, ones that indulge in producing any good or providing any service that helps preserve the environment in any way possible.
Be it setting up a company that converts 100Watt Bulbs to 10 Watt CFLs, or recycling useless hospital linen to make padding material, or tin cans to make automobile sheets, or making low cost solar panels etc. Even being an organic farmer or wind harvesting engineer puts you in the category of a Green Business Owner and that allows you to link to the United Nations Framework Convention on Climate Change and know the ‘standard’ level of carbon emission allowed for your outfit or activity. Simply starting a manual labour based organization that recycles plastic is regarded a respectable environmentally green job. Now higher your eco-friendly activity is, higher will be your credit saving count.
Last year India and China were the largest sellers and Europe was the largets buyer with the International carbon trading crossing $120 billion. India has generated some 30 million carbon credits the 2nd highest in the world, and has roughly another 140 million to push into the world market. Waste disposal units, plantation companies, chemical plants and municipal corporations can sell the carbon credits and make money. It is expected that in the near future India may make upto $5-10 billion just from generating 573 million carbon credits. For example the Jindal Vijayanagar Steel plant recently declared that in the next 10yrs it will be able to sell $225 million worth of carbon credits by using superior furnace technology. An example of the local public efforts is the Handia Forest in Madhya Pradesh where 95 rural villages stand to gain approximately $3,00,000 per year just by reclaiming community forest cover.
We are capable of being green at levels that are simply not possible for the other developed nations. Our booming economy allows to develop and design buildings and other and infrastructure in the most eco-friendly way. Latest breakthrough have been made by Indian architects in the construction industry with office-building designs that use up minimum electricity for illumination and air-conditioning. It is estimated that Indian business offices that are primarily non air-conditioned save up to 300-500 tonnes of carbon dioxide emission compared to a/c ones with minute different in productivity.
With less loose cash at the beginning of the Startup and better business minds Indian entrepreneurs are way ahead in cashing in on the carbon trading ventures making India one of its fastest growing markets. With the implementation of the NREGA plans by the Indian government the number of green jobs has increased with efforts to setup large Waste removal plants, non-conventional energy source stations, forest preservation branches, and creation of bodies for generating awareness among the masses. Simply by undertaking any such activity on a small scale and affiliating to the UNFCCC we all can both avert the environmental crisis and also improve the nation’s economic situation.
More efforts should be made by us to use state-of-art technology based on environmental friendly research to carry out production and services. Genuine efforts to educate and imbue interest in the youth to go in for ecological and environment research work should be made. Institutes like TERI which offer courses in environmental management help produce some of the best eco-managers whose value will only increase as we go more conscious of our natural surroundings and eco-agencies become more vigilant.
Though we are potentially the largest market for carbon credits on the MCX, we still need to implement proper policies to allow trading of certified emission reductions (CERs), carbon credit. To increase the market for carbon trading Forward Contracts (Regulation) Amendment Bill has been introduced in the Parliament. This amendment would also help the traders and farmers to utilize NCDEX as a platform for trading of carbon credits. However, to unleash the true potential of carbon trading in India, it is important that a special statue be created for this purpose as the Indian Contracts Act is not enough to govern the contractual issues relating to carbon credits. Thus we see that Carbon Trading is definitely the “Greenest” pastures (pun intended) for business trading for the small and large scale private and governmental sectors in India with opportunities for everyone.
The writer is a Correspondent of Youth Ki Awaaz and also a Mechanical Engineering student at BITS Pilani Goa Campus.