| clean development mechanism (CDM) & carbon trading |
The Kyoto Protocol (1992) was the first time the countries across the world came together in order to develop and work out an agreement that would aim to reduce greenhouse emissions, and hence help mitigate the adverse effects of climate change. The protocol was developed under the guidance of the United Nations Framework Convention on Climate Change (UNFCCC).
It set legally binding targets and timetables along with assigning monetary value to Earth’s shared atmosphere. Nations that have contributed the most to global warming have tended to benefit directly in terms of greater business profits and higher standards of living, while they have not been held proportionately accountable for the damages caused by their emissions. The negative effects of climate change will be felt all over the world; in fact the consequences are expected to be most severe in least-developed nations which have produced the lowest emissions. Thus the Kyoto Protocol sets limits on total emissions by the world's major economies, a prescribed number of "emission units".
However, a key concept used in the development of Kyoto Protocol was that it’s more important that the greenhouse emissions be reduced on a global scale, rather than on a per country basis. Thus though it assigned higher reduction targets to industrialized nations (citing their historic responsibility), it also allowed for the Clean Development Mechanism.
The Clean Development Mechanism (CDM) is an arrangement which allows industrialised countries who need to meet a greenhouse gas reduction commitment target to invest in projects that reduce emissions in developing countries as an alternative to more expensive emission reductions in their own countries via the concept of Carbon Credits. Thus CDM allows net global greenhouse gas emissions to be reduced at a much lower global cost by financing emissions reduction projects in developing countries where costs are lower than in industrialized countries.
GreenTree aims to leverage the CDM mechanism. There are a number of projects in India that would yield Carbon Credits which can then be sold to organisations/countries from the industrial world. However the process of earning Carbon Credits requires proper authentication & energy auditing exercises in accordance with the provisions of the Kyoto Protocol. GreenTree is currently holding talks with various organisations and aims to enter into this market. |
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