Carbon market participation must be voluntary, feasibility of aviation carbon trading to be examined: IndiaRead Now
Businesses need to iron out real impediments in working of market based measures to address climate change: Secretary MEA
2-Day ‘India Climate Policy and Business Conclave 2013’ under way
Mr. Pinak Ranjan Chakravarty, Secretary (ER), Ministry of External Affairs, Government of India, today exhorted the business community to iron out the real impediments in the working of the market mechanism currently in place to address climate change.
Mr. Chakravarty while addressing the ‘India Climate Policy and Business Conclave 2013’ organized by FICCI in association with the Ministry of Environment & Forest (MEF), Government of India, the World Bank and German Environment Ministry, cautioned that the low ambition of developed countries has undermined the Clean Development Mechanism (CDM) and threatens to undermine the future of carbon markets. At the same, there are efforts in organizations like the International Civil Aviation Organization (ICAO) to set in place Market Based Measures (MBMs) without examining their viability or feasibility in international civil aviation.
“We are convinced that MBMs can only supplement and not supplant actions and commitments by developed countries. Also, these MBMs have to be voluntary and not obligatory, thereby ensuring greater participation and mechanism focused impact on combating climate change,” he said. Mr. Chakravarty also emphasized that it would be important to ensure that we do not put in MBMs, which are designed to fail due to the lack of demand or due to their inability to focus on climate change but merely become revenue earning sources.
He expressed disappointment that the emission reduction obligations undertaken by the Annex-I Parties in the Kyoto Protocol were not ambitious and more serious emission cuts by Annex-I Parties were required.
“I hope that they will re-visit their targets in 2014 as agreed and enhance their ambition to meet the requirement of science. Those who have stayed out of the Kyoto Protocol must also undertake ‘comparable targets’ since climate change regime demands higher ambition from all Annex-I parties and not just those, who subscribe to the Kyoto Protocol,” Mr. Chakravarty added.
“While we consolidate and implement the decisions taken in Doha last year as well as in earlier Conference of Parties, we remain engaged on the Durban Platform which was launched in 2011. Our focus is in ensuring that we come to an agreement in 2015 for the Post-2020 period," he added.
The forthcoming Conference of Parties in Warsaw in November this year will be important in the context of implementation of decisions so far and charting out a road map of negotiations for the 2015 Agreement. An area of focus will be the big gap in the long term finance goals of mobilization of US$ 100 billion per year by 2020. This gap should be addressed in Warsaw. We also need a clear road map for 2015 as per the mandate of Durban, the Secretary said.
Mr. Ravi Prasad, Joint Secretary, Ministry of Environment and Forests, Government of India, said that climate change has really climbed up in the ladder of importance and industry has emerged as a key stakeholder effecting changes impacting climate change. The government and MEF have involved the industry in all consultation processes and all stakeholders are part of the process. Also with the coming of the CSR Bill, of which environment is a key component, we hope that the industry will accord highest importance to it and will also explore possible domestic markets.
Dr. Jyotsna Suri, Vice President, FICCI, said, “Businesses need policy measures that will help in channelling climate friendly technologies and finance into projects that focus on climate change mitigation and adaptation. Ultimately, businesses need markets and market based mechanisms to provide the returns on investment, to be able to make the right impact at the right time, and to help scale up their initiatives on emissions reductions. Climate policy can address all these aspects of private sector engagement. Governments are the architects of policy and private sector is the vehicle to deliver the objectives of these policies and therefore policies should incentivize private sector engagement in a way that they can get returns on investment.”
On the occasion, FICCI released a Report called ‘Indian CDM Pipeline Analysis’.
Over the years, FICCI has engaged with industry and government on both domestic and international levels with an aim of developing and mainstreaming Indian industry’s views on CDM. In continuation of this objective, FICCI has in the last few years released analysis of Indian CDM portfolio.
For purposes of this analysis, FICCI looked at the entire set of projects that have been approved by the Indian DNA as ‘approved’ (host country approval) and the subset of projects from India that have been ‘registered’ (by CDM Executive Board). The analysis is based on data available with Indian DNA of total number of projects from India as on June 2012 (referred here as the total portfolio of Indian CDM projects). It is important to analyze the registered and the approved set of projects separately to show the success rate of Indian projects when these go through the international approval phase (in this case with the CDM Executive Board or CDM EB as it is called) vis-à-vis the domestic approval of a larger set of projects, many of which have remained in the validation pipeline (the stage before the project goes for international registration). This report shows the extent of corporate sector engagement in GHG mitigation projects.
An analysis of the projects as on June 2012 shows that 2355 projects with a certified emission reduction (CER) potential of 715 million have been approved by the Indian DNA. Out of this total, 844 Indian projects (one-third of total Indian approved and 16.8% of global total registered) have been registered by the CDM Executive Board. The expected CERs from these 844 projects are 330 million up to December 2012.
India has witnessed a steady rise in the number of CDM projects over the years. This rise is seen from 1633 projects in April 2010 to a total of 2355 in June 2012. There has been an increase of 722 projects in this time period. The fact that 2355 CDM projects have been approved by the Indian DNA by June 2012 clearly shows that the Indian CDM portfolio grew rapidly.
The analysis shows that 1604 Indian companies (representing 55 sectors) account for 2355 projects in the Indian CDM project portfolio (as of June 2012). Out of the total 1604 companies, 83 are public sector entities which account for 210 projects (9% of total projects). The expected CERs from these 210 projects are 98.32 million up to 2012. Out of the top 500 companies featuring in ET ranking for 2012, 171 corporates (11% of the total 1604 companies) are engaged in CDM which in total account for 438 projects in the Indian project portfolio. 171 companies engaged in CDM in India, out of the ET 500 represent a total of 33 industrial sectors.