Friday, September 01, 2006

India's Creditable Feat Of Earning 'Carbon Credits'

As global warming due to greenhouse emissions is becoming a stark reality all over the world, the need for corrective measures like controlling the pollutants is getting more attention from all quarters. The crux of the problem of greenhouse emission is the rise of carbon dioxide levels in the atmosphere and the Kyoto Protocol has been accepted by some 120 countries excluding USA with the aim of reducing the same. In order to make it effective, economic incentives of 'carbon credits' have been introduced. As per Wikipedia, carbon credits are measured in units of certified emission reductions (CERs). Each CER is equivalent to one tonne of carbon dioxide reduction. The idea simply stated of a complex mechanism devised is that companies which pollute more are fined and those which pollute less are rewarded. The reward comes by way of carbon credits which can be sold to offending companies which must buy to balance their pollution limits. So like market for any commodity, buying and selling go on for carbon credits. The greater the demand, the higher becomes the price of carbon credits. Consequently, the companies selling more carbon credits make more money which makes the emission cost reduction cost-effective.Just to have an inkling of the emission trading, one unit of carbon credit is now selling around $15 to $20. Silently and surprisingly, some Indian companies have already tasted success in the field. The well-known tyre cord manufacturing company SRF has already sold over 2.5 million units valued at $40 million and are reported to be holding 16 million units more for sale in future. Reliance and Grasim are on the look out clinching best deals. There are others which are holding their cards to the chest and are waiting in the wings for striking gold. The irony of such trading is that the buyers are industrialised countries in Europe trying to beat the deadline of the year 2008.India's euphoria may be short-lived as large manufacturing activities are being planned to sustain GDP growth rate of 8% per annum or beyond to become a super economic power. Large capacity of coal-based power plants, steel plants, cement plants, textile and fertilizer plants along with a growing population of automobiles without provision for alternative fuels could reverse the trend.If India has to attain rapid economic growth to become a super economic power, it must not curtail its mega projects. The hopes of millions of jobseekers and India's dream will be shattered. However, it may still be possible with the help of pollution control technologies and equipments to go for rapid industrialisation and yet retain the honour earned. For this, India will have to shop around the world.Undoubtedly, it is a Hobson's choice for India. Is it not?

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