| Global
Warming
Industrial,business
and other activities and construction emit heat and
gases like carbon dioxide, methane and nitrous oxide in the atmosphere. Land areas under forest,
pasture and mountains that absorb the gases and heat are
shrinking to make way for human activity, construction
and industrialization. As a result, the excess gases
accumulated in earth's atmosphere act as a trap for
the heat not allowing it to escape into outer space.
This heat trapping is called green house effect and
culprit gases called Green House Gases (GHG).
Climate Change
When the earth heats up,
Natural weather becomes unpredictable, natural resources
deplete and ecology becomes fragile and changes in
climate hit food production. The consequences of climate
change are certainly far bigger than world wars and a
threat to sustainability of development. If the manner
of industrialization & habit did not change, there
would be ecological disbalance. This issue concerns
every human on this planet. Responsibility for reversal
of this trend lies in the mind of people and it is mind
change for the climate change.
Clean
Development Mechanism
Climate
change Policy is one of important element in
international environmental management system and a
Clean Development Mechanism addresses the issues of
reducing green house
Climate
change Policy is one of important element
in international environmental management system and a
Clean Development Mechanism addresses the issues of
reducing Green House Gases (GHG) and sustainable
development. These mechanisms are flexible mechanisms
and have their origin in the United Nations Framework
Convention on Climate Change (UNFCCC) and have been made
operational at the Conferences of the parties to the
Convention (COPs), held in Kyoto (1997), Bonn (2001) and
Marrakech (2001). USA, as party to Kyoto Protocol has
not joined with the UNFCC, because it believed in a form
of self-regulation and sustainable development inbuilt
into processes of the free market.
Clean Development
Mechanism is based on concept of additionality. This is
focused at promoting those activities in absence of
which GHG would have arisen with respect to the baseline
of business-as-usual. Use of fossil fuel is currently a
dominating source for production of electricity and
heat. The burning of any amount of fossil fuel adds GHG
in the earths' atmosphere and not re-absorbs any of
the GHG. Renewable energy on the other hand,
recycles the gases and heat without making any new
addition to green house gases. Bio diesel and other farm-cultivated energy are
similarly renewable sources of energy.
Solar and wind energy are cleanest because these
do not involve any heat and carbon dioxide gases.
Hydropower is renewable energy, as it does
not directly add to any GHG; and electricity production
is a by-product from dams built to store water. This
offsets GHG that would have arisen by use of fossil fuel
had this electricity been produced by thermal-electrical
plant. CDM provides a way to measure economic value for
those growing orchards, forests and pastures or
retaining already existing forests by the amount of
carbon dioxide emission reduction. Similarly, mass
transportation that replaces individual cars also
reduces emission of GHG and considered as CDM.
Carbon
Credits
Countries
that are party to Kyoto Protocol have pledged to reduce
global warming by emission reduction and also others
voluntarily. The framework including measurement of
emission, methodology of measurement, concept of
additionality, mechanism of emission reduction planning
and verification are part of CDM.
Green Houses Gases include carbon dioxide, methane, and
nitrous oxide. For simplicity, a measurements unit for
emission is in ton of carbon dioxide. Conversion factors
are determined for converting amount of any Green House
Gas into an equivalent amount of carbon dioxide. This
mechanism of measurement makes a unit called Carbon
Emission Reduction (CER). With methodology of
measurement, disclosures and verification, carbon
credits become a commodity and tradable in the market.
Carbon
Emission reduction (CER) is like a global currency.
This, after the amount is verified, is called Verified
Emission Reduction (VER). One ton of reduced carbon
dioxide is called 1 CER. This is called Carbon Credit.
Carbon credits can also be traded in lieu of currency of
banking system (such as USD, INR, UKP) in a market of
buyers-seller that have to meet commitments of voluntary
emission reduction.
Carbon Trading
From the beginning, there are
direct buyers from parties of the protocol who needed to
meet its obligation of voluntary emission reduction by
buying Carbon Credits. By buying Carbon Credit in the
form of Verified Emission Reduction (CER), a buyer can
offset its obligation of voluntary emission reduction.
Over
a period, a market of buyers and sellers and
intermediation in trade of Carbon Credits grew. Chicago
Climate Exchange (CCX) is first commodity market in
the USA for Carbon credits.
Markets of Carbon credits operate like any other
stock exchange in commodity and futures. Here, buyers
and sellers are registered and quotes of sale and
purchases determine prices.
Carbon Credit Trade in Chicago Climate Exchange
For Chicago Climate Exchange (CCX),
sellers (called offset providers) of verified carbon
emission must have commissioned the project after 1st
January 1999. Crediting
period is 2003 to 2010 (7 years). For more details see
CCX website www.chicagoclimateexchange.com
The reduction so far made and now put to sales in Chicago
exchange is called Vintages corresponding to that year.
For estimated emission reduction in future years, this
is called Futures. Buyers - Sellers in CCX can trade in
continuous manner or for each block years of vintages
and futures in their best interests offered by CCX
trading platform.
Emission
Reduction Verification URS CCMS - CCX
URS Inspection Limited (URS) is Verifier
of CDM projects for those interested to trade carbon
credits in Chicago Climate Exchange. Those individuals
and organizations that are developing projects or
already have commissioned project that qualifies
additionality criteria can take advantage of Carbon
credit markets of CCX. They become sellers of carbon
credit as offset providers. Different buyers in CCX
offer quotes and the deals are made through online trade
platform.
After the project is approved for admissibility in CCX, URS
CCMS offers its Verification Services to offset
providers for verification of emission reduction as
it is claimed to be in the offer made to CCX. URS CCMS
verification is to establish the amount of emission
reduction of Carbon Dioxide claimed by offset provider
as true as per its method applied and using CCX
methodology and additionality criteria.
With the verification of emission by URS CCMS
(authorized verifier by CCX) the offset providers can
trade reduction, off sets in CCX as market participant.
For more
information write us at : info@ursindia.com
URS offers various services worldwide and these services with accreditations where applicable, whilst following uniform management system, are operated by separate legal entities within the group. For status of individual scheme and accreditation, contact URS office or email at info@ursindia.com |
