Download global warming and kyoto protocol :indian scenario on carbon credits

GLOBAL WARMING AND KYOTO PROTOCOL :INDIAN
SCENARIO ON CARBON CREDITS
Abstract
The greenhouse gas market has developed significantly over the past several years. From
a theoretical construct proposed by politicians and academics during the early to mid 1990s, to an
important part of the Kyoto Protocol in 1997 to what is today a vibrant and active market that has
seen in excess of 250 million tonnes of CO2 equivalent (tCO2eq) transacted
Trade in carbon credits has the potential to make forestry more profitable and sustain the
environment at the same time. It has therefore attracted considerable attention of the likely buyers
of credits, producers (i.e. forest growers), and others. However, it is difficult to stay fully
informed about carbon credits because of the complexity and the pace of developments on the
subject. This report looks at the current situation on carbon credit markets and trade.
1.
GLOBAL CLIMATE CHANGE
1.1
A Growing Environmental Problem
One of the environmental threats our planet faces today is the potential for long-term
changes in the Earth's climate and temperature patterns known as global climate change.
Scientists estimate that as a result of global climate change, the Earth’s average temperature could
increase as much as six and one-half degrees Fahrenheit by the year 2100. While this may not
sound like much of an increase, if the temperature increase approaches the six and one-half
degree mark, the Earth will be a much different place than we know it today. To gain an
appreciation of how different the Earth could be, consider that during the last ice age, when our
planet was on average only nine degrees Fahrenheit cooler, the area that is now New York City
was under 1,000 feet of ice.
To prevent this sort of disruption to the many natural and human systems that everyone
on our planet depends on, we must all work to control global climate change. Determining the
potential causes of global climate change has been a long-term process that has involved the work
of thousands of scientists around the world. An important step in this process was made in 1995
when over 2,500 scientists from around the world agreed for the first time that emissions of
greenhouse gases from human activities have influenced the global climate. As a result, the
question is no longer whether humans are altering the world’s climate, but where, when, and by
how much. The great importance of this scientific conclusion is that we now know that in order to
prevent the onset of catastrophic changes to the Earth’s climate, humans must reduce their
emissions of greenhouse gases.
1.2
Consequences Of Global Climate Change
Although climate change may result in some benefits such as extended growing seasons
or more moderate temperatures in some areas, the overall effects are likely to be harmful. Sealevel rise, as a result of climate change, could lead to the loss of many coastal wetlands, and
Entire Island Nations could disappear. Changes in the quality and availability of water resources
could occur and worsen conflicts over water use. Healthy forests could be greatly reduced as the
range of tree species shifts. Additionally, humans could suffer from increases in the spread of
infectious diseases, heat-related deaths, and air pollution. Global climate change could potentially
cause sea levels to rise as oceans warm and expand and as a result of ice cap and snow cover
melting. The Inter -governmental Panel on Climate Change (IPCC) projects a sea level increase
of six inches to more than three feet by the year 2100. Because half the U.S. population lives
within 50 miles of the coastline, this would be disastrous. Large areas of Florida and Louisiana
could be submerged, while many beaches along the East Coast would disappear. Even worse,
many small-island nations with no high ground to retreat to could disappear altogether. The
worldwide redistribution of disease vectors - the animals, insects, microorganisms and plants that
transmit diseases - which is already upon us could increase due to global climate change. Many
tropical diseases such as dengue fever, yellow fever, and malaria are beginning to be seen at
higher latitudes and altitudes as warming occurs. This warming could potentially result in a
greater number of people being exposed to these deadly diseases. Many ecosystems could have a
difficult time adjusting to the rapid rate of climate change if the world does not reduce
greenhouse gas emissions. Animals and plants that are excellent competitors under stable
environmental conditions often cannot survive when their habitat is altered by rapid change.
Instead, parasite species such as weeds, rodents, insects, bacteria and viruses will quickly
reproduce and colonize disturbed environments. The recent population explosion of termites,
cockroaches and mosquitoes in New Orleans and rodents in southern Africa are examples of this
type of problem.
There are also likely to be significant economic and social costs as agriculture is forced to
make painful adjustments in response to climate changes. Droughts, floods and storms could
become more severe, and entire agricultural regions could become disrupted as rainfall and
temperature patterns shift. It is unknown whether farmers and governments will be able to adopt
new techniques and management approaches that can deal with the negative impacts of climate
change. It is also hard to predict how relationships between crops, pests, weeds, and livestock will
evolve. The result could be an inability to provide adequate food resources to a growing world
population. This could lead not only to higher food prices, but also to increased conflict
throughout the world as people compete for resources in a very different global environment.
2.
KYOTO PROTOCOL
On Wednesday 16th February 2005, some 8 years after the world's nations came together
in Kyoto in Japan in 1997 to discuss Global Warming, the Kyoto Protocol finally came into force.
The very phrase 'Kyoto Protocol' has become synonymous with the idea of saving the planet from
global meltdown, and yet in truth quite what we should be expecting to happen next remains
something of a mystery.
The Kyoto Protocol aims to tackle global warming by setting target levels for nations to
reduce greenhouse gas emissions worldwide. These targets vary between countries and regions,
but globally the initial target is to reduce greenhouse gas emissions to 5.2 percent below 1990
levels (base levels) during the ‘commitment period’, i.e.’08-12.
The convention covers all green house gases not covered by the ’87 Montreal Protocol to
the United Nations Convention on protection of the ozone layer. The focus of the Kyoto Protocol,
however, is on the reduction in the levels of the following six gases: Carbon Dioxide (CO 2),
Methane (CH4), Nitrous Oxide (N2O), Hydroflurocarbons (HFCs), Perflurocarbons (PFCs) and
Sulfur Hexafluoride (SF6).
The Kyoto Protocol got its legal sanctions with ratifications by Russia and Canada.
However, the US and Australia have declined to ratify it, which reflects sadly on these two
developed countries. But the Protocol will not apply to the developing but signatory countries
such as India, China and Brazil. They, however, are free to sell ‘carbon credits’ to other countries.
3.
THE KYOTO MECHANISM
The protocol broke new grounds with three innovative mechanisms Joint Implementation
(JI), the Clean Development Mechanism (CDM) and International Emission Trading/Carbon
Trading, which have been designed to boost the cost effectiveness of climate change mitigation
by opening ways for parties to cut emission or enhance ’sinks’, more cheaply abroad than at
home.
3.1
Joint Implementation (ji)
Joint Implementation (JI) is a project-based mechanism developed under the Kyoto Protocol
(KP), designed to assist Annex 1 countries in meeting their emission reduction targets through
joint projects with other Annex 1 countries, meaning that JI projects can only be implemented
between capped industrialized countries. One or more investors (Governments, companies, funds
etc) will agree with partners in a host country to participate in project activities which generate
Emission Reduction Units (ERUs), in order to use them for compliance with targets under the
Kyoto Protocol.
Emissions from the host country are limited under the KP; JI projects reduce emissions in
the host country and free up part of their total amount (Assigned Amount) which can then be
transferred to the investor country in the form of ERUs, which are subtracted from the host
country's allowed emissions and are added to the total allowable emissions of the investor
country. Projects may start in 2000; however ERUs can only be used for compliance from 2008,
even in the EU ETS.
3.2
The Two Procedures to implement JI projects:
3.2.1
Track 1
When an Annex 1 country meets all the eligibility and reporting requirements under the KP, it
can issue ERUs to a project, which can then transfer them to the investing entity.
3.2.2
Track 2
When an Annex 1 country is not in compliance with all the requirements, ERUs generated by a
project must be verified by an external body under a procedure similar to that of the CDM. The
host party must meet several requirements relating to the establishment of its Assigned Amount
and national registry before it can issue and transfer ERUs.
ERU: Under the Kyoto Protocol, a specified amount of greenhouse gas emissions reductions
achieved through a Joint Implementation project.
4.
THE CLEAN DEVELOPMENT MECHANISM
The CDM is a mechanism established by Article 12 of the Kyoto Protocol for projectbased emission reduction activities in developing countries. The CDM is designed to meet two
main objectives: to address the sustainable development needs of the host country, and to increase
the opportunities available to Parties to meet their reduction commitments.
4.1
CDM Project Cycle:
Participants must prepare a ‘Project Design Document’ including a description of the
baseline, i.e. the technology to be used, and the monitoring methodology to be used, an analysis
of the environmental benefits that the project is intended to generate.
The ‘Project Design Document’ is first submitted to the National CDM Authority for
validation, after receiving which the same is registered in the ‘Host Country’. Then the ‘Project
Design Document’ is submitted to UNFCCC, an international operational entity for review and
validation. It does so after providing an opportunity for public comments and taking the same into
account. After a project is duly validated, the operational entity forwards it to the executive board
for registration. The project is then ready to be operationalised. Once the project is running, it will
be monitored by the ‘Host Country’ throughout the project cycle.
4.1.1
The CDM Project Cycle comprises seven steps viz,
a.
b.
c.
d.
e.
f.
Submission of the project design document to the National CDM Authority;
Project registration in the host country;
Project validation and registration by the Executive Board of the UNFCCC;
Project monitoring by the host country;
Verification and certification;
Issuance of Certified Emission Reductions (CERs)
CER: A CER unit is equivalent to one tonne of CO2. The CER can be allotted in two different
ways. One is a fixed crediting period of 10 years or first crediting period of 7 years which can be
extended twice for a period of further seven years, however, subject to undergoing the project
validation process again. Consultants for validation of CDM projects are: Pricewaterhouse
Coopers, DNV, Ernst & Young, TERI and WINROCK.
5.
INTERNATIONAL EMISSIONS TRADING
IET is a flexibility mechanism of the Kyoto Protocol which allows the trade of Assigned
Amount Units (AAUs) among Annex B countries. It is expected that this activity will be
delegated by national governments to entities within their jurisdictions so that international
trading between entities will occur. This will adjust each nations 'pool' of AAUs.
5.1
Emission Trading/Carbon Trading
What does this all have to do with carbon emissions trading? Under the UNFCCC,
countries are permitted to use a trading system to help meet their emissions targets, although the
details are yet to be agreed upon. In principle, a country may allocate permits to individual
companies for the emission of a certain quantity of greenhouse gases. If permits are only issued to
a level equal to or below the assigned amount, then a country should meet its Kyoto commitment
(assuming that the measures of its emissions are accurate). If a country is incapable of meeting its
target, it could conceivably buy permits from countries that are under their targets. Similarly,
companies within a country that prove more able to reduce their emissions would be allowed to
‘trade’ excess permits to other, more polluting, enterprises.
Emissions Trading is a general term used for the three Kyoto Protocol flexibility
mechanisms. It is a market-based system that allows firms the flexibility to select cost-effective
solutions to achieve established environmental goals. These flexibility mechanisms include the
use of carbon sinks (pools that take up released carbon from another part of the carbon cycle) and
emissions trading.
Under Article 3.3 to the Protocol a planted forest which is established after 1 January
1990 on previously cleared land will count as a carbon sink. The carbon dioxide sequestered in
such a forest can be used to create carbon credits.
Emissions trading will allow countries and individual companies to buy and sell carbon credits
created by activities that reduce the level of GHG emissions.
The creation of carbon credits using sinks will only ever form a small proportion of the
activities that will need to be implemented to achieve emission reduction targets. This is because
the total area that can be planted as carbon sinks is limited and the cost in establishing such
forests is significant.
It should also be noted that under the Kyoto Protocol, the only carbon credits that can be
traded to meet emission reduction requirements are those credits arising from carbon
sequestration between 2008 and 2012 (the first commitment period under the Kyoto Protocol),
plus any subsequent agreed commitment periods. This means that carbon sequestered up to 2008
is not available for sale as carbon credits to meet Kyoto emission reduction targets. However,
opportunities may exist to sell these pre-2008 carbon sequestration benefits to achieve
compliance under the NSW greenhouse benchmarks.
With emissions trading, firms can meet established emission goals by:
(a) Reducing emissions from a discrete emissions unit;
(b) Reducing emissions from another place within the facility;
(c) Securing emission reductions from another facility, or
(d) Securing emission reductions from the marketplace.
Emissions trading encourages compliance and financial managers to pursue cost-effective
emission reduction strategies and provides incentives to emitters to develop the means by which
emissions can inexpensively be reduced.
Carbon credits as defined by Kyoto Protocol are one metric ton of carbon emitted by the burning
of fossil fuels.
5.2
Selling and Buying Project-Based Emission Reductions
The international pre-compliance market, with some 250 million tCO2eq transacted to
date, is the largest and most significant market for project-based emission reductions. This section
sets out the considerations and parameters for this market. Transactions are influenced by
developments of the rules being negotiated under the Kyoto Protocol process. Value can be
generated from a reduction in actual emission, avoidance of potential emission (both emission
reductions) or the creation of emission offsets (through carbon sequestration).
5.3
Baselines and Measurement
The volume of emission reductions or offsets created by a project can be calculated in
various ways and depends on the type of project, location of the project and the purpose of the
transaction. The general approach is to consider calculate the difference between the volumes of
greenhouse gas emissions with and without the project. For ease of measurement, each of the six
greenhouse gases, regulated in the Kyoto Protocol, has an internationally agreed 'Global
Warming Potential' (GWP) assigned to it. These GWP factors are used to convert each of the five
gases that are not CO2 into tonnes of CO2 equivalent (CO2eq), which is the standard unit for
trading.
6.
Carbon Markets
Carbon Credits are traded at CO2E Exchange in UK, CDM Exchange in Europe and the
Chicago Climate Exchange (CCX) which has announced a license agreement with Multi
Commodity Exchange of India to trade in pollution as commodity. However, as for most of the
traders there is no standard contract for purchasing carbon, it is not easy to find out prices. [1]
6.1
Transaction types
Emission reduction transactions range from simple spot purchases and sales to structured
options and direct investment.
6.2
Spot transaction
Delivery and payment occur during a standard timeframe shortly after the agreement has
been executed.
6.3
Forward settlement
Delivery of reductions and payment are deferred to a future date (or dates) also specified
at the time of the trade.
6.4
Options
Contracts that give the option buyer or seller the right, but not the obligation, to enter into
a specific transaction on or before a certain date. The price of the emissions reductions is locked
in up-front along with the option’s exercise date and the purchaser pays a premium for this
flexibility.
6.5
Project investment
Buyers may also choose to invest directly in projects that will produce an acceptable rate
of return along with emission reductions.
7.
A General Methodology for Evaluation of Carbon Sequestration Technologies
Estimation of Carbon Credits in Carbon Dioxide Sequestration Activities
The performance objective for a sequestration technology is not necessarily zero emission of CO2
but rather a reduction compared with the baseline of current practice. To make sure that all
carbon aspects are considered, care must be taken to ensure that there are no hidden emissions
when making an alteration from the baseline.
7.1
Approach
• All resources used in a sequestration activity should be reviewed by estimating the amount of
greenhouse gas emissions for which they historically are responsible. It is done by introducing a
quantifier we term Full-Cycle Carbon Emissions (FCCE), which is tied to the resource.
• The future fate of sequestered carbon should be included in technology evaluations. It is
addressed by introducing a variable called Time-Adjusted Value of Carbon Sequestration (TVCS)
to weigh potential future releases of carbon, escaping the sequestered form.
• The Figure of Merit of a sequestration technology should address the entire life cycle of an
activity. The figures of merit developed, relate the investment made (carbon release during the
construction phase) to the lifetime sequestration capacity of the activity. To account for carbon
flows that occur during different times of an activity, the Time Value of Carbon Flows is
incorporated.
7.2
FOREST SEQUESTRATION – AN EXAMPLE
Trade in carbon credits has the potential to make forestry more profitable, and enhance
the environment at the same time. It has therefore attracted considerable attention of the
likely buyers of credits, producers (i.e. forest growers), and others. However, it is difficult to stay
fully informed about carbon credits because of the complexity and the pace of developments on
the subject.
7.2.1
The Costs
A first step in selling the sequestered carbon is to measure its quantity in trees. A range of
simple to complex techniques is available for the purpose. In general, the techniques are more
reliable for plantations of species such as radiata pine and certain eucalypts, but less so for
plantations of other species or of mixed ages and mixed species. Other things remaining the same,
measurements of carbon with a higher statistical accuracy will result in a higher cost for the
grower. The next series of steps in selling the carbon involve: aggregation of individual growers’
carbon in to a sizeable pool; verification of the pool; issuance of carbon credit certificates by an
independent agent; registration of the certificates and their lodgement with an authorised market
clearing house (e.g. the Sydney Futures Exchange) for sale; and exchange of the certificates and
the monies. Besides the costs of the afore-mentioned steps, growers may also incur some other
costs. An example is the cost of extra insurance against the loss of trees through fire, windstorm,
and the like. The costs of services and transactions associated with selling carbon are subject to
economies of scale. Hence, small scale growers will pay a higher cost per unit of carbon. People
designing the trading mechanism are very conscious of the problem, and are trying hard to find
ways and means to keep the costs low for growers. However, growers themselves could also take
steps to reduce their costs by joining or forming growers’ cooperatives or groups that offer
economies of scale. Growers need to be aware of one more major ‘cost’. If a grower, who has
sold carbon credits from his/her forest, but then goes on to harvest the forest, he/she will incur
carbon debits. The quantity of debits will be at least equal to the quantity of carbon credits sold.
In this situation the
grower will be required to fully offset the debits by buying carbon credits in the market place; or
having additional Kyoto forests; or using a mix of both. What is the total of all the costs a grower
is likely to pay for producing certified carbon credits suitable for trade? It is a very important
question. So, it is especially disappointing to say that reliable information on the costs is
unavailable, and therefore the question is unanswerable.
It would be most helpful to growers if reliable information on the costs were readily available to
them.
7.3
Carbon Credit Prices
The current prices of credit ranges from Euro 6 to Euro 12 per tonne of CO2 . In 2004,
107 million tonne of CO2 were exchanged through green projects, a 38% rise from 2003. And
considering the steep penalty for default at Euro 40 per tonne, the volumes can only rise
So, is it worthwhile for small scale growers to undertake production of carbon credits for
trading?
Despite the vast number of studies on various aspects of carbon credits, the economics of
carbon credits for small scale growers has not yet been adequately investigated. However, a few
studies have commented on the issue. A general thrust of these studies is that, under the current
rules, many small scale growers may not find carbon credit trade sufficiently rewarding. This is
because of the relatively high total cost per unit of carbon credit, and the enormous technical,
financial and institutional risks and uncertainties.
To capture the potential benefits of carbon credit trade, growers should monitor the
forward trade prices of carbon credits; seek more information; stay informed on the
changes in the Kyoto rules and the government policy; keep records of their own forestry
operations; and take other actions to reduce the costs, risks and uncertainties.
7.4
Stumpage Prices
ANU Forestry has collected information on actual stumpage recently received by small
scale growers. As the collected information was insufficient for deriving averages and trends, it is
presented in case study format in the following table. [5]
8.
The Buyers
In line with the trend last year, data confirms the emergence of Japanese entities, mostly
Japanese private firms, as the largest buyers of CERs. Japanese entities accounted for 41% of the
‘Carbon Credits’ purchased in ’03-04, against 21% in ’02-03.
The second and the third largest buyers are still the government of the Netherlands,
through various agencies and intermediaries (Center and programs established within Rabobank,
the International Finance Corporation, the International Bank for Reconstruction and
Development, and the Coporacion Andina de Fomento), and the Carbon Finance Business (CFB),
through the Prototype Carbon Fund and the Community Development Carbon Fund, each with
nearly a quarter of purchases in ’03-04.
Asia is the largest supplier of Carbon Credits, followed by Latin America, developed
economies, and Eastern Europe. Five countries (India, Brazil, Chile, Indonesia and Romania)
represent two-thirds of the supply in terms of volume of Carbon Credits. [15]
8.1
Share of Market Buyers
(in terms of volume of emission reductions purchased in ‘04)
Buyers
Japan
The Netherlands
Carbon Finance Business
USA
Canada
Australia& New Zealand
Other EU
% Volume
41
23
24
3
3
3
3
WORLD SHARE OF MARKET BUYERS
Japan
The Netherlands
Carbon Finance
Business
USA
Canada
Australia& New
8.2
What Is In Store For India?
INDIA, being a developing country, is exempted from the requirement of adherence to
the Protocol. However, it can sell the Carbon Credits to the developed countries. Companies
investing in windmills, Bio-Diesel, Co-Generation, Bio-Gas are the ones that will generate
Carbon Credits for selling to the developed nations. The accompanying table gives the names of
some of the companies that stand to benefit from the Carbon Credit trading and the new regime.
The Protocol is designed to not only undo the climatic ill-effects of the industrialization but also
to identify the economic beneficiaries of the same and make them more accountable in damage
control, deserves high applause; all the more so, for its flexible approach and concern in letting
the business and economies continue while doing the damage control. [15]
Companies
Project
Torrent Power AEC
Gujarat Fluro Chemicals
Indian Aluminium
Lanco Group
Jaypee Associates
Chennai Petroleum Refineries
Balrampur Chini
Jindal Vijaynagar Steels
Orissa Sponge Iron
Kalpataru Power Transmission
Indo-Gulf Corporation
Grasim Industries
Energy Efficiency
Gas Capture
Gas Capture
Fuel Switching
Energy Efficiency
Energy Efficiency
Renewables
Energy Efficiency
Energy Efficiency
Renewables
Energy Efficiency
Energy Efficiency
CERs
Estimated Amount
(units)
Receivable
11900752
199.9
3380076
56.8
2553344
42.9
2289478
38.5
1084469
18.2
1010000
17.0
936289
15.7
575967
9.7
424549
7.1
313743
5.3
245256
4.1
242270
4.1
(Rs Crore)
INDIAN CARBON TRADERS : PART I
Torrent Power
AEC
Gujarat Fluro
Chemicals
Indian Aluminium
Lanco Group
Jaypee
Associates
INDIAN CARBON TRADERS : PART II
Chennai
Petroleum
Refineries
Balrampur Chini
Jindal Vijaynagar
Steels
Orissa Sponge
Iron
9.
CONCLUSION
The greenhouse gas market has developed significantly over the past several years. From
a theoretical construct proposed by politicians and academics during the early to mid 1990s, to an
important part of the Kyoto Protocol in 1997 to what is today a vibrant and active market that has
seen in excess of 250 million tonnes of CO2 equivalent (tCO2eq) transacted. Analysts have
forecasted the size of the future global greenhouse gas market to range from US$10 billion to
US$1 trillion by 2010.
New greenhouse gas markets are emerging in countries, regions and corporate alliances
around the world. In order for prospective participants to successfully enter these new markets
they need to thoroughly understand their global nature and increasing complexity.
This new market offers effective risk management for companies with emission
constraints and substantial opportunities to companies and sponsors with emission reduction
projects. This document provides an overview of the greenhouse effect, Kyoto Protocol and
emerging greenhouse gas market and describes how companies/countries can manage their
energy resources and/or maximise their opportunity.
10.
REFERENCES
Books:
De, A.K." Environmental Chemistry", New Age International Ltd., 2001, Pg. 35-36
Henry, J.G., and Heinke, G.W.,: Environmental Science & Engineering -2nd Edition ,
Prentice Hall- India.
NATHASON JERRY, " Basic Environmental Technology", Prentice Hall India, 2002,
Pg. 419-421........article on global warming and green house gases
Nigel Bunce, : Environmental Chemistry , Wurz Publishing Limited, Winnipeg, Canada.
O’Callaghan, Paul.,: Energy Management , Mc Graw Hill.
Rao, S., and Dr. Paulekar, B.B.,: Energy Technology, Khanna Publishers, India, 2002.
Journals:
TEDDY
1999-2000
Year
book,
TERI,
New
Delhi
Saji Baby," Production of Green House gases", Nature Environment and Pollution
Technology,
2005,
Pg.
171-178
Saji, B.and Chacko, A.S." Green Internet for Green Environment: Combating green
house gases", Research journal of chemistry and environment, 2001, a-179, pp.64
Sinha, R.,: Carbon Sequestration Through Forestry - A Win Win Opportunity (137):
Indian Journal Of Environmental Protection, vol 25,number 2, feb 2005 .
Print Media:
Business Today, BT Trends, Carbon Currency Pg-14/Vol. 14, No. 8/ 24 April, 2005.
The Economic Times, ET Big Bucks Investor’s Guide/Vol No.2, Issue No.34/18 July
2005.
Glossary:
A
Afforestation
The process of establishing and growing forests on bare or cultivated land which has not
been forested in recent history.
B
Baseline and Baseline Scenario
The baseline represents the forecast emissions of a company, business unit or project,
using a business as usual scenario, often referred to as the 'baseline scenario' i.e. expected
emissions if the firm did not implement emission reduction activities. This forecast
incorporates the economic, financial, technological, regulatory and political
circumstances within which a firm operates.
C
Carbon Dioxide Equivalent (CO2eq)
The universal unit of measurement used to indicate the global warming potential (GWP)
of each of the 6 greenhouse gases. It is used to evaluate the impacts of releasing (or
avoiding the release of) different greenhouse gases.
Carbon Sink
A carbon sink is a reservoir that can absorb or “sequester” carbon dioxide from the
atmosphere. Forests are the most common form of sink, as well as soils, peat, permafrost,
ocean water and carbonate deposits in the deep ocean.
Commitment Period
The five year Kyoto Protocol Commitment Period is scheduled to run from calendar year
2008 to calendar year 2012 inclusive.
Credit
The term 'Credits' are used in a number of contexts, most commonly in relation to
emission reductions that have been achieved in excess of the required amount for:
Joint Implementation, also known as Emission Reduction Units (ERUs) or
Clean Development Mechanism projects, specifically known as Certified
Emission Reductions (CERs)
G
Global Warming Potential (GWP)
The GWP is an index that compares the relative potential of the 6 greenhouse gases to
contribute to global warming ie. the additional heat/energy which is retained in the
Earth’s ecosystem through the release of this gas into the atmosphere. The additional
heat/energy impact of all other greenhouse gases are compared with the impacts of
carbon dioxide (CO2) and referred to in terms of a CO2 equivalent (CO2eq) i.e. Carbon
dioxide has been designated a GWP of 1, Methane has a GWP of 23. The latest officially
released GWP figures are available from the IPCC in their publication Climate Change
2001: The Scientific Basis.
I
Intergovernmental Panel on Climate Change (IPCC)
The World Meteorological Organisation (WMO) and the United Nations Environment
Programme (UNEP) formed the Intergovernmental Panel on Climate Change (IPCC) in
1988. The IPCC represents the collective work of over 2,000 scientists, principally in the
atmospheric sciences, but also comprising social, economic and other environmental
components potentially impacted by climate change. Between its three Working Groups,
the IPCC assesses the scientific and socio-economic aspects of human-induced climate
change, as well as options for greenhouse gas reduction and other forms of climate
change mitigation. Its Task Force on National Greenhouse Gas Inventories is responsible
for overseeing the National Greenhouse Gas Inventories Programme (NGGIP).
The IPCC neither conducts original research nor monitors climate-related data, but its
periodic assessment reports and technical papers play a very important role in the
creation of climate change policies worldwide. The IPCC was instrumental in
establishing the Intergovernmental Negotiating Committee for the United Nations
Framework Convention on Climate Change (UNFCCC or the Convention) in 1992.