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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.