Kyoto Protocol And Business Opportunities

Kyoto protocol –a great business opportunity!

.What is Kyoto protocol? - History  united nations framework convention on climatic change  ratification . Member’s obligation  reduction of carbon dioxide and other greenhouse gasses  Do developing nations have also to go hardship?  Can members trade carbon produced in there country?  Levels to achieve by 2008-20012 . Business opportunity  cost of implementation  cost benefit analysis  Do developing nations have an edge? . India’s prospects  resources  government assistance .Threats  non ratification by one of the leading producer of carbon dioxide

What is Kyoto protocol? History – The concept of sustainable development dates back a long way but it was at the UN Conference on Human Environment (Stockholm, 1972) that the international community met for the first time to consider global environment and development needs.

It is actually an amendment to the United Nations Framework Convention on Climate Change (UNFCCC). Countries that ratify this protocol commit to reduce their emissions of carbon dioxide and five other greenhouse gases, or engage in emissions trading if they maintain or increase emissions of these gases. Ratification – The treaty was negotiated in Kyoto, Japan in December 1997, opened for signature on March 16, 1998, and closed on March 15, 1999. The agreement came into force on February 16, 2005 following ratification by Russia on November 18, 2004. As of September 2005, a total of 156 countries have ratified the agreement (representing over 61% of global emissions).

Participation in the Kyoto Protocol, where dark green indicates countries that have signed and ratified the treaty and yellow indicates states that have signed and hope to ratify the treaty. Notably, Australia and the United States have signed but, currently, decline to ratify it. Members obligation The protocol commits 38 industrialized countries to cut their emissions of greenhouse gases between 2008 to 2012 to levels that are 5.2 per cent below 1990 levels. National targets range from 8% reductions for the European Union and some others to 7% for the US, 6% for Japan, 0% for Russia, and permitted increases of 8% for Australia and 10% for Iceland." Do developing nations also have to suffer hardship – The largest share of historical and current global emissions of greenhouse gases has originated in developed countries and since

the per-capita emission rates of the developing countries are a tiny fraction of those in the developed world the developing countries have been exempted from implementation for reduction of ghg gasses. Can members trade carbon produced in there country – (Emission trading) Every country would be assigned a specified quota for production of ghg gasses. Assigned amount units (AAUs), assigned to each country under the Protocol, based on the country's emission reduction target, and may be traded on the IET market, along with other tradable units established by the protocol:   

emission reduction units (ERUs), created through joint implementation projects; certified emission reduction units (CERs), created through clean development mechanism (CDM) projects; and Removal units (RMUs), created through carbon-sink (land-use) projects.

The Marrakesh Accords (7th Conference of the Parties) (the Accords) under the Protocol allow for businesses, non-governmental organizations and other legal entities to participate in IET, joint implementation projects and CDM projects, under the authority and responsibility of parties to the Protocol. Business opportunity The business community is clearly signaling the pro-Kyoto route governments must take. Catalyst Paper, a leading North American paper producer has joined WWF's Climate Savers Program and pledged to reduce its CO2 emissions 70 per cent below 1990 levels by 2010. COME GLOBALISATION and trade take on different hues-Trading of carbon credits or more specifically carbon dioxide credits between developing and developed nations. This becomes particularly relevant

when CO {-2} emissions from developed countries are way beyond those from the developing countries. Cost benefit analysis – It is possible to try to evaluate the Kyoto Protocol by comparing costs and gains, though there are large uncertainties. Economic analyses disagree as to whether the Kyoto Protocol is more expensive than the global warming that it avoids; the recent Copenhagen consensus project analysis found it to have an overall benefit, though less than an "optimal" carbon tax. Do developing nations have an edge? The catch however is the cost — developed countries have to spend nearly $300-500 for every tonne reduction in CO {-2} emission. Contrast this with $10-25 to be spent by the developing countries. The stage is thus set for trade to flourish. Trading carbon credits is hence seen as a less expensive option. Yet, there is a limit to which developed nations can buy credits. Recent developments – In March this year, Det Norske Veritas (DNV) of Oslo, Norway, well known in the field of ISO certification was accredited by the UN to act as a validating body. The first organization to get the accreditation, DNV has already lapped a few projects around the world. India’s prospects – The Clean Development Mechanism enshrined in the Kyoto Protocol gives Indian industry, the opportunity to implement greenhouse gas reduction projects taking advantage of the markets for trading emissions. Such trading will also make a large variety of energy conservation and alternative energy projects more viable. A number of trading systems are active in North America and Europe.

Another advantage of implanting cleaner and sustainable technologies is the ability to avail funding from Prototype carbon Fund which is under the aegis of the World Bank. The fund is formed by contributions from many developed nations. Threats ------The United States and Australia have not yet ratified the contract. United States being the largest producer of the the greenhouse gasses , it becomes quite imperative to have the u.s ratify the protocol for the overall implementation and success of the project .