Presentation On Cc

Do you think that only a magician can make money out of thin air No, a Company can also do the same

By: Gunjan Ganatra Imran Parkar Kamlesh Prajapati Mitesh Doshi Nikhil Thakkar

Agenda Meaning and Background of CARBON CREDIT Trading Mechanism Emerging Issues for Chartered Accountants Criticisms Recent development in India

Meaning and Background  Meaning  Greenhouse Effects  United Nations Framework convention on Climate

Change (UNFCCC )  Kyoto Protocol and its Mechanisms

Mechanism of acquiring credit under Kyoto protocol Joint Implementation (JI)

JI

A system under which advanced countries jointly implement a project, and the countries that invest in the project can use the amount of emission reduced by the project to achieve their targets.

Advanced country A

Clean Development Mechanism (CDM)

CMD

ET

A system under which advanced countries sell and buy emissions to achieve their respective targets of emission reduction.

Advanced country B Joint emissions reduction projects

Amount of emission reduced Amount of emission reduced

Advanced country A

A system under which advanced country and a developing country jointly implement a project, and the country that invest (Advanced country) in the project can use the amount of emission reduced by the project to achieve their targets. Emissions Trading

Fund and Technology

Fund and Technology

Developing country B Joint emissions reduction projects

Amount of emission reduced Amount of emission reduced

Advanced country A

Money

Emission Allowance

Advanced country B Emission reduction in excess of target

Trading in Carbon Credits Markets and Price determination Indian Scenario

Price Determination

Indian Scenario India as a Potential Supplier Alliance of Multi Commodities Exchange (MCX) with

Chicago Climate Exchange (CCX) Brief idea of the Operations of the MCX

India as a Potential Supplier Can provide low cost low emission technology The World Bank has purchased CERs from 10

Indian Companies

Role of MCX MCX - First exchange in Asia to trade in carbon

credits Platform for buyers and seller Other advantages More than 112 companies trading in carbon credits

Emerging Issues for CAs Accounting Issues  Treatment in Financial Statements  Applicability of Accounting Standards

Taxation Issues  Direct Tax  Indirect Tax

Criticisms of Carbon Credit LICENSE TO INCREASE POLLUTION BY 25%

Installation of New Technologies

Increase in Product Cost

No Incentive for Preservation of Existing Forest

Reduction of Estimated Carbon Credit

reduction by 30% from estimated credit level

Looking into the Future Huge demand India contributes 43% MCX appoints IDEA carbon, Singapore a rating

agency as its Strategic advisor

Sources UNFCCC.int wikipedia.com rediff.com mcxindia.com ICAI Journal World Bank Report 2007 Vincentgioia.com IDBI.com