Green Power - Reducing the carbon footprint

• By: Admin
• Date: December 14, 2009

To bring CO2 emissions back to current levels in 2050, all options are needed at a cost of up to $50 per ton CO2, according to the report. No single form of energy or technology can provide the full solution. The measure call in for a virtual decarbonization of the electricity production. This means all of the fossil fuel based production units need to equip themselves with CO2 capture and storage technology. Alternatively increase capacity of nuclear plants and wind turbines significantly. A huge effort will be required on reducing CO2 emmissions from the transport sector. All growing things absorb carbon from the atmosphere and trap it in the soil. Measure are required not to allow this trapped carbon to be released back into the environment by way of harvesting or deforestation. Radical steps need to be taken to reduce the use of such resources as fuel and for power generation. Alternatives need to be developed so that less credits are purchased.

Carbon Credits - What and How?

Carbon Credits are an attempt to mitigate the growth in concentrations of green house gases. One carbon credit is equivalent to sequestration of one ton of CO2 or similar gases from the atmosphere. Members who are signatories to the Kyoto Agreement of 1997 have pledged to reduce their carbon footprint to a predetermined amount. One can buy carbon credits from companies with an interest to reduce on your carbon footprints on voluntary basis. The money that purchases carbon credits will ultimately be used to give grants to further carbon saving schemes. Though this is a step forward in reducing the impact of CO2, criticisms are abound on the efficacy of this arrangement as companies will continue to pollute without any penalty if they have perchased enough carbon credits.

There are two distinct types of Carbon Credits: Carbon Offset Credits (COC's) and Carbon Reduction Credits (CRC's). Carbon Offset Credits consist of clean forms of energy production - wind, solar, hydro and biofuels. Carbon Reduction Credits consists of the collection and storage of Carbon from our atmosphere through biosequestration (reforestation, forestation), ocean and soil collection and storage efforts. Carbon credits create a market for reducing greenhouse emissions by giving a monetary value to the cost of polluting the air. Emissions become an internal cost of doing business and are visible on the balance sheet alongside raw materials and other liabilities or assets.

Carbon credits can be earned by:

• Clean development mechanism (CDM): Project-based emission reduction activities in developing countries. If the company percieves that the investment on machinery for controling CO2 emmissions at the current setup is not feasible, it can sponsor a project for a different group which aims to reduce carbon dioxide emmissions equivalent to the mandated amount.
• Joint implementation (JI): Two developed countries can invest in emission mitigation projects, generating ERUs
  
• International emission trading (IET): Credit deficient and credit surplus countries (that have ratified the Kyoto Protocol) can trade carbon credits at specialised exchanges (European Climate Exchange, Chicago Climate Exchange, UK’s CO2E Exchange)
  

Carbon Credit Market

Buyers

• EU and Japan main buyers (apx >60%)
• Private and government
  
• Of total purchased volumes, private entities accounted for 69%
  
• Govt of Netherlands single largest buyer, accounted for more than 16%
  

Sellers

• Mainly HFC producing countries
• Asia and Latin America main sellers (45% & 35%, respectively)
  
• India, Brazil, and Chile together account for ~58%
  
• India as of now the largest producer of carbon credits and highest country rating
  
• Other participants include OECD countries and voluntary projects in USA
  

References

• www.srf.com/Inv/SRFCarbonCreditoverview.pdf
  
• http://en.wikipedia.org/wiki/Green_energy
  
• http://en.wikipedia.org/wiki/Carbon_credits
• http://en.wikipedia.org/wiki/Kyoto_Protocol#Emissions_trading

Green Energy