What is Kyoto Protocol?

• It is a global climate change treaty
• It is committing the industrialized nations to specify legally binding reductions in emissions of 6 green house gases. One of the major is Carbon–di-Oxide
• On February 190O, 84 countries have signed the treaty including USA, European members, Canada, Japan, China and 22 countries were reported by UNFCCC Secretariat

Clean Development Mechanism (CDM)

• Under Article 12 of Kyoto Protocol CDM enables reduction commitments by developed countries in a flexible manner
• Developed countries will be allowed to invest in GHG emission reduction projects in developing countries and the major focus will be on India
• India has huge scope in energy sector because of fossil fuel base. At present 70% is coming from fossil fuel
• In return investment parties will receive credits or certified emission reductions that will be used to meet the target defined in Kyoto Protocol

Project Qualifying GHG reductions under Kyoto Protocol (COP-7)

• Energy efficiency improvement project
• Projects which will lead to GHG reduction directly

Provisions under prototype carbon fund (PCF)

• On 20th July 1999, executive directors of World Bank approved the establishment of the PCF
• PCF is intended to invest in projects that will produce high quality GHG emission
• PCF will invest contributions made by companies and Government in Project design to produce emission reduction fully consistent with Kyoto Protocol

Global Opportunity for Emission reduction market

• 1 billion tons of carbon emission per year, during the commitment period of 1908-2012 to meet obligation of 5% reduction
• The major market opportunity for carbon reduction is energy sector in all developing countries
• India is one of the major countries having plans to invest in energy sector because 40 cr. of Indian population is deprived of commercial sources of energy
• Govt. of India under recent Rural Electrification policy plans to go for renewable based stand alone systems for their energy needs