People2People Carbon Trading

11 02 2007

This report was part of a media fellowship given by ICRISAT, Hyderabad to write on environment and water. It recounts an attempt to transcend the Government to Government deadlock in the Kyoto agreement by initiating people to people carbon trading and getting individuals and institutions to take responsibility for their carbon emissions.

Break the Kyoto deadlock


ANIKET ALAM surveys the “people-to-people” carbon trading as a solution to the impasse over the Kyoto Protocol.




Gond women of Powerguda village in their Pongamia nursery.

BY selling 147 tons of verified carbon dioxide reductions directly to the World Bank in October 2003, a tribal hamlet in Andhra Pradesh’s Adilabad district may have shown the world a way out of the global deadlock over the Kyoto Protocol on environment protection.

The World Bank paid $ 645 (about Rs. 29,000) to the women’s Self-Help Group (SHG) in Powerguda village to neutralise emissions caused by air travel and local transport undertaken by international participants for a conference in Washington D.C., the U.S.

The emission reduction was quantified thus: 4,500 pongamia trees planted by them in 2002 would yield 51 tonnes of pongamia oil substituting for petroleum diesel over 10 years.

The villagers were using Pongamia oil as a substitute for diesel to power their generators to produce electricity. Diesel engines run well on pongamia oil and there is zero emission since all the carbon dioxide released is sequestered from the atmosphere itself.

The International Crop Research Institute for the Semi Arid Tropics (ICRISAT) at Patancheru, Andhra Pradesh, followed this example recently when it paid Siryanmovad village Rs. 24,000 for carbon dioxide emission caused by transporting participants for a workshop held from May 6 to 8.

Emmanuel D’Silva, a former World Bank employee and originator of the idea, contends that if enough individuals, institutions and corporation pay for their carbon emissions, the Kyoto Protocol will effectively be operational, despite opposition from powerful countries like the U.S. and Russia.

“People-to-people” carbon trading is Dr. D’Silva’s solution to the impasse over the issue. “Rather than one country paying another, it makes more sense for `polluters’ to pay directly to those who are actually sequestering the atmospheric carbon dioxide or are reducing carbon dioxide emissions,” he says.

To be replicated successfully, a dependable system of verifying carbon reduction has to be in place. In the case of Powerguda, ICRISAT verified the degree of carbon reduction. Other research institutions and government agencies can also provide such verification, Dr. D’Silva says.

Moves are afoot to involve the Indian corporate sector through the good offices of Confederation of Indian Industries (CII) and the Federatin of Chamber of Commberce and Industry (FICCI).

The proposal is to build a Carbon Development Fund, which would buy and sell carbon emissions as verified by ICRISAT and similar organisations.

S.P. Wani, who leads the ICRISAT team on watershed development, wants to take this experiment further in order to “break the unholy nexus between water and energy”. He said: “Assured electricity equals assured water supply for crops in the semi-arid tropics. This encourages more efficient water use in water-stressed areas.”

Kishtapur village in the same district is taking a lead in this with two of its SHGs gearing to generate electricity from pongamia oil to run the borewells that irrigate their fields. The farmers have agreed to pay three rupees for a kilolitre of irrigation water to sustain the SHGs.

Using zero emission bio-diesel to encourage more responsible water use by farmers links the two crucial issues of pollution and conservation of natural resources into one single strand and points to the way ahead.


* * *

IN 1997, a gathering of countries at Kyoto (Japan) to discuss global warming adopted an addendum to the United Nations Framework Convention on Climate Change, now known as the Kyoto Protocol. This mandates reduction of the six most lethal “greenhouse gasses” to pre-1990 levels in developed countries, the main polluters, while laying out incentives to developing countries to promote environmentally friendly industrialisation.

The six “greenhouse gasses” contributing to this global warming are Carbon dioxide, Methane, Nitrous oxide, Hydrofluorocarbons, Perflurocarbons, Sulphur Hexafluoride. The signatory countries are expected to ratify the Protocol and enact it into law at the earliest. At present 84 countries have signed the Protocol but major global polluters like the U.S. (which is estimated to contribute about 39 per cent of the total global emission) have refused to do so. Without the U.S.’s participation, the Protocol is meaningless, even though the other major emitters of “greenhouse gasses” — Europe and Japan — have ratified it.

The Protocol does envisage a situation where some of the developed countries would not be able to reduce their “greenhouse gas” emission below the 1990 levels. So, special “Clean Development Mechanism” has been developed to allow polluters to “buy” carbon credits from those who have either managed to reduce their emissions to levels lower than expected or have taken steps to sequester carbon in “carbon sinks”.

Developing countries, which have invested in large afforestation programmes, cleaner technologies for their industries and have protected their environment would accumulate “carbon credits” for these efforts, which they can “sell” to the polluters. Specialised agencies have been accredited to verify and certify the carbon reductions and carbon sequestering achieved. Specialised carbon markets are evolving to address this unique trade.

The present attempt in Adilabad district of Andhra Pradesh and in other places is to sidestep this impasse between Governments by shifting the entire onus of carbon reduction from Governments to individual players, such as corporations, institutions, or private persons.




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