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161 of 232 CDM projects in the Asia-Pacific are in India

By Rahul Goswami

India accounts for 161 of the Asia-Pacific region's 232 projects "in the pipeline". The 134 projects cleared so far amount to an investment of over Rs 10,000 crore in technologies and systems designed to reduce fossil fuel use, increase efficiencies of industrial processes and switch from fossil fuels to renewable sources of energy like biomass. It is a big market and is growing rapidly. Analysts have forecast the size of the future global greenhouse gas market to range from US$ 10 billion to US$ 1 trillion by 2010. Significant trading activity is already underway with dedicated 'carbon exchanges' -- such as the Chicago Climate Exchange and the Asia Carbon Exchange -- having been established.

That much of this trading has taken place well ahead of legislation indicates the speed at which industry is seizing the opportunity. Hundreds of trades have been completed in the international markets, corresponding to approximately 250 million tCO2eq (tonnes of CO2 equivalent).

Carbon dioxide represents just a few hundred parts per million (ppm) of the overall atmosphere, but this tiny component (0.037% of the atmosphere) helps warm the earth to a comfortable level. Too much of this gas in the atmosphere can do a lot of damage, however, because it is CO2 that allows sunlight to stream in but prevents much of the heat from radiating back out. During the last Ice Age, the atmospheric concentration of CO2 was just 180 ppm, freezing the earth. After the glaciers retreated, the total had risen to a comfortable 280 ppm. In just the last 150 years, we have pushed that level to 381 ppm. As a result, the earth is heating up. Of the 20 hottest years on record, 19 occurred in or after the 1980s.

Are increases in trace gases, particularly CO2, the result of people’s activities? The vast majority of scientists believe so. First, the increase is much larger than the natural variability of CO2 concentrations over thousands of years. Second, they know how much coal and oil industrial-age societies have burned and how much forest they have cut down, and these factors are enough to account for the increase. The combustion of fossil fuels like coal, oil and gas, takes carbon that has been locked beneath the earth’s surface for millions of years and releases it into the atmosphere. Third, isotope analysis of the carbon in atmospheric CO2 suggests that much of the increase did come from the burning of fossil fuels. Fourth, complex models of the carbon cycle that represents important processes and feedback between the atmosphere, biosphere and oceans cannot explain the observed changes in CO2 without the human component.

Several Indian companies that are implementing CDM projects are thought to have agreements to deliver CERs at various stages during the 2008-2012 period, for around â"Ã…¡Ãƒ"šÃ‚¬ 15/CER (US$ 17.5 at current rates). Karnataka, Andhra Pradesh, Rajasthan and Tamil Nadu have emerged as the most active host states in the country. Indeed, a unit in Rajasthan, SRF Ltd, is to deliver 500,000 CERs to Shell Trading International by April 2007. This agreement, approved by India's CDM authority, is amongst the largest committed to by an Indian company to date. SRF Ltd is the biggest nylon tyre cord fabric producer in the country and the eighth largest in the world.

listing of CDM projets under way in India till January 2006

(Rahul Goswami is an independent journalist and researcher based in Goa)

InfoChange News & Features, June 2006