Equity versus atmospheric carbon space

By: Kaavya Nag

For as long as countries have come together to talk about climate change and what to do about it, one of the core issues of debate has been how to apportion the responsibility of reducing carbon dioxide emissions, in a fair and equitable manner.

The inheritance of this carbon-dioxide burden, is not equal among countries. Historically, some are more responsible than others. The issue of who will do how much, and in what proportion to their historical resposibilities (called 'Common But Differentiated Responsibilities (CBDR) in climate jargon), has become an issue without whose resolution a solution to climate change is not likely. 

India has historically hardlined for this CBDR principle (as have most developing countries), but has stuck to a per-capita approach to emissions.The arguement has long been that the per capita emissions of an average Indian are much lower than even the global average, and that India and Indians therefore, have the 'right to develop' (since development implies an increase in emissions). 

Recently however, there has been some independent thinking from scientists and academicians within India, asking for a reasessment of the per capita approach. Key scientific associations involved in the debate are the Delhi Science Forum (DSF) and the Tata Institute of Social Sciences (TISS). These and other organisations including the Centre for Policy and Resarch, have been pushing the Indian government to look at a slightly different approach to emissions, considering the rapid rate with which India's emissions are growing.

In this context, TISS has come out with a model that reallocates the available 'carbon space' of the atmosphere while ensuring that the total sum of emissions does not exceed the estimated dangerous limit. The model has been constructed based on a realistic evaluation of the current occupation of carbon space by countries. 

The report indicates that many developing countries have not utilised their full proportion of 'available' carbon space (subject to industrialised countries that currently use up that space making it available for countries like India), which is close to 17% of atmospheric carbon dioxide levels by 2050, while carbon space is around 4 %.

Admitted, India needs to develop in order to alleviate poverty, raise standards of living and increase capacity to adapt to the adverse impacts of climate change. But can it do so while making a conscious effort to move towards a low-carbon economy, and not utilise its full quota of future carbon space?

Read the report:  Meeting equity in a finite carbon world

From markets with love

By: Viva Kermani

The carbon super market may just get another goodie!

At the Carbon Expo, carbon traders are discussing the launch of the Green Bond or International Carbon Bond. Like the Clean Development Mechanism (CDM)  that pays developing countries to reduce  GHG emissions , the Green Bond will do just the same.

To the uninitiated, the CDM is the principal tool for engaging with developing countries on mitigation policy. This allows developed country governments and companies to meet emissions reduction targets in part by purchasing certified emissions reduction credits (CERs) which they receive in return for financing projects in developing countries which reduce emissions. This is also known as “offsetting”.

India and China are the leading countries in CDM projects but recently China has over taken India. While India entered the CDM market in 2003, the size of projects is small – largely driven by  mid-sized companies. However this could change, should some of the Indian Public Sector Units chose to enter the carbon markets.

 Like some  bonds, including Daniel Craig, this is also hot .And here is why.                                    

Unlike the CDM process where there is a lengthy review process, with the Green Bond, the money is paid up front by investors and the returns guaranteed to the investor. The Investor then would be free to trade the bonds in international market. 

And here is the sweet spot.It would be like a sovereign debt.So if the project fails and there is no reduction in emissions,the investor is protected as the bond is backed by the World Bank or some such financial institution.

So if you want to make some quick bucks, watch this space and keep in touch with your investment banker - he is very likely to sell you the bond and not the sun.