Carbon trading gets new platform

NEW DELHI/CHANDIGARH: A Form of carbon trading that falls outside the Kyoto Protocol seems to have caught the attention of Indian entities. US-based company Chicago Climate Exchange (CCX), which legally binds its members to meet greenhouse gas emission caps set by it, is luring sellers of carbon credits in India to trade with companies in the US. CCX currently has over 300 members, including IBM, DuPont and Motorola besides local and state governments such as the city of Berkeley and the state of New Mexico.

The complex clearance processes under the Clean Development Mechanism of the Kyoto Protocol have been cited as the reason behind alternative trading through companies such as CCX that have a greenhouse gas emissions allowance trading system. An allowance or carbon credit earned by reducing emissions can be traded at a price with entities that need the allowance to meet their emission caps.

A Kerala-based NGO, Anthyodaya, has become the first Indian entity to become a member of CCX, joining counterparts from other developing countries such as Brazil. Talks are on with other NGOs for tie-ups. Anthyodaya’s project involves 20,000 rural households that use biogas for cooking. The methane captured and burnt would earn the NGO allowances which it can sell through CCX to entities in the US. The rate at which allowances are sold is fixed by CCX at $4 per allowance.

“Once the project is in place and running, every farmer would get an average of Rs 1,000 annually,” Anthyodaya executive director Peter Thettayil said. While the first phase involves 20,000 biogas plants throughout Kerala, in the second phase the NGO intends to include institutions for setting up biogas plants with higher capacities that vary from 6 cubic metre to 35 cubic metre.

The US, one of the biggest polluters in the world, has not ratified the Kyoto Protocol that sets emission caps on developed countries. However, even as the US refuses to emission caps at the country level, states such as California have set their own emission caps and companies volunteer to take up caps by entering into legal contracts with CCX.