industrialised countries agreeing to binding commitments after the first commitment period of the Kyoto Protocol ending December 2012, which has led to an oversupply of such CERs with no buyers. The Kyoto Protocol came into effect in 2005.
Under the Kyoto Protocol, companies from developing countries earn CER or a carbon credit for each tonne of carbon dioxide emission they avoid. These carbon credits can be sold to companies or governments in developed countries that are under mandatory obligation to reduce carbon gas emissions. The buyers can then offset their own targets against the CERs they purchase from companies in developing countries under the CDM.
Interestingly, the environment ministry said that carbon credits earned via the clean development projects in India are set to generate Rs 4,775 crore, up 20% from Rs 3,950 crore last year. With 795 registered projects, of the 3,930 projects registered with UN Framework Convention on Climate Change, India ranks second in CERs after China.