India is now looking forward to Barak Obama?s stand on climate change and green house gas emission issues, much of which would determine the country?s future in carbon trade.
SP Gonchaudhury, the green Oscar recipient, and also the managing director of West Bengal Green Energy Development Corp says, ?The sentiments would be bullish for carbon trading, if Barak Obama, the US president?elect, after taking over in January 2009 shows a bit of aggressiveness on green issues .
According environment and forest ministry sources, India a signatory of the Kyoto Protocol, has already made investments to generate above 30 million carbon credits annually up to 2012. More than 90% of its trade will depend on the US and the European Union?s issuance of carbon emission reduction (CER) certificates or carbon credits.
The EU was committed to cut 20% green house gas emissions by 2020 from the 1990 level, as against Kyoto?s target of 5.2% by 2012. But according to sources in the European Commission (EC) at Brussels, EU member states like Hungary, Romania, Bulgaria, Latvia, Poland and other eastern bloc countries have gone against the 20% reduction level and have asked the commission to set a lower target. If the commission finally reduces the emission level, carbon -trading worldwide will take a back seat, EC officials said.
In fact, the major carbon credit trading agencies in the US like the Merrill Lynch and Lehman Brothers have their membership in the Intercontinental Exchange and this gives access to the European Climate Exchange, the world?s largest emission trading exchange. However Lehman Brothers, immediately after filing bankruptcy protection in September, closed down its carbon trading desk and many others followed it giving a major blow to the carbon credit market.
K Umamaheswaran, deputy team leader of GTZ International Services, Carbon Procurement Unit, said trading has gone down drastically and the rates have come down from a level of Euro 20 per tonne of carbon saving to Euro 9-10 at present.
Gonchaudhury said the Euro 20 was an abnormally high rate and the total carbon credit market was being guided by sentiments rather than fundamentals. In fact, rates during 2006-07 was Euro 5-6 and this can stabilise at Euro 13-14 if sentiments are positive.
However, India has projects lined up for 450 million credits by 2020 and if the markets do not show positive signs, these may become unviable, environment ministry official said.