New Delhi: The global carbon market is watching the ongoing United Nations climate change conference at Bali closely because decisions taken there on processes and technologies that will be eligible for carbon credits under the Clean Development Mechanism (CDM) could give it a fillip.
The carbon market grew three times to $30 billion in 2006, according to the World Bank, and it is expected to maintain its torrid pace of growth for at least a few more years. China and India are the leading players in the carbon credit market.
The conference at Bali is already discussing some of the new processes and mechanisms that will beeligible for carbon creditsincluding avoiding deforestation, using carboncapture and storage (CCS) technologies, manufacturing hydrochlorofluorocarbons (HCFCs), and using nuclear energy.
Carbon credits are critical for both developed and developing countries. Developed nations, which are mandated to cut their CO2 emissions annually by certain targets, buy these credits, which are, in turn, generated by carbon reduction projects in developing countries.
“The issue of carbon credits from the destruction of HFC-23 gas (a highly potent global warming gas) has been highly controversial,” said an Indian government delegate at the Bali conference, who did not wish tobe identified.
HFC-23 is a waste gas, generated during the production of refrigerant gases. Most of China’s carbon credits have been through this process. About 48% of carbon credits issued globally and 54% isssued to India have been for the destruction of HFC-23. The issue with this is that in some cases, countries may be encouraging the setting up of environmentally unsound refrigerant gas manufacturing facilities, just so they can benefit by destroying the HFC-23 these plants produce as a by-product.
“China is lobbying hard to get the UN to allow new refrigerant gas plants to be eligible for earning carbon credits from the destruction of HFC-23, but the European Union is strongly opposed to this because the profits such factories earn from carbon credits is much more than what they earn through the sale of refrigerant gases. It defeats the sustainability objective of Kyoto,” said the same delegate.
The other issue of CCS is also being thrashed out at the discussions. CCS, however, is not yet top priority for deliberations as it is a very new concept and yet to be tried out on a massive commercial scale.
CCS involves the capture of CO2 emissions from coal-based power plants and burying them deep inside the ground. “It has been agreed by countries that CCS, if it works, is an excellent idea and its future seems postitive. However, its economics are not known and there are no big plants which have operationalized this,” the delegate added.
Negotiations on these will continue through this week.