Tuesday, Jul 01, 2003
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By Our Special Correspondent
The trading is part of a formula arrived at a United Nations climate conference to give "credits" to developed countries if they assisted developing countries in the setting up of "clean projects". The trading regime looks at the problem on hand the heating up of the earth's atmosphere as a result of emission of greenhouse gases, a vast majority of which is from the developed countries as an opportunity to strengthen the efficiency of energy production and industries in the third world and, at the same time, compensate the developed world with "credits". Typical projects include substitution of fossil fuel-powered electricity generation with renewable energy and improvement in industrial or commercial energy efficiency.
Refuting allegations that the Ministry was stalling clearances for such trading, Mr. Baalu said that this ``mistaken notion'' could be because there still remained doubts on the nature of the trade itself.
A report of the U.N. Environment Programme's Financial Initiatives (a partnership between UNEP and 295 banks, insurance and investment companies), estimated that the annual trading of greenhouse gases, emerging as a result of international agreements to reduce emissions, could be worth as much as $ two trillion by 2012.
The trading is important to the developed countries because they too stand to gain. Under the Kyoto Protocol, industrialised countries with greenhouse gas emission targets are allowed to take credit for projects overseas. These are known as "offsets" as they offset the emissions of greenhouse gas emissions in the investor country. Offsets can take place either in developing countries through the CDM or other industrialised countries through Joint Implementation projects.
Under the 1997 Protocol, developed countries have to reduce their average emission of green house gases - which heat up the atmosphere by five per cent by the period 2008-2112 (although Australia and the U.S., citing concerns over economic impacts, have withdrawn from the agreement). The Protocol will enter into force 90 days after it has been ratified by the Russian Federation.
Mr. Baalu, who is also the chairman of the eighth Conference of Parties to the United Nations Framework Convention on Climate Change, said that he was hopeful that Russia would ratify the treaty at an early date. "I understand that they are still studying the Protocol and its implications. We expect a positive response in the near future," he said.
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