CII-ER sees carbon trading at Rs 1,000 cr

The size of the global Clean Development Mechanism (CDM) market is estimated to be around $20 billion.

While India is the leader among the developing countries in this field and is expected to take up 20 to 25 per cent of CDM projects, eastern states like Orissa, Bihar, Jharkhand and West Bengal can benefit out of it.

These states have great opportunity to reduce emission of green house gases by undertaking CDM projects, S K Panigrahi, Director, environment and forest (CDM) of Planning Commission said here.

Addressing the participants in a seminar on Clean Development Mechanism (CDM) organised by Confederation of Indian Industry (CII)-Orissa, Panigrahi said, by 2012 the eastern states will have a potential of Rs.1,000 crore for carbon trading. Orissa's share out of it will be around Rs.250 crore. Power, steel and chemical, mining, transport and agriculture sectors are the high potential areas, he pointed out.

Since reducing green house effect was a global concern, incentives are being given for reducing harmful gas emission and protect nature. Orissa super cyclone of 1999 and recent Mumbai floods were the impacts of the global warming, he observed.

The CDM mechanism was evolved to reduce the emission of six gases believed to be main contributor to climate change. Out of these, carbon dioxide, methane, and nitrous oxide are most frequently found toxic gases.

Stating that more than 33 percent of the total projects approved globally are from India, he said, while 746 CDM projects were approved world wide, 247 of them were from India. As the cost of the Certified Emission Reduction (CER) is between 3-20 Euros, the small projects for reduction of green house gases can be taken up in the state. Various Indian companies are expected to invest about Rs. 29,000 crore by 2012.

Explaining the process of CDM, Panigrahi said, it is a process of selling credits to the developed countries by developing countries.

As India lacked any emission reduction target and the per capita emission is low compared to neighbouring China, Germany and United States, the country can make use of the situation to earn as much carbon credit as possible. However, there is need for infusion of technology and investment in this sector, he added.

Stating that internal rate of return (IRR) is a vital consideration for taking up projects under CDM, he said, solid waste management (methane recovery) has a high IRR. Besides, the government of India is targeting to add 1 lakh megawatt of power during the 11th plan period, which opens opportunities for a large number of CDM projects.

Carbon as a compliant commodity has also been listed in the commodity exchange making the trading of carbon units more attractive, he said.

Hrusikesh Panda, principal secretary of state forest and environment department of Government of Orissa suggested for reforms in the utilisation of fly ash. The government can ensure utilisation of fly ash in certain radius of the power plants and ban the making of clay bricks in that area.

Stating that poverty anywhere is a threat to prosperity every where, he said, unemployment and poverty has increased in the state despite industrialisation and increased mining activities. In this context he advised to change the prevailing land acquisition act to provide better compensation for land losers.

State energy minister S N Patro, Santosh K Mohapatra and representatives from different industries were present on this occasion.