Such issues, obviously, need to be addressed without any loss of time because the carbon market may not remain the same for long. It is now being increasingly realised that this mode of CDM is neither an efficient way of ensuring reduction in the emission of environment-unfriendly greenhouse gases (GHGs) nor is it helping in achieving the goal of reversing the process of global warming and climate change to the desired level. It can, at best, be viewed as a politically convenient and cost-effective way out, conceived by the rich countries to let their industry continue to pollute the environment even while meeting the mandatory emission reduction obligations by buying the carbon credits from the poor countries. No wonder then that while the value of the traded carbon has nearly doubled in the past one year, the actual GHGs emission reduction has been just about 7 per cent. Even the European Union (EU), which accounts for nearly two-thirds of the global carbon market, has seen through it. Consequently, the EU has mooted a proposal in the ongoing talks on drawing up a successor to the Kyoto Protocol on climate change, which is expiring in 2012. The proposal seeks to put a cap on CER purchases from India and China unless these countries also take on mandatory sector-specific energy-efficiency targets. Though India and other developing countries, relying heavily on coal and conventional fuels for their economic development, are unlikely to accede to this demand, the going is bound to get tough for them. So the best course for India Inc., especially the small CDM companies, is to make the best of the present opportunity by pooling together their CERs to attract big buyers. This approach can help them even in the future to adapt to whatever new form the carbon trading takes under the post-Kyoto pact on climate change.
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