INTRODUCTION

The following project is about “Carbon Bank”.

"Carbon Bank" is a term used to describe the international effort to reduce carbon
gas emissions (Carbon dioxide, Methane, CFC's etc) which may contribute to global
warming. An industrialized nation may produce more than its share and a less
developed nation may be provided incentives for not destroying its rain forests such
as food aid and so on, since plant life, and especially the very rich plant life of the
tropical rain forests removes carbon dioxide from the air by photosynthesis.

AIMS AND OBJECTIVES

The aim of this project is to study about the global organisation working towards
protection and sustainable development of the environment. This global organisation
is named “Carbon Bank”.

This project deals with the measures taken by this organisation to reduce the
emission of carbon compounds like carbon monoxide, carbon dioxide, methane, etc.
in the environment through various human sources like mining, deforestation,
industrialisation, globalisation and urbanisation.

It also gives an insight into the effects and changes that this organisation has
brought about along with studying it’s pros and cons.

The main objective is to make the people more aware of the present sad plight of our
environment and bringing to light the effects of our own luxurious lifestyles and
needs on the innocent, life-saving environment.

ACTUAL CONTENT

Effects of Climate Change: 

We will not attempt to list all the projected effects that climate change will have on
humanity, they range from sea level rises to failure of the monsoon, from population
displacement to desertification. The fact is that almost every scientist of note agrees
that climate change will affect humanity and the way our societies function.
The effects of climate change are being felt worldwide now and our energies must be
focused on learning to live with those changes. It is only by finding a way to live in
harmony with these changes that humanity stands a chance of continuing to flourish.

"Carbon Bank" is a term used to describe the international effort to reduce carbon
gas emissions (Carbon dioxide, Methane, CFC's etc) which may contribute to global
warming. An industrialized nation may produce more than its share and a less
developed nation may be provided incentives for not destroying its rain forests such
as food aid and so on, since plant life, and especially the very rich plant life of the
tropical rain forests removes carbon dioxide from the air by photosynthesis.

The growing pressure on countries to address climate change has given rise to a
multi-million dollar international market for buying and selling emissions of
greenhouse gases.   Under the Kyoto Protocol which came into force in February
2005, industrialized countries agreed to collectively reduce emissions of greenhouse
gases by 5 percent by 2012 compared to 1990 levels. They can reduce emissions by
investing in cleaner technologies at home, trading in emissions rights, or buying
carbon credits from projects in developing countries such as India. Carbon credits
are thus bought and sold in the international carbon market - much like any other
commodity.  
 
Ever since it was established in 2001, the carbon market has captured the
imagination of Indian entrepreneurs.  The majority of projects that have sold carbon
credits so far include renewable energy (such as wind power, biomass cogeneration
and hydropower); energy efficiency measures in several sectors ( such as cement,
petro-chemicals and power generation); as well as the reduction of industrial gases
that contribute to climate change.
 
The carbon market is already the fastest growing market in the world.   Between
2003 and 2004, the volume of carbon credits sold by developing countries doubled,
and then tripled between 2004 and 2005.  In 2006 alone, carbon transactions worth
$30 billion were conducted globally, transferring some $5 billion from the countries of
the global north to the global south. 
 
Of the total number of carbon contracts signed in the world so far, India has the
second largest portfolio with a market share of 12 percent, behind China which had a
market share of 61percent. 

Carbon emissions trading

Carbon emissions trading is a form of emissions trading that specifically

targets carbon dioxide (calculated in tonnes of carbon dioxide equivalent or tCO2e)
and it currently constitutes the bulk of emissions trading.
This form of permit trading is a common method countries utilize in order to meet
their obligations specified by the Kyoto Protocol; namely the reduction of carbon
emissions in an attempt to reduce (mitigate) future climate change.

Carbon trading

The fundamental idea behind carbon trading is that businesses will pollute less if
they have to pay for polluting. Since regulations are seen as a less threatening, if not
a more subtle, method than the direct method of levying taxes, politicians see this as
an easier hand to play with businesses in an effort to require business transition to a
greener world.

Conceptually, carbon trading works like this. A government allows businesses to

purchase a finite amount of carbon credits in the form of an allotment. Businesses
can then use this allotment for carbon emissions without incurring a penalty.
However, if a business runs out of credits and it still needs to release carbon
emissions, the business is responsible for finding another business that is willing to
sell them a carbon credit. The polluting business buys the credits from the non-
polluting business, while it transitions to less polluting resources.

In the event that a business is unable to purchase additional credits from another
business, the company will not be able to release any more pollutants, plain and
simple. Rather than face being blamed for shutting down businesses and throwing
people out of jobs, when businesses make the transition to a greener world, some
governments plan to initially set a level at which they will sell the needed credits

The next question, of course, is: How are carbon emissions allotted? Initially, the
government determines how much industry will be allowed to pollute and puts a
carbon cap on its emissions. Then over time, the government lowers the cap. The
premise is that eventually the government will reduce the cap to a minimum that will
allow business to continue its operations (without hurting or destroying the country's
existing businesses and job base) while helping it transition to a newer, greener
world. Again the details of how the allocation by individual company will be done are
short on details and steps and long on trust us, your friendly politicians and
bureaucrats to do the right thing.

Personal carbon trading refers to proposed emissions trading schemes under

which emissions credits are allocated to adult individuals on a (broadly) equal per
capita basis, within national carbon budgets. Individuals then surrender these credits
when buying fuel or electricity. Individuals wanting or needing to emit at a level
above that permitted by their initial allocation would be able to engage in emissions
trading and purchase additional credits. Conversely, those individuals who emit at a
level below that permitted by their initial allocation have the opportunity to sell their
surplus credits. Thus, individual trading under Personal Carbon Trading is similar to
the trading of companies under EU ETS.
Individuals would most likely hold their emissions credits in electronic accounts, and
would surrender them when they make carbon-related purchases, such as electricity,
heating fuel and petroleum. PCAs could also require individuals to use credits for
public transport. Tradable Energy Quotas would bring all other sectors of society
(example: Industry, Government) within the scope of a single scheme.

Individuals who exceed their allocation (i.e. those who want to use more emissions
credits than they have been given) would be able to purchase additional credits from
those who use less, so individuals that are under allocation would profit from their
small carbon footprint.

Proponents of personal carbon trading claim that it is an equitable way of

addressing climate change and peak oil, as it could guarantee that a national
economy lives within its agreed carbon budget and ensure fair access to fuel and
energy. They also believe it would increase ‘carbon literacy’ among the public, while
encouraging more localised economies.

Personal carbon trading has been criticised for its possible complexity and high
implementation costs. As yet, there is minimal reliable data on these issues. There is
also the fear that personal "rationing" and trading of allowances will be politically
unacceptable, especially if those allowances are used to buy from industries who are
already passing-on costs from their participation in carbon levy or trading schemes
such as the EU ETS.

In May 2008 DEFRA completed a pre-feasibility study into TEQs, with the headline

finding that “personal carbon trading has potential to engage individuals in taking
action to combat climate change, but is essentially ahead of its time and expected
costs for implementation are high”. Based on this DEFRA announced that “the
Government remains interested in the concept of personal carbon trading and,
although it will not be continuing its research programme at this stage, it will monitor
the wealth of research focusing on this area and may introduce personal carbon
trading if the value of carbon savings and cost implications change".

Later that same month the UK Parliament Environmental Audit Committee produced

their report on the subject, which concluded that ”personal carbon trading could be
essential in helping to reduce our national carbon footprint" and rebuked the
Government for delaying a full feasibility study, stating that "although we commend
the Government for its intention to maintain engagement in academic work on the
topic, we urge it to undertake a stronger role, leading and shaping debate and
coordinating research".
Units to measure carbon trading

The units which may be transferred under Article 17 emissions trading, each equal to
one metric tonne of emissions (in CO2-equivalent terms), maybe in the form of:

 An assigned amount unit (AAU) issued by an Annex I Party on the basis of its

assigned amount pursuant to Articles 3.7 and 3.8 of the Protocol.
 A removal unit (RMU) issued by an Annex I Party on the basis of land use,
land-use change and forestry (LULUCF) activities under Articles 3.3 and 3.4 of
the Kyoto Protocol.
 An emission reduction unit (ERU) generated by a joint implementation project
under Article 6 of the Kyoto Protocol.
 A certified emission reduction (CER) generated from a clean development
mechanism project activity under Article 12 of the Kyoto Protocol.
Transfers and acquisitions of these units are to be tracked and recorded through the
registry systems under the Kyoto Protocol.

pros

Some proponents find carbon trading to be a better method than other initiatives
(e.g. a carbon tax) in that carbon trading does not require as much government
involvement as some of the other proposed ideas do. While initially businesses
would not notice much change in their ability to release carbon emissions, they will
begin to make changes as the cap lowers. At the same time, this incremental
approach will give businesses the time needed to evaluate their current practices in
relation to adopting green methods. Advocates believe that businesses will take
measures to cut down on pollution to save the company money on future carbon
trading, but it takes time.

Some environmentalists and government officials also like the idea of free market
environmentalism. They feel it gives businesses more choices than carbon taxes and
other regulations. Furthermore, they suggest that this method is cheaper for
businesses than a carbon tax.

cons

Opponents say if you like the Internal Revenue Service, you will love carbon trading.
Since there are no rules and standards to date, naysayers argue that carbon trading
will be drafted by faceless bureaucrats who will bear no responsibility for the costs or
problems they create for businesses that have to follow arbitrary carbon trading
dictates.
In all fairness, it needs to be pointed out that advocates reluctantly admit that there is
no effective framework for administering carbon trading. Current efforts have major
flaws. In addition, preliminary carbon trading, not to mention carbon tax, proposals
seem chockablock full of favors for political lobbyist friends.

Meanwhile, certain businesses say they need to release pollutants to effectively run
existing businesses and that they cannot immediately replace their plants and retrain
workforces. They also question why their products will cost substantially more than
imports distributed from countries with few standards and restrictions, and hence
cheaper prices. In fact, many businesses argue that they are being penalized when it
comes to competing with countries that are less concerned about complying with
global and governmental carbon reduction rules and regulations.

Recent history shows regulators are reluctant to allow businesses to pass on these
regulatory required additional costs to consumers. Adding insult to injury, the Internal
Revenue Service has taken a position that basically accelerates when revenues are
taxable and delays when expenses are allowed as tax deductions, on these
additional costs.

What we have is a logjam where one set of politicians and bureaucrats will force
business to make expensive changes, while the other set conveniently makes it very
difficult to recovery those costs. Politicians like carbon trading tax because
combining indirect taxes with a lack of accountability shields them from responsibility
more than a more visible carbon tax.

Criticisms

It has been argued that trading is a form of colonialism, where rich countries
maintain their levels of consumption while getting credit for carbon savings in
inefficient industrial projects. Nations that have fewer financial resources may find
that they cannot afford the permits necessary for developing an industrial
infrastructure, thus inhibiting these countries economic development. Other criticisms
include the questionable level of sustainable development promoted by the Kyoto
Protocol's Clean Development Mechanism.

Another criticism is of non-existent emission reductions produced in the Kyoto

Protocol due to the surplus ("hot air") of allowances that some countries have. For
example, Russia has a surplus of allowances due to its economic collapse following
the end of the Soviet Union. Other countries could buy these allowances from
Russia, but this would not reduce emissions. Rather, it would simply be a
redistribution of emissions allowances. In practice, Kyoto Parties have as yet chosen
not to buy these surplus allowances.
Critics of carbon trading, such as Carbon Trade Watch, argue that it places
disproportionate emphasis on individual lifestyles and carbon footprints, distracting
attention from the wider, systemic changes and collective political action that needs
to be taken to tackle climate change. Groups such as the Corner House have argued
that the market will choose the easiest means to save a given quantity of carbon in
the short term, which may be different to the pathway required to obtain sustained
and sizable reductions over a longer period, and so a market-led approach is likely to
reinforce technological lock-in. For instance, small cuts may often be achieved
cheaply through investment in making a technology more efficient, where larger cuts
would require scrapping the technology and using a different one. They also argue
that emissions trading is undermining alternative approaches to pollution control with
which it does not combine well, and so the overall effect it is having is to actually stall
significant change to less polluting technologies.

The Financial Times published an article about cap-and-trade systems which argued

that "Carbon markets create a muddle" and "...leave much room for unverifiable
manipulation". Lohmann (2009) pointed out that emissions trading schemes create
new uncertainties and risks, which can be commoditised by means of derivatives,
thereby creating a new speculative market.

Recent proposals for alternative schemes to avoid the problems of cap-and-trade

schemes include Cap and Share, which was being actively considered by the Irish
Parliament in May 2008, and the Sky Trust schemes. These schemes state that cap-
and-trade or cap-and-tax schemes inherently impact the poor and those in rural
areas, who have less choice in energy consumption options.

OBSERVATIONS AND CONCLUSION

My observations on the organisation “Carbon Bank” is that it is a slow organisation

but it is definitely making a huge impact on our environment and is preventing it from
complete downfall. It’s usage of various techniques like reduction of carbon
footprints, introduction of carbon trading and giving out carbon credits is highly
effective in reducing greenhouse effect and global warming.

Despite its cons, it is one of the organisations at a global level that is actually making
a huge impact on saving our environment and indirectly saving our future
generations from perishing.
 IMPORTANCE OF THE PROJECT

This project is very important since it throws light on the lesser known aspects of
environment degradation. It gives us an insight to the condition of earth which is
constantly being engulfed into the now harmless looking carbon bubble.

It is not only informing the people about it but it is also a help to me since it has
opened my eyes to the deteriorating condition of our environment.

SOURCE/MATERIALS/REFERENCE

The sources are:

 Wikipedia
 Article by “Environmental Change Institute” - Oxford University
 “Personal Pollution Allowance Proposal”
 Environmental Audit Committee – Personal Carbon Trading: Fifth
Report of Session 2007-2008