Environmental Engineering Reference
In-Depth Information
for China—pushing hydropower as a cleaner and
nationally accepted means of electricity. While
hydropower is increasingly prevalent in China,
it is not immune to power shortages either, as the
drought in southwestern China demonstrated in
late winter. The revenues from carbon investments
come in again as a risk allayer—not only are sig-
nificant returns possible from biogas, biomass, and
methane recovery projects, but these diversify the
sources of electricity the Chinese can use to meet
their burgeoning energy needs and minimise the
possibility of blackouts or grid overloads.
As the second largest contributor to CDM in
projects quantity, India is ridden with its own
unique problems, not least of which is energy
demand. Carbon has been a very successful tool
in managing this risk. One development in the
project structures has been the rise to eminence
of Programmes of Activity (PoA) described as:
sets with CFLs, and distributing CFLs as well to
employees to replace them in their own homes,
yielding an unprecedented quantity of CERs for
a PoA. After registering the project, the Indian
government is in the process of auctioning the
rights to develop the individual projects broken
down by methodology and jurisdiction, to Western
entities interested in the CERs. India brilliantly
structured this initiative and in doing so mitigated
a number of risks through carbon—energy short-
ages, clean power production, finding appropriate
counterparties in future development initiatives,
logistics planning, operations, awareness rais-
ing for in this case climate change, and project
financing. Western investors including global
industry leaders such as AES, EDF, Osram and
Philips have applied to help implement thus far
44 separate projects under the PoA (Kouchakji,
2010). Crucially, with the risk management tools
and skillsets realised through this endeavour, the
Indian counterparties can translate this across a
spectrum of future business dealings and develop-
ment programmes on both a national macro and
enterprise driven micro level.
In light of China's energy needs and risks, it
comes as no surprise then that the Hong Kong
Stock Exchange integrated carbon into its strategy
in 2008, planning the launch of tradable carbon
assets as part of its product offering. Or indeed, that
the municipality of Beijing and other metropolitan
centres initiated domestic carbon exchanges. As
part of its domestic risk management to mitigate
unreasonable economic costs likely from rising
emissions (particularly in China, with among the
world's highest rates of smog density) and resulting
rising healthcare bill, carbon is again utilised as a
financial instrument. The world's stock exchanges
are in a race to meet the demands of carbon intense
economies and speculators anticipating a gradually
clarified and ever-tightening emission reducing
treaty—albeit individual mandates at the national
or interregional level. Stock exchanges provide
trusted, transparent means of managing exposure
A voluntary action,
Implementing a policy, measure or stated
goal,
Coordinated by a public or private entity,
Resulting in emission reductions or remov-
als that are additional (CDM Rulebook,
2010).
In layman's terms PoAs allow a number of
smaller initiatives to be bundled into one overarch-
ing project across jurisdictions and methodologies
that achieve a specific goal. In India, PoAs have
been instrumental in generating sustainable, ef-
ficient electricity through solar cookers, bespoke
cookstoves, and most visibly compact fluorescent
lightbulb distribution. The Indian National Rail
Authority, which is one of the world's single larg-
est employers, also owns a considerable number
of energy consuming assets including the railway
stations, trains, and employee accommodations
across India. The Indian government was success-
ful in registering an emissions reducing project
to replace old inefficient incandescent lightbulbs
across the Rail Authority's energy consuming as-
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