Hop on to Metro Rail, it’ll help trade in carbon credits

Hop on to Metro Rail, it’ll help trade in carbon credits
R Jayaprakash | TNN

Bangalore: Carbon trading is the latest buzzword and the Bangalore Metro Rail Corporation Limited (BMRC) has decided to cash in.
It’s expected to generate an annual revenue of Rs 16 crore, which will be ploughed back into the Metro project. The authority will call for request for proposal (RFP) for developing a clean development mechanism (CDM) to prevent carbon from being emitted to the atmosphere. Thus, BMRC will be the first Metro Rail in the world to join the elite club of CDM companies. The authority will register with the United Nations Framework Convention on Climate Change (UNFCCC) and trade in carbon credits. It will invite companies with experience in developing project design, documentation and methodology for transport and energy efficiency. The consultants will assist BMRC in formulating suitable norms, standards and identify buyers.
“We expect to save 1 lakh tonnes of carbon every year and retail in the carbon market through bonds. This is the first time a transport company will adopt CDM technology. The Japan Carbon Fund, based in Tokyo, is interested in being part of the carbon deal, but we are going slow as we will evaluate the pros and cons at a later stage,’’ said BMRC environmental officer C Jayaram.
BMRC is expected to complete phase-I of the Metro by 2011 and make it operational by 2012. A length of 33 km is planned in phase-I and 1 million passengers are expected to benefit from it. For BMRC to trade carbon, it has to have in place design and documentation validated with UNFCCC. The consultant will also develop a software for monitoring, data collection and operations.
What is carbon trading?
Emission trading or carbon trading is an administrative approach used to control pollution by providing economic incentives for achieving reductions in emission of pollutants. In such a plan, a central authority (usually a government agency) sets a limit or cap on the amount of carbon that can be discharged into the air. Companies that pollute beyond the cap must buy credits from those who pollute less than the ceiling or face heavy penalties. This transfer is referred to as a trade. Thus, the buyer is fined for polluting, while the seller is rewarded for reducing emission. Companies that can easily reduce emissions will do so. Those companies that find this harder will buy credits.
Carbon market
Currently, several trading systems are in place, with the largest being that of the European Union. The carbon market makes up the bulk of these and is growing in popularity. The Kyoto Protocol is a 1997 international treaty that took effect in 2005 and currently binds ratifying nations to a similar system, with the UNFCCC setting caps for each nation. Under the treaty, nations that emit less than their quota of greenhouse gases will be able to sell emissions credits.
Carbon emission trading has been steadily increasing in recent years. According to the World Bank’s Carbon Finance Unit, carbon is traded at 26 euros per tonne.
toiblr.reporter@timesgroup.com