CARBON MANAGEMENT – VIEW IN ASIA

Posted on October 20, 2010 by


Background

Asia, comprising of pockets of highly developed countries such as South Korea, Japan, developing giants such as China and India and a number of developing countries such as Bangladesh and Sri Lanka offers a very different view on carbon accounting, footprinting and mitigation efforts as compared to the developed EU and USA.

Huge investments are happening in Asia in field green technology, evidenced by rankings in wind energy (China is 4th and India is rank 5th). Similar push is also underway in Solar energy installations, India has rolled out ambitious Jawaharlal Nehru National Solar Mission (JNNSM) with a target of 20GW installed power from solar by 2022. These could very well be the steps brightening prospects of domestic emissions trading and regional carbon trading thereafter.

Kyoto or No Kyoto

Given the uncertainty around the Kyoto Protocol and its successor mechanism if any, Asian countries such as China, Australia, New Zealand, Japan and Korea may not wait for a follow up agreement and could proceed ahead with their own national Cap –and Trade schemes to curb greenhouse gases.

Carbon is becoming a key driver in the competitiveness of businesses that want to survive in the new carbon economy. European companies are already well aware of this given the legislations and EU-ETS being in place. This has made sure that several companies have already taken action. Given the way the Copenhagen negotiations shaped up, in terms of attempts to create conditional targets, Japan and Korea seems to be taking a wait-and–see approach. When the Japanese Cap and Trade scheme will actually start is unclear as of yet. It could be in the fiscal year 2012 or even later, one thing is for sure the Japanese companies need to start preparing themselves. Evidence shows that who starts too late will lose very good opportunities. South Korea is likely to launch a national Carbon Cap and Trade system most likely in 2012. The big polluting companies that produced more than 125,000 tons of CO2 in the past 3 years will already have to start taking action from April 2011.

Carbon management in practice

Carbon management is a framework for evaluating emission opportunity and risk. It is a tool to assess risk, mitigate liability, and develop new revenue streams. Accounting for emissions, identifying reduction opportunities, and then tracking actual emission reductions will become common business practice for many companies in the years to come.

Irrespective of how the legislations and global negotiations proceed, the top companies in these geographies have already started integrating carbon management into their every day operations, allowing them to identify and control liability and in some cases realize income from emission reductions.

The reason for delay by many companies in acting on carbon management systems is the gross underestimation of the timeline of Boardroom idea to actual implementation.  Companies that take early action can turn emission reductions into a positive by increasing income through carbon credits. Businesses that wait too long will suffer, as their emission reductions will show up only on the cost side of the ledger.

The opportunities and risks exist across the sizes and geographies of companies, all medium to large Asian corporations should start setting up a carbon management system right now.

Sources

  1. http://www.maycroft.com/cms/pages/posts/carbon-management-for-japanese-and-korean-companies-be-prepared39.php?goback=.nmp_*1_*1_*1_*1_*1.amf_115719_4262858.gde_115719_member_32476294
  2. Agneya’s analysis

About us

Agneya Carbon Ventures came into existence with the purpose of “To help our clients in understanding, establishing sound Environment Management Systems, and pursuing sustainable business solutions through our various services to abate direct and indirect impact on ecological balance.”

We have worked with companies across sectors enabling them to create carbon accounting, monitoring and reporting systems. We have expertise in the areas of carbon accounting and management, energy management systems, voluntary/compliance carbon markets, environment management and sustainability and carbon branding.

To know more about us, please visit http://www.agenya.in

To schedule a meeting or a discussion with us, do reach us on

Kedar – +91-9665407848 – kedar@agneya.in

Indrajeet – +91-9028788430 – indrajeet@agneya.in

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Posted in: Carbon Markets