Carbon trading seems to be a very promising mechanism for effecting climate change

As the executive secretary of United Nation Framework Convention on

Climate Change (UNFCCC), Yvo De Boer is regarded as part of the triumvirate that

is leading the debate and discussion on climate change, the others being RK

Pachauri from IPCC and former US Vice President Al Gore. Yet while Pachauri and

Gore emphasize and cry about the inconvenient truth, de Boer has been leading

a mounted international effort to ensure that consensus is reached before the

big climate change conference to be held in Copenhagen in 2012. A major part of

this thrust has been in the developing world, especially so in India and China.

De Boer has also been an ardent supporter of Clean Development Mechanisms or CDM.

By means of CDM, countries like India are encouraged to invest in clean

technology through carbon trading, Already, India is a major supplier of

Certified Emissions Reductions globally and de Boer emphasizes that this could

lead to a major opportunity for companies in India to not only make profits but

help the world go green. Speaking exclusively to Dataquest from his headquarters

in Germany, de Boer touches upon different macro issues on green and also talks

about how the IT industry could also take a lead in saving the world from

eminent disaster. Excerpts

Lets start with the role played by developing countries, namely India,

China and Brazil in combating climate change. How can they match the needs for

growth and poverty eradication with those of environmental concerns?



I guess this is a challenge that all of the developing world faces, on one

hand there are clear overriding goals, economic growth and poverty eradication.

But at the same time they are experiencing the impacts of climate change, they

are confronted with issues of energy security, there are concerns over energy

prices, in many countries specially the ones that use a large deal of coal,

there are concerns over air quality as well. So I suppose the overall challenge

is: Can you achieve economic growth and eradicate poverty without making the

same mistakes that many countries in the West have made. In other words, can a

different development path be found?

In one of your interviews you had stated that my ambition would be for

India to become the richest country in the world with the lowest per-capita

emissions. Is that possible?



I dont know if that is possible or not. Take for example the European

economy, there you see that the CO2 emissions per unit of GDP have decreased by

70% over the last 100 years, and 50% of that decrease has happened after 1990.

So if you look at the history of development in Western countries since the

industrial revolution, then you will see that at the beginning of the

development path the carbon emissions increased enormously, but then you also

see a shift in the trend of economic development, with more and more focus being

on high-tech parts service parts and knowledge parts of the economy, which

generally tend to have a lower carbon footprint. Much of this you could argue

has happened because European countries have outsourced their energy intensive

industry to lower wage countries like China and India. And part of the challenge

I think is to ensure that developing countries like China and India are not

burdened with being the engine room of the world economy, but also develop in a

cleaner way as well. I certainly see this happening in China, perhaps that will

come out in India study as well, when it is available in June.

You have ardently supported Carbon Trading through the CDM. How would you

rate its success thus far? How has it helped countries like India and China?



Carbon trading really has taken off in a huge way, as the market is

estimated to be around $60 bn in value, and the clean development mechanism

within that had a value last year of around $5 bn. So if you look at the

pipeline of projects, then there are more than 316 Indian projects in the

pipeline at the moment, which gives India the largest overall share of around

33% of all registered CDM projects. So thats a mechanism thats really taken

off, and that has the dual benefiton one hand it allows countries to achieve

emission reductions quite cheaply while for the developing countries the benefit

is that they receive injection of technology which allows them to change the

direction of their economic growth. It seems to be a very promising mechanism

for effecting climate change.

You have also spoken actively about private investments. But considering

the fluctuations in the carbon market and little uptake by consumers of low

carbon footprint (high cost) products, what is going to drive these investments?



That is changing. If I look at the way the petrol prices are going in Europe

I sense that people are very conscious of what it costs them to fill up their

tank, and that is already influencing the choice that they make when buying a

car and how much they drive once they have got one. I also have a feeling that

electricity prices are influencing the sort of appliances that people are

purchasing. The main challenge is that, the world economy is going to grow, we

know that in order to provide the energy that is necessary to propel this

economic growth to take place about $20 tn will be invested in the energy sector

over the next 25 years, and part of the climate change challenge is to ensure

that the $20 tn is invested in clean technology rather than polluting ones. So

it is a matter of right policy conditions and financial incentives that will

push the $20 tn in a clean direction rather than the polluting ones.

What is your message to non-polluting industries like the IT services

sector? How can they benefit or survive in the new world?



I think that those are exactly the companies that potentially are the

biggest winners as a result of the action on climate change. Because these are

companies that by and large have a low carbon footprint, if you compare them to

energy intensive companies. So I think that the growth in the economy that is

trying to constrain its carbon emissions, positions the IT sector in a much

better way than many energy intensive industries. And if you have seen a recent

UNEP report issued last week, that the market for new and clean technology is

growing enormously, and in that sense I think the IT industry is very well

positioned to profit from many of the opportunities that are emerging.

Shashwat DC



shashwatc@cybermedia.co.in