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

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