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1Climate. Value. Delivered. www.general-carbon.com
Satish Kashyap
March 9, 2010
Climate Policy - Global & Domestic
2Climate. Value. Delivered. www.general-carbon.com
Agenda
• Global climate policy
– Copenhagen
– Post 2012 scenarios
• Domestic policy
– Renewable energy certificates
3Climate. Value. Delivered. www.general-carbon.com
Climate value
Source: General Carbon Analysis
In U
SD
20% 34%60% 70% 92%
154%
307%
4Climate. Value. Delivered. www.general-carbon.com
Copenhagen - Expectations
• Long-term commitment on climate change
• Improve CDM
• REDD
• Carbon Capture and Storage (CCS) in CDM
• Hot Air
5Climate. Value. Delivered. www.general-carbon.com
Copenhagen Accord
• Common but differentiated responsibilities
• Limit on temperature rise
• Comprehensive adaptation program
• Peaking year
• Quantification
• REDD
• Funding
Source: UNFCCC
6Climate. Value. Delivered. www.general-carbon.com
Other points discussed at Copenhagen
• CDM process reforms
– Improved transparency
– Appeal process
– Capacity building (DOE, methodology etc.)
• REDD+
– Funding earmarked
• Hot air
– No deal on hot air
7Climate. Value. Delivered. www.general-carbon.com
Summary
Pre 2012 Post 2012
Demand for offsets
Supply of offsets
Cost of generation
Carbon finance ability
CDM process
Carbon market participants
Positive Negative Neutral
8Climate. Value. Delivered. www.general-carbon.com
Post 2012 – EU ETS
• EU commitment as part of Phase III
– 20% path to 2020
– 30% path to 2020 where global agreement is reached
• CER demand upper limit of 270 Mt per year (industrial demand) till 2012 will increase to
– ~40 Mt per year under 20% path
– ~120 Mt per year under 30% path
• Comitology process
– Further restrictions type of CERs and geography
– Projects from LDCs post 2012
9Climate. Value. Delivered. www.general-carbon.com
Post 2012 - US
• US may take over from Europe as the hub of global emissions trading
• Import of international offsets under the two schemes
– Waxman Markey bill ~ 800 Mt/yr of international offsets
– Kerry Boxer bill ~ 500 Mt/yr of international offsets
• The bills introduces a discount rate on international offsets of 1.25
– 1.25 CERs or other international offsets would be worth 1 US domestic unit
– For CERs this is closer to 1.13 CERs per tonne due to US short vs. metric tonne conversion
• Based on WCI, RGGI and other local initiatives
– Lower US pricing expectations
– Focus likely on high-volume, low-cost projects, such as industrial gas projects or forestry
10Climate. Value. Delivered. www.general-carbon.com
Commitments given on Jan 31, 2010
• China – Energy intensity target of 40% - 45% of 2005 level
– Increase RE share to 15%
• Indonesia – 26% reduction by 2020
– Peat land management, REDD is a large share
• India – Energy intensity target of 20% - 25%
• Brazil– 36 – 39% reduction over 1990 level
– Amazon & Cerrado deforestation (60% or 600 Mt)
• Russia– 15- 20% of 1990 level
11Climate. Value. Delivered. www.general-carbon.com
National Action Plan for Climate Change
• Added impetus for creating instruments to facilitate RE
growth
• RE purchase must be 5% of grid and increase by 1% for
10 years
• Reservation for Solar (0.25%)
• Authority to issue tradable certificates
• RECs experience in US & Japan
• Framework expected to start operation in April 2010
12Climate. Value. Delivered. www.general-carbon.com
Framework
• Buyers
– DISCOMs
– Open Access Users
– Captive generators
• REC registry & exchange platform
• CERC and SERC roles
• Penalty
13Climate. Value. Delivered. www.general-carbon.com
Climate. Value. Delivered.
Satish Kashyap
March 9, 2010
