Climate change entrepreneur Kishore Butani believes the future of carbon trading in Asia is bright, but steps need to be taken to ensure there’s no red-tapeism or free lunches
Kishore Butani founded CARBONyatra to further the prospects of fair carbon trading in and with India, as well as to bring about change and reduce the collective carbon footprint through awareness and eco-friendly projects. In 2007, he developed India’s first Carbon Footprint Calendar and first Carbon News Portal. In 2010, he registered India’s first ISO 14064 Voluntary Emission Reduction Project and is also the country’s first carbon neutral wedding offset provider. He specialises in carbon project aggregation and sourcing, and offset documentation and trading in the Voluntary Carbon Space (VCS) and ISO 14064:2. He is also a member of the Markit Environmental Registry. Kishore talks to AGI about the possibilities, loopholes and future of carbon trading in Asia.
Where do prominent Asian markets like India and China currently stand in the global carbon trading market?
The current carbon market is at an all time low with prices at rock bottom. In fact, the biggest carbon market (CDM Kyoto) is now facing a slow down due to factors such as recession, low industrial growth etc in Europe. Many carbon players are shifting to the voluntary carbon market since there is no difference in compliance and voluntary carbon prices at the moment.
Why is it essential for Asian countries to launch their own carbon-trading markets?
All green and low carbon projects must be offered incentives and carbon finance if we are to fight the challenge from cheap coal and oil. If Europe is facing a slowdown, there is no reason for Asia not to launch their own regional carbon trading markets and generate carbon finance via domestic carbon exchanges. In any case, most of the countries have signed a pact to introduce some form of carbon trading by 2020, and industries need to begin trading voluntarily now instead of seven years down the line to gain traction. The price of carbon has to touch $30/t for anyone to look at carbon credits and trading.
What are the immediate steps that need to be taken to ensure domestic carbon-trading markets in Asian countries are successful?
The cap must be stringent, the rules very flexible and there should be no free allowances granted to polluters ever. All carbon credits or allowances must be available either on an exchange or via auction, no free lunches to polluters.
What are the loopholes in the current carbon trading system in India and what can be done to rectify this?
There is no OTC (over-the-counter) or regulated exchange for carbon credits in India at the moment. We are trading RECs (Renewable Energy Certificates/Credits) but with state electricity departments bankrupt, there are no buyers.
A voluntary pre-compliance carbon market must be launched now and must target high carbon footprint industries. On the other hand, biogas rural digestor programs must be included in the sell of any carbon market. The design must be such that cross linking at a later stage with China, Brazil and other countries must be seamless in terms of allowances and credits.
What does the future of carbon trading in Asia look like?
Voluntary regional programs are already being tested in China and other South East Asian countries. The rules are available and clearly spelt out. There are international carbon registries already tracking each carbon credit being sold worldwide. India has enough carbon auditors and energy auditors at its disposal. What is required is a regional carbon voluntary exchange with simple rules, low entry cost, zero red-tape, full transparency and the will of the government to put a price on carbon. Once we target sectors such as BPOs, malls, banks etc and other such operations who waste energy and are a drain on our resources, we can then seriously tackle climate change.
