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Is carbon the new hard currency?
Published on Mon, Sep 04, 2006 at 22:15 in 
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There is whole new financial sector- the carbon market- waiting to take India by storm. According to Karan Capoor, senior financial specialist, World Bank and the chief author of State of the Carbon Market 2006 report says “…carbon is now a financial commodity.
Carbon is now priced and business managers take the carbon price into consideration along with other factors in making business decisions…” And India corners almost 10 per cent share of this market. So there is little doubt emissions trading can be profitable.
According to a World Bank report, the global carbon market could be worth $25-30 billion in 2006, based on volumes in the first four months of the year, according to the World Bank. Some $7.5 billion worth of carbon contracts changed hands up to the end of April, compared with almost $11 billion in the whole of 2005, the Bank's sixth annual market survey found.
What are carbon credits: Carbon credits are a measure devised by the Kyoto Protocol to reduce world Greenhouse Gas emissions, and hence fight climate change. Both through the unofficial carbon market and by means of a provision of the Kyoto protocol called the "clean development mechanism," people, companies and states can claim to reduce their emissions by investing in carbon-friendly projects in poorer countries.
Among other schemes, you can earn carbon credits by paying people to plant trees. As the trees grow, they are supposed to absorb the carbon we release when we burn fossil fuels.
Since India’s CHG emission is below the level stipulated in Kyoto Protocol, it can sell carbon credits to developed nations. Japanese private companies continue to be major buyers of project-based carbon credits, taking a 46 per cent market share in 2005 compared with 36 per cent in 2004.
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