Indian Group Eyes Carbon Trade with U.S.
Associated Press
August 22, 2006

Delhi: A nonprofit group in India has partnered with the Chicago Climate Exchange to help South Asian countries reduce greenhouse gases while selling so-called "carbon credits" to polluting companies in the United States.

The Energy and Resources Institute, or TERI, said Tuesday it has entered into an agreement with the Chicago Climate Exchange to facilitate greenhouse gas reduction projects in India, Sri Lanka, Pakistan, Nepal, Bhutan and the Maldives.

The projects together will offset 1.5 million tons of carbon dioxide emissions over 18 months.

Emission reduction initiatives may include switching to solar energy supplies, tapping alternative fuel sources such as bio-fuel, and planting trees that soak up carbon dioxide, said TERI official Vivek Kumar. The Chicago Climate Exchange, or CCX, offers a marketplace for companies in the United States that want to voluntarily cap their carbon emissions.

The system is similar to the Kyoto Protocol that allows countries to buy and sell the right to pollute. Richer countries unable to meet stringent emission reduction targets can buy carbon credits from developing countries that aren't bound by the same emission limits.

Kumar said TERI will work with aid groups, agricultural organizations and companies with operations in rural areas to identify projects that can be recommended for trading on the CCX.

Once the projects are registered on the CCX, member companies can buy what are called "verified emission rights." Each VER represents one ton of carbon dioxide.

Europe has already enforced a mandatory carbon emissions trading program following the Kyoto deal, and several Indian companies have sold carbon credits worth millions of dollars to Western firms under the European trading program.

But in the United States, which has not signed the Kyoto agreement, the CCX was set up for voluntary action by American companies, including chemical maker DuPont Co., computer manufacturer IBM Corp. and electronics maker Motorola Inc.

While the federal U.S. government is unlikely to make limits on carbon emissions mandatory, U.S. executives anticipate a cap-and-trade program at the state level within the next decade.

The move by the U.S. companies is part of a long-term strategy to get a foothold in emissions-trading schemes, so that if U.S. regulations become mandatory in the future, they will be able to lower emissions levels.

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