Environment friendliness "carbon credits" offers chance to earn billions

[Naveed Yaseen]

Pak industries yet to seize on the opportunity
By Mansoor Ahmad
LAHORE: Pakistan’s industrial sector has not benefitted from the carbon initiative under which developed nations having high pollution levels trade cleaner environment-friendly industrial technologies by providing cash credit.

Developed nations under the Kyoto Protocol are bound to bring their emission of gases, which has caused global warming, to 1992 level by 2012. They can do so either by replacing heavy gas-emitting technology in their industries with cleaner technology or by buying carbon credit (carbon dioxide being the main pollutant) from industries in developing economies which use cleaner technologies against cash payment.

The rate of one carbon unit is 15 euros. The entire process from registration of an industrial unit to disbursement of payment is overseen by a special United Nation’s cell established in all developing countries. A three-megawatt electricity generation plant installed by thousands of textile and other industrial units in Pakistan could net Rs5 million per year, according to Asim Mehmood, a carbon initiative consultant.

The News has found that barring Pak-Arab Fertilizer no other industry in the country has benefited from this facility. About a dozen have applied and some are in final stages of registration. Most of the industries using cleaner technologies, however, are unaware of this facility while those which have some idea do not know how to apply.

The carbon initiative provides a chance to environment-friendly industries in developing countries to earn billions of dollars by registering and claiming carbon credit. Currently, India is the leading beneficiary of carbon credit which according to UN statistics accounts for 31 per cent of all carbon credit that is currently disbursed. It is followed by China which has a 24 per cent share. Even Bangladesh is much ahead of Pakistan as four of its industries are availing of this facility.

Consultants point out that delayed government response to start the registration process is one reason for Pakistan’s poor performance. They say first the provincial environment protection departments examine the application for registration with the UN cell and then the federal department for cleaner development approves the application for submission to the UN agency. This process, according to the consultants, takes several months.

Another consultant apprehends that the presence of a strong Indian lobby in the UN agency is a drawback as it put hurdles in the way of registration. He says the objections are baseless as several Indian industries have been registered having similar minor flaws. However, on objections Pakistani consultants now cite the example of registered Indian industries to strengthen their case. Asim says the reluctance of industries to hire consultants is another reason which has deprived the industrial sector of benefits of this facility. The Kyoto Protocol was adopted in Kyoto, Japan, on December 11, 1997 and came into force on February 16, 2005. Some 183 parties have ratified the protocol to date. Detailed rules for implementation of the protocol were adopted in Marrakesh in 2001 and are called ‘Marrakesh Accords’.

Under the treaty, countries must meet their targets primarily through national measures. However, the Kyoto Protocol offers them additional means of meeting their targets by way of three market-based mechanisms which include emissions trading known as ‘carbon market’, clean development mechanism in their country and joint implementation under which a developed country provides credit for a clean project in a developing country and recover the debt through carbon credit.

http://www.thenews.com.pk/daily_detail.asp?id=167184