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Carbon Market Investment Fund Guide |
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Carbon dioxide, now a precious commodity, primarily because it a green house gas, and also in multiple applications like advanced recovery techniques for aging oil wells.
Carbon dioxide is much more than a gas. It is a heat-trapping or greenhouse gas (GHG), today. By The Kyoto Protocol signed in 1997 emission limitations were assigned to all signatory nations. About 169 countries, excluding the U.S. and Australia, are in the list.
A large number of carbon reduction and trading schemes have been established under Kyoto agreement.
Kyoto Protocol
Kyoto Protocol makes use of two main trading devices. The Clean Development Mechanism (CDM), which allows Kyoto signatory nations to offset their carbon emissions by investing in clean technologies in developing countries or by purchasing the resultant Certificates of Emission Reduction (CERs) from such projects. The second device is, Joint Implementation (JI), which allows industrialized countries to investing in clean technologies in other industrialized countries. The European Council in 2003 and is called the European Emission Trading Scheme (EU ETS) adopted the other government-backed trading program.
Clean Development Mechanism Program
The Clean Development Mechanism (CDM), started with the developing countries. It is curios to know that investment in only 3% of the registered CDM carbon reduction projects accounted for 55% of total carbon reductions. There are more than 222 projects registered under the CDM, aimed at preventing 65 million metric tons of carbon from entering the atmosphere every year.
Main Markets for Carbon Reduction Projects
Carbon emission reduction has more to do with the reduced use of advanced technologies. This not just makes way for clean air, but is also an investment for the carbon market. The main markets for carbon reduction projects are:
- Energy Efficiency
- Carbon Capture
- Methane Capture/Waste-to-Energy
- Power Plant Revamping
- Demand-side management
- Fuel Switching
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