Two Japanese companies recently launched carbon offset services under which individuals pay for projects designed to reduce greenhouse gas emissions to compensate for their own emissions.
gConscious, Inc. in Shibuya Ward, Tokyo, and Carbon Offset Japan in Minato Ward, Tokyo, started offering the service in December.
The two companies were established last year to help individuals reduce carbon dioxide emissions.
Under the scheme, individuals can contribute to achieving Japan's reduction target under the Kyoto Protocol, whose commitment period started this year.
Purchasing Emissions Quotas
The two companies purchase the emissions quotas from companies that have undertaken projects to cut CO2 emissions in developing countries with funds collected from their customers.
To offset one ton of CO2 emissions, gConscious charges its customers 5,000 yen, while Carbon Offset Japan bills them 4,200 yen.
Both companies donate the emissions quotas equivalent to the payment they have received from their customers to the Japanese government, which will include the amount as part of Japan's CO2 cuts.
The companies then inform their customers about the overseas project that made up for their CO2 emissions.
Brazil Hydroelectric Project
Carbon Offset Japan plans to use 10,000-ton emissions quotas it obtained for the construction project of a small hydroelectric power plant in Brazil for the time being, meaning that those who used the firm's service contributed to reducing CO2 emissions in Brazil and helping the Japanese government meet its Kyoto Protocol target.
Under the Kyoto Protocol, Japan is obliged to cut greenhouse gas emissions by 6 percent from 1990 levels between 2008 and 2012. In 1990, Japan emitted about 1.26 billion tons of greenhouse gases.
Because it is deemed impossible to achieve this goal solely with domestic efforts, the government plans to purchase emissions quotas totaling about 100 million tons in five years with taxpayers' money.
Lighting Projects in India
In India, Climate Change Capital (CCC), which manages the world's largest private sector carbon fund, is keen on funding the Clean Development Mechanism-based energy efficiency lighting projects being implemented across states such as Andhra Pradesh and Haryana.
The funding by the UK-based CCC is expected to be in lieu of receiving and encashing carbon credits generated from these ambitious projects, which seek to increase penetration of compact fluorescent lamps (CFLs) among households as an energy conservation measure.
The scheme aims at enabling private sector CFL manufacturers to collaborate with distribution utilities and sell the lamps at around Rs 10-15 per piece to households, while recovering the balance costs of CFL manufacture from CDM revenues.
CFLs are currently being sold in the market for around Rs 100 per lamp.
Largest Carbon Fund
While States would benefit on account of lowering of peak demand, as CFLs would reduce consumption, CFL manufacturers stand to gain from the intervention of PE players such as CCC in the scheme since the uncertainties involved in deferred CDM revenues and value of credits would be borne to a certain extent by the funding institutions.
CCC recently created the world's largest private sector carbon fund, raising $830 million in three months last year, and expecting the total to top $1 billion. Investors include Dutch pension funds ABP and PGGM, two of the world's top five pension funds, the UK-based international energy group Centrica, and a global emerging markets banking group.
The money raised is to be specifically invested in projects in developing countries that would lead to reductions in the amount of greenhouse gases (GHG), specifically carbon, being emitted into the atmosphere. The fund is specifically targeted at generating returns by acquiring a diversified portfolio of different types of carbon assets and derivatives.
Copyright Andre Pachter. Published with permission. Andre
Pachter's blog China
Confidential may be read at: http://chinaconfidential.blogspot.com/
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