Global Warming - An opportunity for Developing Countries

I could not post for last three days, as I was out of stattion for attending a social function. However, the consensus among relatives who attended the function was that this year the winter is not so chilling as compared to the same period of the last year. I can also feel this because I am not using any blanket or quilt during these days. I heard from our elders saying that they never used fan even in peak summer season in Hyderabad.

The night temperatures in Hyderabad and other Telangana District Headquarters like Nizamabad and Adilabad, which are known for their lowest night temperatures, are hovering around 13-15 Centigrade, when comapred to the night temperatures of around 9-11 centigrade during the same period in the previous years.

What it means? Is it that effect of Global Warming is visible much faster than expected?

In a nutshell, the global warming is the effect of increase in atmospheric temperature due to the increase in the greenhouse gas emissions. Greenhouse gases are those gases which aborb heat from the sunlight. Carbon-di-oxide, a greenhouse gas, is the main culprit in contributing to global warming.

As a country develops, its energy needs increases, which in turn increase pollution, contributing for the ever increasing greenhouse gases in the atmosphere. The experience of warm and hot weather inside a car parked in sunlight is a classic example of how the greenhouse effect can be felt as the glass allows sunlight inside but does not allow the heat to pass through, making inside weather hot and warm.

On the other hand, the Global Warming is a blessing in disguise for developing countries. As per the Kyoto Protocol, developed countries have to reduce the level of Carbon di Oxide emmissions, below their current levels. This protocol comes into effect from 01-04-2008. These targets are not applicable for developing countries as their present stage of development involves lot of industrialisation and requires some more time for their development before which they can abide by with any reductions in the emissions of greenhouse gases. Moreover, the emission levels in the developed countries are at much higher level than their developing counterparts. Global companies that have exceeded their emission levels can either cut them down by making the needed investments or buy carbon credits from developing countries. Trading takes place on two stock exchanges, the Chicago Climate Exchange and the European Climate Exchange. Trading can also take place in the open market. European countries and Japan are the major buyers of carbon credit because the US has still not accepted the Kyoto Protocol on global warming.


Carbon credits are measured in units of certified emission reductions (CERs). Each CER is equivalent of One Ton of Carbon dioxide reduction. That means, if a company invests in greener technologies like Bio-diesel, Solid Waste Management, Waste Land Development, Non-renewable Energy Resources like Solar Energy, Wind Power generation, Bio-mass based power plants, Co-generation in any manufacturing concerns, which reduce the effective C02 emissions , it can be awarded carbon credits based on its effective reduction of CO2 in an year by using these greener technologies. For example, a bio-diesel plant effectively reduces 1000 Tons of CO2 every year by way of fuel, it gets 1000 Carbon Credits (CC). A company in France, let's say, wants to reduce its emmission levels, which may not be possible in the short run, it may buy the carbon credits from the above company. These carbon Credits are freely tradeable in the international market. Presently, the rate per CC is around 50 Euros. Imagine, how much money can be earned by the above company by selling the 1000 Carbon Credits.

The process involved in getting CCs is lenghy and cumbersome. It may take anywhere between six months to one year in time and around Rs. 50 lakhs as fee for a consultant as the documentation requires experts in the filed and also Central Goverment and United Nations are involved in granting these CCs.

The United Nations Framework Convention on Climate Change's Clean Development Mechanism (CDM) has been put in place to facilitate the trade of carbon credits between the developing and developed nations.While many companies are also looking at generating additional revenues through the sale of carbon credits, consultants such as PricewaterhouseCoopers (PwC) and Ernst & Young are already advising more than 100 CDM projects in India.


I hope, in the years to come, this sector may absorb good number of consultants.