PRESENTATION ON CORPORATE SOCIAL RESPONSIBILITY AND CLIMATE CHANGE WITH SPECIAL REFERANCE TO CARBON CREDITS

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1 PRESENTATION ON CORPORATE SOCIAL RESPONSIBILITY AND CLIMATE CHANGE WITH SPECIAL REFERANCE TO CARBON CREDITS in IIFT on 22 nd April 2007 J K Dadoo Secretary (Environment)-cum-Chairman (DPCC) Govt. of NCT of Delhi 1

2 DEFINITION Corporate Social responsibility is best defined by the World Business Council as The continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce and their families as well as of the local community and society at large. 2

3 We cannot democratise the commerce if we leave out 5 billion people. Let us build inclusive captalism Prof. C K Prahalad The triple bottom line approach for CSR: People, Planet and Profit. Economic Concerns Social Concerns Environment Concerns 3

4 GLOBAL SCENARIO The World Business Council for Sustainable Development is an organization with 160 international companies, having a shared commitment to sustainable development via economic growth, ecological balance and social progress. They are working in a number of areas including building a low carbon future. By 1990, 90 % of fortune 500 firms embraced CSR and are actively promoting their CSR activities. 4

5 Deutsche Bank spends 3% of its net income on CSR efforts. In a European CSR survey of 2007, 50% of the companies were found engaged in stakeholder dialogue. 5

6 As per 2007 Report on European CSR Survey Conducted by RSM Erasmus University the issues of Importance are: 1. Climate Change 2. Transparency in business practice 3. Ecological diversity 4. Fair trade and fair procurement 5. Corruption prevention 6. Labour rights 7. Health and Safety 8. Education 9. Income equality and fair wages 10. Poverty 6

7 Other CSR related factors are: 1. Reputation management 2. Employee attraction 3. Competition (in general) 4. Investor relations 5. Corporate liabilities /Legal claims 6. Cost efficiency 7. Quality 7

8 INDIAN SCENARIO Companies which have adopted and followed the CSR in India are: Tata Group, BHEL, Wipro, Bajaj Auto Ltd., Larsen & Toubro, Sriram Investments, Otis Elevator Co. India, ACC, Asian Paints, Brook Bond, Colgate Palmolive, Escorts, SAIL, ITC, Ashoka Leyland etc. The contribution of these companies towards CSR encompasses various initiatives like: Starting social trusts Anti pollution measures Adopting villages Family planning clinics Training unemployed youth Community development activities 8

9 Conducted social audits on a voluntary basis Provide medical and Recreational facilities Develop sports programmes & competitions and undertake consumer education campaigns etc. 9

10 PRIORITY AREAS FOR CSR IN RESPECT OF ENVIRONMENT SECTOR IN DELHI Rain water Harvesting Structure in all Government schools. Need Volunteers. Cost Rs. 1 2 lakhs depending on ground water levels. Installation of solar water heating system in all Govt. schools. Need volunteers. Cost about Rs.1.5 lakhs and Government subsidy Rs /-. Paper recycling unit in all Govt. schools. Need volunteers. Cost about Rs.1.2 lakhs per unit. Maintenance of parks and gardens of Delhi. PPP scheme coming shortly for maintenance by Registered Societies/corporate bodies Volunteers required. 10

11 Installation of state of art plastic waste recycling plant by professional operators. Volunteers required. Electronic waste recycling plant by professional operators. Volunteers required Mercury waste management by way of establishing state of art recycling technology. Volunteers required. Usage of fly ash bricks in building construction. Large scale adoption to be promoted as it is mandatory as per law. Lowering Diesel consumption by using gas based DG sets. Switch to gas slogan needs to catch up. Widespread use of CNG Cars and battery operated vehicles. Switch required. Use of CNG in houses and industries. Switch required. 11

12 Reducing traffic congestion by taking metro rail. Adoption of Green building Concept. Large scale adoption required. Adoption of BEE label coding. Large Scale adoption necessary. Energy and water conservation. Life style change in urban rich required. Planting trees & nurturing them in all vacant places. Commitment required. Recycling of water. ETPs required alongwith STPs. Widespread use of CFL. Switch required. Segregation of household waste and organised compost making. Adoption required by all cooperative group housing societies. 12

13 Stoppage of leaf burning and instead being used make compost. Commitment required. Use of Jute/ Cloth bags instead of plastic bags. Switch required. 13

14 Cities and Carbon Credits 14

15 Why Cities Matter? In 1800, 2% of world s population lived in cities. Currently, it is 50% and heading towards 60% by Urban populations are expected to grow by 2 billion people within 30 years. Cities in developing countries are expected to absorb 95 percent of this increase. Over, 1 billion people live in urban slums. In the least developed nations, slums house 70% of the urban population. Droughts and floods in rural areas have increased migration to cities. By 2030, if nothing is done, 15 slum population will reach 2 billion.

16 KEELING CURVE

17 Reducing Emissions requires action across many sectors ENERGY EMISSIONS Power 24% Industry 14% Other Energy related 5% Waste 3% Transport 14% Agriculture 14% Buildings 8% Landuse 18% Total emissions in GtCO 2 e NON-ENERGY EMISSIONS 17

18 CO2 Total Emissions Mt of CO US China Russia Japan India Germany Canada UK Italy Korea 18

19 CO2 Emissions Per Capita by Groups Mt of CO Series Anex-I AGA BGA World Average 19

20 Aggregated Picture Per capita CO2 emissions of different groups of countries (2005) 20

21 Equity Principle Comparison Total and per capita emissions of group A & B 21

22 Carbon dioxide emission projections EIA Reference Case, MtCO2 (From Energy ) Country Avg. Annual Growth Total Growth World Annex-I Non Annex-I United State of America Western Europe China India Brazil % 1.10% 3.10% 1.4% 0.5% 4.00% 2.90% 3.0% Source : Climate Analysis Indicators Tool (CAIT) Version 4.0 Washington DC, World Resource Institute, % 28.9% 100.5% 38.7% 11.4% 144.8% 94.3% 98.9% 22

23 CDM Process 23

24 HOW? Exchanges Largely used for EUAs Not much activity in CERs VER exchange in place (CCX) but commands lower prices than OTC market Direct Sale Avoid Commission No Guarantee of market price (narrow lens on buyer market) Must deal with market risk and complexity Auctions Few auctions held for CERs/VERs CERs are not a commoditized product many features cause differences in price Seller s credit, project type etc Intermediaries Market professionals matching buyers and sellers Develop optimal transaction structures Incentive structure to deliver the highest price to the seller 24

25 When? 25

26 Status of the CDM Measuring Success An explosion of activities 26

General Overview of the CDM To date : 991 registered CDM (517 LS + 474 SSC) projects 1.

27 General Overview of the CDM To date : 991 registered CDM (517 LS SSC) projects 1.19 billion CERs expected to the end of 2012 In Pipeline : 3000 projects 2.7 billion CERs expected to

28 Project Pipeline Global Host Country China: 976 (>1000) India: 753 (835) Mexico: 180 Brazil: 171 Malaysia: 36 Philippines: 27 Indonesia: 24 Israel: 22 South Africa: 18 Investor Country UK: 486 Japan: 256 Sweden: 93 Spain: 67 Germany: mn Euro CER acquisition budget 2008 Japanese power utilities to buy 120 mn 28

29 Status of the CDM Registration Region NAI-Africa NAI-Asia and the Pacific NAI-Other NAI-Latin America and the Caribbean Number of projects

30 Portfolio of Host Country Projects approved MSW Total Sectors Energy Efficiency Fuel Switching Industrial Process Renewable Renewable (Biomass) Forestry No. of Projects Sector-wise break-up : Investment done in HC Approved project as on April % 28% 30% 6% 5% Energy Efficiency Fuel Switching Industrial Process MSW Renewable Renewable (Biomass) Forestry 28% 2% 30

31 Indian Projects Registered by CDM-EB 31

32 Project Pipeline India Total no. of projects: 835 (17 Jan 2008) Total CERs: 444 million upto new projects since August 2007 (26,258,604) New Additions Aug 2007 to Jan 2008 Energy Efficiency: 45 (12,731,216) Fuel Switch: 9 (1,793,683) Industrial Process: 7 (2,825,185) Renewable Energy: 40 (5,972,846) Renewable Energy (Biomass): 15 (2,838,781) MSW: 1 (96,893) Forestry: 1 32

33 Projects State-wise AP 34 Maharashtra 27 Chattisgarh 21 MP 5 Gujarat 19 Orissa 8 HP 10 Punjab 18 Rajasthan 26 TN 18 Jharkhand 1 UP 22 Karnataka 30 Utarranchal 3 WB 10 Goa/Pondicherry 2 33

34 Potential in Renewables Technology Wind Power Small Hydropower (< 25 MW) Biomass Energy from Waste Potential MW MW MW 1700 MW Cum. Installation upto March 31, MW 1509 MW 484 MW 26 MW Solar photovoltaic 121 MWp 34

35 Indian Registered Project Size Indian Projects registered in EB 38% Large Small Scale 62% Scale Large Small Scale Total No

36 Investment in CDM Projects 36

37 Renewable Projects Renewabl e Hydro No. of Projects 91 No. of Projects Approved in Renewable Sector Solar 4 Wind Total % 37% 2% Hydro Solar Wind 37

38 Renewable Projects CERs CERs Generation in Renewable Sector Renewable Hydro Solar Wind Total CERs 34,019, ,529 39,101,526 73,677,751 53% 1% 46% Hydro Solar Wind 38

39 Energy Efficiency Projects 39

40 Energy Efficiency Projects CERs 40

41 Historical CER Prices over the Last 4 years 41

42 42

A Dialogue on Cities and Climate Change. Mr. Dharmendra Secretary (Environment & Forests) Govt. of NCT Delhi, India

A Dialogue on Cities and Climate Change Delhi and Its Progress on Tackling Climate Change Issues Mr. Dharmendra Secretary (Environment & Forests) Govt. of NCT Delhi, India INDIA DELHI Latitude :28.38 N