Hailing the outcome of crucial Durban talks, India Inc today said the decision to continue with UN carbon market beyond 2012 would help companies to focus on "enhanced action" to fight climate change.
Seen as a major victory for India and other developing countries, the European Union agreed to continue with targets for reduction of carbon emission, under the Kyoto Protocol, beyond 2012.
"It (clear future direction for carbon markets) also indicates a new lease of life for Clean Development Mechanism (CDM), especially in the Indian context where this market mechanism under the Kyoto Protocol has been a catalyst for enhanced action on climate mitigation by Indian industry," industry body Ficci said.
The existing UN Clean Development Mechanism allows companies that are into environment-friendly projects to trade in carbon credits. This market is helping many players, including Indian entities, to generate revenues through trading of carbon credits.
"Market mechanisms are the key enablers for industry engagement in climate mitigation. The extension of Kyoto Protocol is a great boost for the carbon markets," Ficci Secretary General Rajiv Kumar said in a statement.
Kyoto Protocol is a legally binding climate treaty, aimed at tackling climate change issues. Ficci said that companies can now gear up for more positive action and innovation to address the challenge of climate change.
However, CII past President Arun Bharat Ram said that there is a need for more clarity on the new Protocol which is likely to come into force in 2020 and which would impose emission restrictions on all countries.
"This agreement should account for the historical and current emissions of countries in setting the targets," Ram, who led the CII CEOs delegation to Durban talks, said in a statement.
According to Ficci, India must ensure that agreed legal outcome in no way hampers the development goals of the country.
With extension of Kyoto Protocol, Indian industry should focus on developing more Clean Development Mechanism (CDM) projects, Assocham Secretary General D S Rawat said in a statement.
"Transitioning to a low-carbon economy presents multiple opportunities to India, including sustainable economic growth, infrastructure development through low-carbon technologies, enhanced energy security, green jobs and a leading role in the clean technology sector," he noted.