August 17, 2007 (LBO) – Rice farmers in India™s West Bengal made history when they successfully traded carbon credits for cash – with lessons for Sri Lanka taking its first tentative steps in carbon finance. About 33 Indian rice mill owners banded together and agreed to switch from polluting diesel oil they used in their mills to rice husk.
Their group, called the Green Power Consortium traded the savings they made in carbon dioxide emissions by using an eco-friendly fuel, for cash.
South Asia, led by India is a hotbed for carbon projects with the potential for Sri Lanka estimated at 2.5 billion rupees through potential sales of 2.5 million tons worth of carbon credits annually.
Carbon trading turns savings in carbon dioxide emissions by developing countries into a notional commodity and sells it to a developed country to offset their own emissions, Das explains.
Revenues from carbon trading can be earned over a 10-year period on average, according to rules laid down in the United Nations Kyoto Protocol.
The costs of buying carbon credits from a developing country however, should be less than implementing the (eco-friendly) changes in the developed country, Das said.