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Carbon Credit

The document discusses carbon offsets and carbon credit trading as incentives for developed countries to reduce emissions. It outlines Malaysia's perspective on the Kyoto Protocol and criteria for eligible CDM projects in Malaysia, which include agriculture, energy efficiency, renewable energy and waste management projects.

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61 views6 pages

Carbon Credit

The document discusses carbon offsets and carbon credit trading as incentives for developed countries to reduce emissions. It outlines Malaysia's perspective on the Kyoto Protocol and criteria for eligible CDM projects in Malaysia, which include agriculture, energy efficiency, renewable energy and waste management projects.

Uploaded by

mhudzz
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Funding Plan

1.0 Introduction
What is a carbon offset?
A carbon offset is a credit for greenhouse gas reductions achieved by one party
that can be purchased and used to compensate (offset) the emissions of another
party. Carbon offsets are typically measured in tonnes of CO2-equivalents (or
CO2e) and are bought and sold through a number of international brokers, online
retailers and trading platforms.

Carbon Credit Trading is the trading of the reduction in greenhouse gas (GHG)
emissions measured in standard units termed as Certified Emission Reductions
(CERs) specifically forcarbon dioxidethat makes up the bulk of emissions
trading. This trading is aimed to reduce GHG emissions.

As incentive for the developed countries, more concerned and proactive in


reducing carbon emissions and subsequently minimize global warming.
2.0 Carbon Credit Trading by Means of CDM
CDM aims at promoting co-operative dealings between the Annex 1 Countries
and the Non-Annex 1 Countries. It works with the dual objectives of helping
Annex 1 Countries to achieve their emission reduction targets and at the same
time serving Non-Annex 1 Countries to promote sustainable development in their
economic growth.

According toArticle 12 of the Kyoto Protocol, through CDM, Annex 1


Countries are encouraged to invest in emission reduction projects (Project) in
Non-Annex 1 Countries (US, EU and other developed countries) and earn some
1 reduction generated in these Projects to offset their emission targets
Funding Plan
3.0 Malaysia Perspective
Malaysia is a Party to theUnited Nations Framework on Climate Changeand
has ratified the Kyoto Protocol on 4 September 2004.

The Kyoto Protocol entered into force on 16th of February 2005. As a developing
country,
Malaysia has no quantitative commitments under the Kyoto Protocol at present.

However, through the Clean Development Mechanism (CDM), Malaysia can


voluntarily
participate in globally reducing emissions ofgreenhouse gases GHGs
4.0 Implementation of CDM under Malaysia
Jurisdiction
To ensure the successful implementation of Carbon Credit Trading through CDM, it is
important for member countries to give priority to the implementation of domestic
policies and measures at the national level.
Ministry of Natural Resources and the Environment has been chosen as the
Designated National Authority (DNA) to control and monitor the development as
well as the administration of CDM in this country.

2
Funding Plan
5.0 Eligible CDM Projects
According to the ministry, the eligible projects are subjects to the following
categories;

1. Agriculture (Composting),
2. Energy Efficiency,
3. Landfill Gas to Electricity,
4. Landfill Gas Flaring Reduction,
5. Manufacturing Industry,
6. Renewable Energy (Biomass),
7. Renewable Energy (Biogas),
8. Renewable Energy (Hydropower),
9. Animal Waste.
Emission reductions resulting from each project activity shall be certified by
approved entities to this Protocol, on the basis of:

Voluntary participation approved by each Party involved;


Real, measurable, and long-term benefits related to the mitigation of climate
change; and
Reductions in emissions that are additional to any that would occur in the
absence of the certified project activity.

3
Funding Plan
Criterion 1 : Project must support the sustainable development policies of Malaysia and
bring direct
benefits towards achieving sustainable development.

Criterion 2 : Project implementation must involve participation of Annex 1 Party/Parties


as CER buyer.
In addition, they are encouraged to participate as equity or technology
providers.

Criterion 3 : Project must provide technology transfer benefits and/or improvement of


technology,
including enhancement of local technology.

Criterion 4 : Project must fulfil all conditions underlined by the CDM Executive Board as
follows: i.
Voluntary participation ii. Real, measurable and long-term benefits related to
mitigation
of climate change, and iii. Reductions in emissions that are additional to any
a) minimizes degradation to the environment
that would
b) hasoccur
zero in
or the
lowabsence
green house gas
of the (GHG) project
certified emission
activity.
c) safe for use and promotes healthy and improved environment for all forms
of life
Criterion 5 : Project proponent should justify the ability to implement the proposed CDM
projectd) conserves the use of energy and natural resources; and
e) promotes
activitythe use of renewable resources

4
Funding Plan

5
Funding Plan
Criterion 1 : Project must support the sustainable development policies of Malaysia and
bring direct
benefits towards achieving sustainable development.

Criterion 2 : Project implementation must involve participation of Annex 1 Party/Parties


as CER buyer.
In addition, they are encouraged to participate as equity or technology
providers.

Criterion 3 : Project must provide technology transfer benefits and/or improvement of


technology,
including enhancement of local technology.

Criterion 4 : Project must fulfil all conditions underlined by the CDM Executive Board as
follows: i.
Voluntary participation ii. Real, measurable and long-term benefits related to
mitigation
of climate change, and iii. Reductions in emissions that are additional to any
a) minimizes degradation to the environment
that would
b) hasoccur
zero in
or the
lowabsence
green house gas
of the (GHG) project
certified emission
activity.
c) safe for use and promotes healthy and improved environment for all forms
of life
Criterion 5 : Project proponent should justify the ability to implement the proposed CDM
projectd) conserves the use of energy and natural resources; and
e) promotes
activitythe use of renewable resources

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