The protocol includes mechanisms which allow developed economies to meet their greenhouse gas emission limitation by purchasing GHG emission reductions from elsewhere. These can be bought from financial exchanges, from projects which reduce emissions in developing economies, like China and India, under the Clean Development Mechanism (CDM). CDM Executive Board accredits Certified Emission Reductions (CER) which can be bought and sold in this …show more content…
There is no local demand in the region except from Japan, which remains the major buyer of CERs in Asia to meet its Kyoto obligations. Other Asian countries still do not require companies to reduce emissions. An exchange requires liquidity for which a healthy match of demand and supply is necessary. • Chinese Surge: China is getting surging ahead of India as far as trading in carbon credits is concerned. China which accounts for 46% of current clean development mechanism (CDM) projects, against 36% for India is a major competitor. Given China’s capacity to implement projects on massive scale, it threatens to eat up massive share in this market. According to analysts, by 2012 the CER market in Asia is expected to be dominated by Chinese firms with a 66% share and India with just