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Delibrations on Seminar on 'Climate Change and Markets'
The Indian Society for Ecological Economics (INSEE) and Takshashila Academia of Economic Research (TAER) organised a one-day seminar on Climate Change and Markets: Opportunities, Challenges, and Policy Concerns, in association with TERI University at the TERI University campus in Vasant Kunj, New Delhi , on February 11, 2011 . The seminar was marked by some good paper presentations, a participation of around 100 participants, and was highlighted by the presence of Minister of State for Environment and Forests, Dr. Jairam Ramesh, as Chief Guest, who also released a book on Debate over Climate Change and Global Warming edited by Dr. Madhoo Pavaskar (Director of TAER) and Dr. Nilanjan Ghosh (General Secretary of INSEE, and Senior Vice President of TAER). Mr. Suresh Prabhu, Former Cabinet Minister and MP, was also present as the Guest of Honour.

The inaugural session was chaired by Prof. Bhavik Bakshi, Vice Chancellor of TERI University. Prof. Kanchan Chopra, President of INSEE, talked on the problems of climate change and brought in the critical debate on whether markets can resolve climate change problems. She also highlighted INSEE's work in this regard, and announced that INSEE is publishing a volume titled Environmental Governance: Approaches, Imperatives and Methods , in association with Macmillan publishers, out of the selected papers presented in the Fifth Biennial Conference of the Society. She also announced that INSEE is organising its sixth biennial conference at CESS, Hyderabad , during October 20-22, 2011 . Dr Madhoo Pavaskar, Director of TAER, raised the question: is climate change a myth or a reality? According to him, if climate change is a reality, then climate exchanges need to be set up. Thus, he expressed that the real recipe for emission reductions is not regulations but markets.

Mr Suresh Prabhu, the guest of honour, agreed that climate change is a natural phenomenon existing since time immemorial. But since the Industrial Revolution, the change is more manmade than anything else, and will be felt quite strongly. He also expressed that markets can be one of the solutions.

The Environment Minister Jairam Ramesh labelled himself as a “market agnostic”, and so was not sure whether markets would be the only solution to the climate change problem. He felt that if the climate change problem was left to unbridled market forces, then the next financial crisis would be round the corner because of the carbon and climate change markets. He hence recommended a caution while looking at markets for solution. He reiterated that India is committed to reduce emission intensity, which means lesser emissions units for every incremental increase in GDP.

Dr. Nilanjan Ghosh, General Secretary, INSEE and Senior VP, TAER, while offering the Vote of Thanks at the end of the Inaugural Session, introduced the audience with the theme of the Seminar and the issues on which the deliberations were supposed to take place.

The ensuing three sessions of the seminar, revolving around the themes of “Critical Issues of Climate Change and Solutions,” “The Role of Environmental Markets,” and “Towards Development of Derivative Markets” saw 12 interesting papers being presented and were marked by probing questions from an audience that actively participated in the deliberations. The day-long deliberation attempted to answer the following: Can markets really help an economy like India to fulfill its obligations under the various environmental conventions to combat desertification, biodiversity degradation, and global climate change? Can markets further create the possibility of engaging various rural communities in formal market transactions, thereby reducing the extent and magnitude of poverty? What types of markets can do that? Can electronic exchanges on environmental products work under such circumstances? How can they be established, and what types of products can be traded there?

The first session on critical issues of climate change and solutions was supposed to be chaired by Prof. Jyoti Parikh, who had to leave early due to health reasons but not before delivering an interesting speech on adaptation issues. Dr Nilanjan Ghosh then chaired the session. Prof. Surender Kumar presented a joint paper by him and Parul Gupta on “Tracking the Anthropogenic Drivers of CO 2 Emissions Growth in India ”. This interesting paper attempted to address three issues: construct and analyse CO 2 emissions inventory for a panel of Indian states for the years 1980 through 2007, track the anthropogenic drivers of CO 2 emissions at state level using the IPAT identity, and apply the STIRPAT model to project and compare CO 2 emissions estimates for 2020 under two scenarios: emissions estimates based on CO 2 intensity of 2005, and emission estimates based on a reduction in the intensity by 20 percent relative to 2005. This was followed by Dr Nilabja Ghosh's presentation on “Agriculture as Sink” where she spoke on how carbon accumulation in agricultural soil could offset emissions made elsewhere. The third paper by Amsalu Woldie and Prof. Surender Kumar focussed on the “Trilemma of Biofuels: Energy, Food Security, and the Environment.”

The theme of the second session was “The Role of Environmental Markets.” Prof. Kanchan Chopra chaired the session. The theme of the joint paper by Pulak Mishra, Bhagirath Behra, and Narayan C. Nayak was on “Markets for Environmental Services” and the opportunities and challenges therein. Dr. Pulak Mishra presented the paper. According to the paper, the design of [payments of environmental services] PES schemes is diverse and cannot be replicated. Given the diverse and complex ecosystem and their management institutions, India has tremendous potential to develop similar markets for environmental services that can help promote both environmental conservation and livelihood of poor people. The next paper by Dalbir Singh was on “Market Mechanism in Managing Water Resource in Diverse Environments,” and the paper by Pleasa Abraham and G. Haripriya focussed on “Barriers to the Deployment of Low Carbon Technologies” because of “persistent market failures and policy inertia due to the existence of carbon lock-in[s]” that create these barriers. Therefore, “in spite of their apparent environmental and technological advantages, renewable technologies cannot take off in the market.” The concluding paper of the session was by Dr R. B. Lal, Dr Madhu Verma, Swapan Mehra, and Priyanka Batra. Ms. Priyanka Batra presented the paper, while Madhu Verma, Swapan Mehra and she, together addressed the questions from the audience. The paper dealt with REDD+ and how it could provide market solutions for conserving forests.

The third session on “Towards Development of Derivative Markets” was chaired by Dr Madhoo Pavaskar. The session began with Dr G. Haripriya's paper on “Policy Options for Carbon Locking”—a spill over from the earlier session. The next paper by N. Y. Dinesh Babu was on “Ratings and Risk Mitigation Techniques for Scaling Climate Financing,” was presented by Sudhanshu Sharma because of the author's absence due to health reasons. Arnab Bose wound up the session with his presentation on “Derivatives and the Carbon Market—Redefining the Underlying Asset of the Carbon Derivative.”

That brought to an end an eventful day marked by interesting concerns raised by the presentations from various speakers, and the probing questions from an audience that actively participated in the deliberations.