Role of carbon credits and carbon footprints in the Middle East

Introduction

Many organisations across the universe have improved attempts geared towards guaranting societal duty and concern moralss are followed when set abouting organisational activities. Consumers are now cognizant of the ethical and societal duty which concern organisations have towards society. Due to the effects of environmental devastation, consumers are inclined to tie in themselves with houses which manufacture merchandises while following environmental preservation standards. Recently, inauspicious effects of environmental devastation such as clime alteration and planetary heating has increased demand for green merchandises or houses which observe environmental ordinances. In the Middle East and particularly the UAE, there is a demand for merchandises which conserve energy and which are reclaimable or can be recycled ( Anderson et. al. , 2006 ) . This explains the increased demand in the UAE for merchandises such as intercrossed autos, green edifice stuffs, reclaimable bags and others.

Carbon footmarks and credits are two common signifiers of mensurating the impacts which organisations have on the environment. Carbon footmarks are emanations of nursery gases which are attributed to a merchandise or an organisation ( Wiedmann & A ; Minx, 2008 ) . These gases are emitted due to ingestion of fuel and fuel merchandises, stuffs, manufactured goods and fuel beginnings such as coal and wood. Carbon recognition on the other manus represents licenses or certifications by concern organisations leting them to breathe C dioxide or C equivalent to one metric ton. It is a signifier of extenuating C emanations by international and national markets. Already, Qatar and the UAE implement the C credits as a signifier of cut downing C emanations.

This paper will discourse C footmarks and emanations every bit far as the societal duty and ethical function of concern is concerned. The paper will besides discourse how C footmarks and credits work in order to understand their benefits. Their relevancy to concern planning for sustainability and environment in the Middle East will besides be analyzed. The paper will curtail research to the UAE and other states in the Middle East. The discussed issues will be summarized at the terminal of the paper.

Carbon footmarks

Carbon footmarks have been defined as emanations of nursery gases which are attributed to a merchandise or an organisation ( Wiedmann & A ; Minx, 2008 ) . Greenhouse gases arise from ingestion of fuel and fuel merchandises, stuffs, manufactured goods and fuel beginnings such as coal and wood. The term originated from ecological footmarks in environmental surveies. In order to mensurate the C footmarks of organisations, an appraisal on emanations known as the GHG is undertaken. This measuring determines the degrees of C emitted by concerns in a part. Once this information is known, it is possible to develop a scheme aimed at extenuating C footmark degrees ( Wiedmann & A ; Minx, 2008 ) . Such schemes include usage of alternate energy beginnings such as air current and solar or execution of schemes to conserve the environment such as seting trees.

In the Middle East economic systems, there are certain factors which affect the degrees of C footmarks. These include economic end product, population, C strength and energy in the economic system ( Beaumont et. al. , 2008 ) . Businesss and parts which aim at cut downing C footmarks aim these factors. By and large, in order to efficaciously cut down C footmarks, states and concerns should either endeavor to cut down trust on C fuels or cut down energy degrees used in production.

Carbon credits

Carbon credits have been defined as licenses or certifications by concern organisations leting them to breathe C dioxide or C equivalent to one metric ton ( Wiedmann & A ; Minx, 2008 ) . It has been recognized that C emanations are some of the most harmful gases to the environment and C credits aim at extenuating their release into the ambiance. Carbon trading is form of trading in emanations. In order to implement C credits, C degrees in the ambiance are measured and capped to find the most sustainable degrees which will take to minimum harm to the environment. After this is performed, the capped degrees are allocated to modulate beginnings in the assorted markets.

The major aim of C credits is to promote markets to breathe less C emanations when set abouting commercial and industrial procedures. Since the C credits are sold, the gross generated can besides be used to fund environmental preservation attempts, including C emanation decrease indifferent parts of the universe. There are many houses which have specialized in selling C credits. These credits are sold to concerns voluntarily and these concerns strive to cut down C emanations in their activities. Demand for C credits in the Middle East has begun to lift and there is an addition in houses selling C credits to concerns. This has seen positive impacts every bit far as decrease of C emanations is involved. Further analysis of the effects of C credits and C footmarks in the Middle East will be discussed in the undermentioned subdivision of the paper.

Kyoto protocol and the Middle East

The Kyoto protocol is an understanding amongst some states which are members of the UN to take steps to extenuate the inauspicious effects of clime alteration. The major end of this model is to stabilise nursery gases and cut down their effects on the environment. There are over 190 provinces which have ratified and signed the protocol including Middle East states such as Yemen, Qatar, Saudi Arabia, UAE, Kuwait and others ( Daya & A ; Carr, 2010 ) . Assorted states have undertaken to cut down these emanations by more than 5 % as at the degrees present in 1990. Middle East states such as UEA, Saudi Arabia and Qatar are some of these states. Several enterprises are taken to accomplish the aims of clime alteration by member states and these include clean development mechanism and emanations trading.

Each of the Middle East states which ratified the Kyoto Protocol has some assigned units of C emanations which are entered in single state registers ( Daya & A ; Carr, 2010 ) . In line with the protocol, these states including Qatar and the UAE have assigned the allowed emanations to concerns and organisations and set quotas on the emanations which each concern should let go of into the ambiance. This is undertaken through the sale of C credits where concerns in these Middle East states are allowed one metric ton of C emanation. Businesss which have non exhausted their quotas near the terminal of their fiscal twelvemonth may sell their staying quotas to those which are about to wash up their bounds in order to guarantee that all concerns observe the allowable bound in emanations. Businesss which have exhausted their quotas are besides allowed purchase excess quotas in unfastened markets or private endeavors.

Although there is an increased demand for energy from consumers, concern organisations and states such as Qatar and UAE which have ratified the Kyoto Protocol, have to guarantee that the C emanations do non transcend the allowable bounds. Business proprietors are hence forced to put in alternate energy beginnings in order to run into the demand for confining emanations. Others prefer buying modern machinery which has lower emanation rates. This will guarantee that inauspicious effects of clime alteration are mitigated non merely in the Middle East but across the universe.

Flexible mechanisms

The challenges of keeping the agreed C emanations by states which have ratified the Kyoto Protocol have been recognized by member states. There are certain states or concerns which may be unable to retain the allowable bounds and achieve their growing and development aims and ends. There are besides states and concerns which use resources which have high degree of C emanations and which make it hard to stay within the allowable degrees. For case, Saudi Arabia is an oil bring forthing state which releases high degrees of C emanations when treating oil. Due to these challenges, the Kyoto Protocol members have introduced certain flexible mechanisms which may assist these states deal with the challenges. These are tradable credits which may be traded within states or parts. There are three ways in which such states may merchandise their C credits regionally ( Daya & A ; Carr, 2010 ) .

The first is the joint execution scheme where states which are about to set about undertakings which would take to high degree of C emanations are allowed to set about these undertakings in other states. Such an understanding allows states with higher emanation to reassign these emanations to states with lower emanation for a consideration. Both states would reciprocally profit and the planetary environmental preservation attempts are achieved. Few states in the Middle East have taken advantage of this attack. The 2nd scheme is the clean development mechanism. Under this scheme, developed states are allowed to fund C emanation decrease attempts in developing states at lower costs. States such as Saudi Arabia may utilize this scheme to fund developing states such as African states in C decrease attempts. This would be lower sums compared to the cost of such a scheme in developed states. However, the benefits of environmental preservation in such instances would non merely be enjoyed by the underdeveloped states but by the universe at big. The developed states would profit from increased credits due to accomplishment of its emanation decrease enterprises while developed states would profit from clean engineering and capital investing. The UAE presently is developing programs to implement this scheme in developing states.

Finally, the 3rd scheme aimed at run intoing the challenges of C emanation schemes is emission trading between states. Merely as how concerns can merchandise emanation credits, states are besides able to merchandise these credits. States which are about to wash up their allowable bounds may merchandise credits with those with sufficient allotments and frailty poetry. In most of these instances, operators are licensed by single states to sell such C credits as opposed to direct authorities to authorities minutess

Carbon footmarks and credits in Middle East

Due to the effects of environmental devastation including C emanations, clime alteration and planetary heating, consumers in the Middle East have began tie ining themselves with houses which manufacture merchandises in environmentally friendly ways. There has been an addition in reclaimable merchandises and energy economy merchandises including intercrossed vehicles ( Daya & A ; Carr, 2010 ) . This move has forced many makers to accommodate to the demands of the market in order to maximise gross revenues grosss. Retailers who have non embraced environmentally friendly ways of bring forthing goods have begun sing shriveling gross revenues volumes and a lessening in consumer good will.

Katar

There are many concerns in the Middle East and particularly in Qatar and the UAE which have embraced the usage of C credits to cut down their C footmarks. One of these concerns is a renewable energy company called Masdar which is based in the UAE. Masdar has programs to get C credits for waste heat and solar undertakings from the UN in order to conform to the ends of the Kyoto Protocol of which the UAE is a member. Another house which is acute on geting C credits is the Qatar Petroleum which is the national oil house tally by the Qatar authorities. The UAE and Qatar are the largest C emitters in the universe per capita and their strive to fall in the Kyoto Protocol and use for C credits makes them the first states in the Middle East to take such enterprises. Qatar besides has a undertaking at Al-Shaheen, a natural gas fabrication works, and it is meaning at using for C credits for this works.

Abu Dhabi

Abu Dhabi has already been granted entree to carbon credits by UN in the signifier of beginnings which are enterprises which encourage developed states to back up C decrease enterprises in developing states. This is similar to the clean development mechanism before discussed as one of the Kyoto Protocolaa‚¬a„?s efforts to cover with challenges confronting execution of the C decrease attempts. Already, two undertakings commissioned in Abu Dhabi will have 2.5 million credits between the current twelvemonth and 2018. Presently, the credits which have been advanced to the UAE are valued at over 29 million euro. In add-on, Abu Dhabi is in the procedure of building atomic and solar workss which will run into power demands and by 2015, the Abu Dhabi is aiming its renewable energy beginnings to organize over 7 % of its overall energy beginning.

Challenges of geting C credits in the Middle East

Business people in the Middle East are admiting that a serious challenge confronting many oil houses is warranting the demand for C credits. Although most houses which manufacture oil and its merchandises in the Middle East have high C footmark emanations, it is disputing to turn out that oil undertakings require C credits and extra income earned from it. The UAE is among the states doing the greatest attempts to cut down C emanations in the Middle East and the development of C gaining control engineering is a milepost towards achieving the ends of cut downing emanations. Carbon gaining control engineering is engineering which captures C emanations and directs them underground before they are released into the ambiance.

Another challenge faced by houses in Middle East associating to geting C recognition relates to be. There is a high cost which is incurred upfront before a house can register for C credits ( Hansen, 2000 ) . For little houses in the Middle East, this cost may be prohibited towards registering for C credits and cut downing the C footmarks. A solution to this job lies with the bundling of many little undertakings to organize a larger 1. When many little houses bring together their undertakings and organize a larger one, they may jointly incur the cost of C credits thereby cut downing their overall costs. They will besides be able to cut down their C emanations.

Relevance to concern planning for sustainability and environment in Middle East

Carbon footmarks and credits are really utile to the modern concern environment non merely in the Middle East but across the universe. There is a move towards environmental preservation attempts and concerns which support this cause have been seen to pull goodwill signifier consumers. Those which do non hold recorded lower gross revenues grosss due to their inability to be in touch with causes which the market relates to. In the Middle East, it has been discussed that consumers are traveling towards environmental preservation attempts by buying energy economy merchandises, reclaimable merchandises and back uping houses which produce goods in environmentally friendly agencies. It is hence clear that for any concern to run into its aims, it has to run within environmentally friendly ways. It besides has to back up causes which are similar to those supported by consumers including corporate societal duty and ethical patterns. The relevancy which C footmarks and C recognition has on the Middle East concern environment sing sustainability will be briefly discussed below ;

Consumer behaviour

It has been discussed that due to the inauspicious effects of environmental devastation, consumers are cognizant of the demand to transport out environmental preservation. The effects of devastation of the environment including planetary heating, clime alteration, shrinkage of ice caps and others have become a world which threatens the endurance of world ( Changnon & A ; Bell, 2000 ) . Most consumers have hence embraced environmental preservation concerns and demand merchandises which are produced through environmentally friendly ways. In the Middle East, there are many environmental groups which lobby for houses to encompass environmental preservation schemes which fabricating goods. These groups which include the Global Footprint Network encourage consumers to eschew merchandises which are developed by houses which pollute the environment. As a consequence, houses are forced to follow the usage of clean engineering and C emanation decrease schemes such as C credits.

Manufacturers in the Middle East and other parts of the universe have hence been forced by the alterations in consumer behaviour and market tendencies to encompass C credits scheme. Consumers have entree to a broad assortment of merchandises due to technological alteration and invention and they hence have a bargaining power. Middle East houses which do non bring forth goods in environmentally friendly ways such as through usage of C credits risk being shunned by consumers who will choose to buy replacements from makers who support their cause for environmental preservation. Carbon recognition schemes are hence really relevant to the concern environment in the Middle East for houses keen on increasing gross revenues grosss and developing client good will and trueness. Businesss which are acute on developing long term sustainable patterns should hence develop an environmental preservation program which may include the C recognition scheme in order to run into their aims.

Kyoto Protocol

The Kyoto Protocol is another enterprise which makes C recognition scheme relevant to the concern environment in the Middle East. It has been discussed that several Middle East states have ratified the Kyoto Protocol and these include Yemen, Qatar, Saudi Arabia, UAE, Kuwait and others. These states are bound by declarations made to cut down their C emanations by more than 5 % of their 1990 emanation degrees. Since the states voluntarily ratified the protocol, many are acute to follow it. The most effectual manner of cut downing these emanations is cut downing emanations by houses, peculiarly those in the fabrication industry. States such as Saudi Arabia and the UAE are some of the largest planetary emitters and the lone manner they can accomplish the ends of the Kyoto Protocol is to guarantee that houses and peculiarly those in the oil industry cut down their emanations. Businesss which operate in the Middle East are hence forced by the authorities to cut down their emanations in order to accomplish the ends of the Kyoto Protocol. The Middle East authoritiess are bound by the confirmation of the Protocol and they have begun presenting C credits to concerns as schemes aimed at cut downing C emanations.

States including Qatar and the UAE have assigned the allowed emanations to concerns and organisations and set quotas on the emanations which each concern should let go of into the ambiance. Many other states in the Middle East are likely to follow the tendencies taken by Qatar and the UAE. Businesss hence have no pick if they are to run in the Middle East concern environment. They are bound by any international understandings which their states enter into. Failure to detect C decrease schemes such as purchase of C credits may be deemed as unethical patterns which may be punished by the authoritiess, environmental protection bureaus or fiscal regulators. The Kyoto protocol has hence made C credits an indispensable portion of concern operation since houses have been forced to buy them and be in line with the coveted aim of Middle East and planetary authoritiess of cut downing C emanations into the ambiance.

Corporate societal duty

Businesss have corporate societal duty towards communities and the society at big. Any concern has a societal duty of authorising local communities through corporate duty plans which use different schemes to accomplish this aim. Consumers are besides cognizant of the societal duty which houses have towards them and their local communities and they have begun tie ining themselves with houses which play of import societal functions in the community. In line with this, the concern organisations which operate in the Middle East and other states have a duty of socially authorising communities and operating in environmentally friendly ways ( Ruddiman, 2005 ) . This responsibility is non vested in the Kyoto Protocol, it is a responsibility expected from corporate organic structures across the universe. Firms are expected to run in ways which do non foul the environment and which socially uplift the criterions of life of local communities.

Due to the importance of corporate societal duty and operating in environmentally friendly ways, many houses have strived to accomplish these aims. One of the common schemes include funding community undertakings, research and increasing consciousness on societal concerns. Other schemes include funding instruction, preparation, offering employment, sponsorships and contributions. In add-on, the ends of environmental preservation are achieved through usage of clean engineering, cut downing energy usage and cut downing C and other harmful emanations to the environment. Carbon credits have gained demand for accomplishing the environmental preservation ends. The demand for societal duty by consumers has hence made C credits relevant to the concern environment in the Middle East. Firms which do non detect this societal duty function hazard losing clients to rivals who embrace these causes.

Decrease in production costs

Recent research has shown that the usage of clean engineering can assist cut down the production costs by every bit much as 20 % in houses in the fabrication industry. Research in developed states such as China has shown that if used efficaciously, clean engineering reduces the production cost by 20 % for capital intensive activities ( Lerner & A ; Wilmoth, 2006 ) . Decrease of the production cost is a major end for any concern. This is because decrease in production leads to decrease in the overall merchandise monetary value and this attracts consumers to these comparatively cheaper merchandises. The benefits of clean engineering use to houses in the fabrication industry. In the Middle East, there are many houses which operate in this industry and particularly due to the presence of oil fabrication houses. The usage of clean engineering would offer monolithic benefits to this industry.

Although non many houses in the Middle East have realized the possible benefits of cost decrease due to encompassing clean engineering, there has been increased demand for this engineering over recent months. Firms which have benefited from the clean engineering have acted as instance surveies and more and more Middle East houses have begun encompassing clean engineering in order to cut down production costs. Such firmsd have embraced C credits as some signifiers of implementing the clean engineering scheme. For case, a renewable energy company called Masdar which is based in the UAE has programs to get C credits for waste heat and solar undertakings in order to cut down production costs and derive other benefits. Two undertakings commissioned in Abu Dhabi will have 2.5 million credits between the current twelvemonth and 2018. the possible benefits of production cost decrease will therefore do C credits popular clean engineering schemes in the Middle East in the close hereafter harmonizing to the current tendencies by Middle East houses.

Summary and decision

The function of C credits and C footmarks in the Middle East concern environment has been discussed in item. Carbon footmarks have been defined as emanations of nursery gases which are attributed to a merchandise or an organisation while C recognition on the other manus represents licenses or certifications by concern organisations leting them to breathe C dioxide or C equivalent to one metric ton. Carbon footmarks determine the degrees of C emitted by concerns in a part. Once this information is known, it is possible to develop a scheme aimed at extenuating C footmark degrees. Such schemes include usage of alternate energy beginnings such as air current and solar or execution of schemes to conserve the environment such as seting trees. Carbon credits purpose at cut downing C emanations. Carbon trading is form of trading in emanations. In order to implement C credits, C degrees in the ambiance are measured and capped to find the most sustainable degrees which will take to minimum harm to the environment. After this is performed, the capped degrees are allocated to modulate beginnings in the assorted markets.

The C recognition schemes are implemented under the confirmation of the Kyoto Protocol. The Kyoto protocol is an understanding amongst some states which are members of the UN to take steps to extenuate the inauspicious effects of clime alteration. The major end of this model is to stabilise nursery gases and cut down their effects on the environment. There are over 190 provinces which have ratified and signed the protocol including Middle East states such as Yemen, Qatar, Saudi Arabia, UAE, Kuwait and others. Each of the Middle East states which ratified the Kyoto Protocol has some assigned units of C emanations which are entered in single state registers. The challenges of keeping the agreed C emanations by states which have ratified the Kyoto Protocol have been recognized by member states. The joint execution scheme allows states which are about to set about undertakings which would take to high degree of C emanations are allowed to set about these undertakings in other states. The clean development mechanism allows developed states to fund C emanation decrease attempts in developing states at lower costs while emanation trading allows states which are about to wash up their allowable bounds to merchandise credits with those with sufficient allotments and frailty poetry.

Due to the effects of environmental devastation including C emanations, clime alteration and planetary heating, consumers in the Middle East have began tie ining themselves with houses which manufacture merchandises in environmentally friendly ways. Other factors which have contributed to the addition of usage of C recognition schemes by UAE houses include the Kyoto Protocol which forces concerns to set about C decrease schemes, corporate societal duty functions which dictate for operation of houses in environmentally friendly ways and decrease in production costs attributed to utilize of clean engineering. Although non many houses in the Middle East have realized the possible benefits of cost decrease due to encompassing clean engineering, there has been increased demand for this engineering over recent months. It is of import for UAE houses to encompass decrease of C emanation through C recognition schemes among other environmentally preservation schemes in order to develop client trueness and cut down the planetary emanation of C into the ambiance. This will be good to the concerns every bit good as to humanity whose endurance is threatened by environmental devastation.