After the Cancun agreement, a death-knell was sounded on the Kyoto Protocol, which has been a domineering global framework since the 1990's, under which climate change mitigation and adaptation efforts were designed. But consultants are advising companies to go the whole hog on identifying future projects which can qualify as CDM projects under the UNFCCC to earn carbon credits before the scheme expires in 2012.

"The DNA (designated national authority, i.e. India) and UNFCCC are receiving CDM projects from India in good numbers. The CDM projects that are and will be registered will continue to receive credits. Many believe that such credits will still be acceptable under new mechanisms and their markets could be developed countries and developing countries that have accepted targets under the Cancun agreement,'' said Ram Babu, CEO, General Carbon Advisory Services, allaying fears on the outcome of the carbon market post 2012.

Indian CDM projects earn an income by trading carbon credits or certified emission reductions (CERs) to developed countries. A CER is issued on mitigation of every tonne of carbon dioxide emission under CDM. In January 2011, so far, over 50 Indian projects were issued CERs. Atul Sanghal (head - global execution), EVI, said, "it's very important that project promoters push registration by December 2012 to be able to sell CERs in the post 2012 carbon market."

Experts believe that more number of projects would move in the CDM pipeline to be able to get registered before December 2012. Does that mean that projects which get registered post 2012 would face uncertainty on the sale of their carbon credits? Sanghal said: "With a positive indication at Cancun of the continuation of CDM post-2012, we expect that above projects would be allowed to operate in any future system.''

As per a report on post-Cancun possibilities and expectations by General Carbon Advisory Services, "It is very likely that the projects that are registered and generating CERs will be able to use such credits for meeting commitments of the host country or developed country under a new mechanism.'' Experts believe that many developed and developing countries will deploy market mechanisms to meet their targets under Cancun agreements.

The report said the market for UNFCCC emission reductions post-2012 will be large, widespread, and less fragmented and different from the one that exists today. "We envisage there will be a number of domestic markets, with a portion of the domestically traded carbon credits having international linkage,'' it said.

Paying heed to what experts have to say, more companies are expected to be going in for projects clearances at the DNA level. This is the first step before a company can register its project under the UNFCCC's CDM scheme. Ram Babu said, in the long term, this will result in increased investments and larger carbon markets.