Background
Arguments are going on among the developed countries and the limits of carbon and its responsibilities. One side is a reason that developing countries are the countries emitting the most carbon, as such, should be their responsibility to restore the carbon levels to mutually agreed levels. On the other hand, developing countries justify their stand by saying that developed countries have intensities of carbon emitting more (carbon emissions per capita), moreover, control over emissions carbon using expensive technologies will hamper the growth of these countries and will benefit the technology sourcing countries.
In the long run, emissions from pre-developed countries may not justify the carbon emissions from developing countries ungoverned. Therefore, developing countries in the management of India brought another model, where the targets should be set to increase efficiencies or reduce specific consumption of energy, which will ultimately reduce carbon emissions, instead targeting carbon emissions directly. This approach will encourage industries or energy-intensive units to improve efficiencies and reduce carbon emissions without undermining development opportunities.
Perform, Achieve and Trade
Perform, Achieve and Trade or PAT, is a country market mechanism to promote efficiencies. There were identified Consumers Designated or DCS (intensive industries or facilities), they will have to comply with these efficiency targets. During the first, target setting phase, efficiency targets, in terms of reduction in specific consumption, SEC, and the compliance period shall be established. These targets will depend on the efficiencies of existing facilities, and thus vary from unit to unit. Transparent mechanism will ensure that no negotiations going on during this step. Durationof cycle PAT was identified as three years. During this period, the DC should make an effort and comply to meet the targets set. In case, the unit at work and reduce the SEC with the ceiling under the target, they will be banking issues and negotiable Energy Saving Certificates (ESCerts). Conversely, if the unit under perform to achieve its goals, or to pay penalties or buy ESCerts market, which are controlled by the Power Exchange. Monitoring and verification of energy savings will be undertaken by Energy Auditors Appointed (DENAS), again through a transparent system.
One Energy Saving Certificate (ESCert) shall be equal to a 1 Tuna oil equivalent (toe) and reward its market price may vary depending on oil and other related aspects including forces market.