Publication: State and Trends of the Carbon Market—2004
Loading...
Date
2005
ISSN
Published
2005
Author(s)
Editor(s)
Abstract
This study describes the status of the emerging carbon market, as of May 2004. The carbon market encompasses trades of greenhouse gas (GHG) emission allowances (under the European Union (EU) Emissions Trading Scheme), and project-based transactions, whereby a buyer participates in the financing of a project that reduces GHG emissions, compared with what would have happened otherwise, and gets emission reduction credits in exchange (for example, Clean Development Mechanism, or Joint Implementation projects under the Kyoto Protocol). The study finds that the carbon market is growing steadily. A total of 64 million metric tons of carbon dioxide equivalent (tCO2e) has been exchanged through projects from January to May 2004, nearly as much as during the whole year 2003 (78 million). Furthermore, the demand for emission reductions remains heavily concentrated, with a few EU governments, and Japanese firms the largest buyers. Finally, Asia is now the largest supplier of emission reductions, followed by Latin America, developed economies, and Eastern Europe. Prices of project-based emission reductions in early 2004 have remained essentially stable compared with 2003. In the absence of a standard contract, these prices strongly depend on the structure of the transaction, notably risk-sharing between buyers and sellers.
Link to Data Set
Citation
“Lecocq, Franck. 2005. State and Trends of the Carbon Market—2004. World Bank Working Paper No. 44. © World Bank. http://hdl.handle.net/10986/7457 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication A Novel Tobacco Market Diversification(World Bank, Washington, DC, 2022-04-27)In this working paper, an exploration of available data and information is conducted and findings presented, to support the view that the dichotomous business model and related harm reduction narrative promoted nowadays by the tobacco industry, merits scrutiny by the international community. The promotion of e-cigarettes as welfare enhancing in rich countries, particularly because they are posited to help adult smokers quit, tends to obfuscate a dire reality. The same tobacco industry that promotes (e-cigarettes as harm reduction in rich countries, derives the bulk of its profits by selling cigarettes in lower income countries.Publication Environmental Implications of a Central Bank Digital Currency (CBDC)(Washington, DC : World Bank, 2022-07)Two-thirds of central banks in the East Asia and Pacific (EAP) region have started researching or testing the implementation of a Central Bank Digital Currency (CBDC). At the same time, the region accounts for one-third of world CO2 emissions and is vulnerable to climate risks. As the Group of 7 (G7), European Central Bank (ECB), and Bank of England (BoE) have stated in their public statements, it is increasingly important to consider environmental impact when designing CBDC. However, only a few brief studies have been done on this subject, which will be crucial for the region. This Note explores the environmental implications of CBDC by comparing technical mechanisms and energy consumption within its distributed structure. It also illustrates differences in ecological footprint between CBDC and other payment methods (cryptocurrency, cash, and card networks). As the legitimacy of CBDC is backed by the trust of central banks, CBDC does not need to prove its legitimacy through its technological structure. Therefore, CBDC does not require the energy-intensive consensus or mining mechanisms used by a cryptocurrency, so its energy consumption is lower (comparable to that of a credit card system). CBDC can be designed to use various systems, such as Real Time Gross Settlement (RTGS), Distributed Ledger Technology (DLT), or a mixture of both. Careful deliberation to meet the objectives and implications will be important as CBDC can be a catalyst for financial innovation.Publication Sustainable Cities Towards A Green, Resilient and Inclusive Recovery(Washington, DC, 2022-03)Cities are key to unlocking a climate-smart future for all, as they account for more than 50 percent of the global population, about 70 percent of global energy-related CO2 emissions and 80 percent of global GDP. Urban centers’ share of emissions is expected to grow as the urban population is projected to increase by 2.3 billion people by 20502. As the world recovers from the COVID-19 crisis, cities will present a huge opportunity to rebuild in a way that is climate friendly and meets some of the world’s ambitious climate targets. Cities are viewed as the source of and the solution to many of today's economic, social, and environmental challenges. This is not only because of the concentration of population and economic assets in urban areas, but also because local authorities perform key functions that impact the quality of life of their residents. From an urban management perspective, the leading resource and knowledge sharing platform is the GEF funded Global Platform for Sustainable Cities (GPSC), hosted by the World Bank. The GPSC states that achieving sustainability requires the balanced accomplishment of outcomes against four pillars, namely (1) robust economic growth, prosperity, and competitiveness across all parts of the city; (2) protection and conservation of ecosystems and natural resources into perpetuity; (3) mitigation of greenhouse gas (GHG) emissions while fostering overall city resilience; and (4) inclusiveness and livability, mainly through the reduction of city poverty levels and inequality. The Urban Sustainability Framework (USF), developed to outline the areas of work and support by the GPSC, offers a very useful representation of both outcomes as well as enabling actions and requirements (such as spatial data and good governance) cities could focus on.Publication Structured Lesson Plans for Literacy Instruction(World Bank, Washington, DC, 2022-03-31)Literacy is the cornerstone of education, and a driver of human economic, social, and civic wellbeing. Despite its importance, far too many children fail to become literate. The World Bank uses a measure called learning poverty to indicate when a child cannot read and understand an age-appropriate text by age ten. The best available data showed that more than two-thirds of children in low- and middle-income countries suffer learning poverty. The World Bank is committed to helping countries achieve the learning target: to cut learning poverty by at least half by 2030. Achieving better outcomes in literacy requires a comprehensive effort in many domains. One of the most important is ensuring that students and teachers have and use high-quality instructional materials, especially textbooks, for reading instruction. As countries and systems review their literacy teaching and learning materials, they will want to compare them to the materials from other countries and systems. The purpose of the compendium is to allow such reviews and comparisons by grouping a critical mass of structured pedagogy lesson plans and related materials in one place.Publication WBG COVID-19 Crisis Response Operational Update(Washington, DC, 2022-03-31)This note provides an update on the WBG’s COVID-19 Crisis Response, outlined in June 2020 to help developing countries address the impacts of the pandemic while maintaining a line of sight to long-term development goals. It comprises five short sections: (I) the impacts of COVID-19 and compounding crises on developing countries, (II) an update on the WBG’s operational crisis response and priorities moving forward, (III) the critical role of international coordination, (IV) WBG financing framework for GRID, and (V) concluding remarks.
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication State and Trends of the Carbon Market 2005(World Bank, Washington, DC, 2005-05)This study reviews the state and trends of the carbon market as of May 2005, based on material provided by Evolution Markets LLC, and Natsource LLC, and based on interviews with a large number of market participants. One of the main findings is the regulatory framework of the carbon market has solidified considerably in the past 12 months, with the start of operations of EU ETS on January 1, 2005 and the entry into force of the Kyoto Protocol on February 16, 2005. While regulatory uncertainty continues, notably for the registration of Clean Development Mechanism (CDM) projects by the CDM Executive Board.Publication State and Trends of the Carbon Market 2003(World Bank, Washington, DC, 2003-12-01)The emerging carbon market encompasses both project-based emission reduction transactions, whereby a buyer participates in the financing of a project which reduces greenhouse gases (GHGs) emissions, compared with what would have happened otherwise, and gets some of the emission reductions (ERs) thus generated in return; and, trades of GHG emission allowances allocated under existing, or incoming, cap-and-trade GHG emissions control regimes. This Review of the state and trends of the carbon market as of November 2003, based on material provided by Evolution Markets LLC, Natsource LLC and PointCarbon, and on direct interviews with market participants, suggest that: volume exchanged on the carbon market has more than doubled since 2002; buyers are governments, and public-private partnerships like the Prototype Carbon Fund; in 2003, nine out of ten tones of emission reductions originate from projects located in transition economies or developing countries; prices differ depending on the segment of the market, and on the structure of the transaction; allowance markets dominate in number of transactions, but volume exchanged remains small compared with project-based transactions; and, because of long lead time between project preparation and first "yield" of emission reductions, and absent clarification of the validity of project-based emission reductions beyond 2012, the window of opportunity for project-based transactions is rapidly closing. The report further discusses volumes of GHG Emission Reductions (ERs) up to 2012 only, to provide an idea of the volume that might be available for compliance, since 2012 is the end of the first commitment period of the Kyoto Protocol, and a milestone in most regimes. For projects where vintages 2013 and beyond are purchased (in particular in forestry-related projects), it was assumed an even annual accrual of ERs, unless known otherwise. Also, throughout the paper, volumes are reported in metric tones of CO2 equivalent (tCO2e).Publication State and Trends of the Carbon Market 2011(World Bank, Washington, DC, 2011-06)After five consecutive years of robust growth, the total value of the global carbon market stalled at $142 billion. Suffering from the lack of post-2012 regulatory clarity, the value of the primary Clean Development Mechanism (CDM) market fell by double-digits for the third year in a row, ending lower than it was in 2005, the first year of the Kyoto protocol. The Assigned Amount Unit (AAU) and the United States Regional Greenhouse Gas Initiative (RGGI) markets shrank as well. As these segments declined, the dominance of the European Union Allowances (EUAs) market became more pronounced than ever and the share of the carbon market primarily driven by the EU Emissions Trading Scheme (EU ETS) rose to 97 percent, dwarfing the remaining segments of the market. The carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest on record, while emission levels continued their seemingly inexorable rise. In the end, however, the year may be remembered most for the political opportunities that arose, yet were ultimately failed to materialize in the United States, Japan, Australia, and the Republic of Korea. While the international regulatory environment remains uncertain, national and local initiatives have noticeably picked up and may offer the potential to collectively overcome the international regulatory gap. These initiatives signal that, one way or another, solutions that address the climate challenge will emerge.Publication Climate Change and the Economics of Targeted Mitigation in Sectors with Long-Lived Capital Stock(2009-09-01)Mitigation investments in long-lived capital stock (LLKS) differ from other types of mitigation investments in that, once established, LLKS can lock-in a stream of emissions for extended periods of time. Moreover, historical examples from industrial countries suggest that investments in LLKS projects or networks tend to be lumpy, and tend to generate significant indirect and induced emissions besides direct emissions. Looking forward, urbanization and rapid economic growth suggest that similar decisions about LLKS are being or will soon be made in many developing countries. In their current form, carbon markets do not provide correct incentives for mitigation investments in LLKS because the constraint on carbon extends only to 2012, and does not extend to many developing countries. Targeted mitigation programs in regions and sectors in which LLKS is being built at rapid rate are thus necessary to avoid getting locked into highly carbon-intensive LLKS. Even if the carbon markets were extended (geographically, sectorally, and over time), public intervention would still be required, for three main reasons. First, to ensure that indirect and induced emissions associated with LLKS are taken into account in investor s financial cost-benefit analysis. Second, to facilitate project or network financing to bridge the gap between carbon revenues that accrue over time as the project/network unfolds and the capital needed upfront to finance lumpy investments. Third, to internalize other non-carbon externalities (e.g., local pollution) and/or to lift barriers (e.g., lack of capacity to handle new technologies) that penalize the low-carbon alternatives relative to the high-carbon ones.Publication A City-Wide Approach to Carbon Finance(Washington, DC, 2010)Urbanization and climate change will define much of the 21st century. Urbanization leads to improvement in standards of living, and through the increased density and service delivery efficiency of cities, higher growth can be achieved with lower greenhouse gas emissions. Cities and urban agglomerations house more than 50 percent of the global population and contribute more than 70 percent of Global greenhouse (GHG) emissions. As the share of urban population grows, sustainable urban development emerges as an essential component in addressing climate change. Mitigation often comes at a significant cost. Carbon finance has an important role to play in reducing these costs. Carbon finance is accessible through regulated mechanisms, such as the Clean Development Mechanism (CDM) and Joint Implementation (JI) under the Kyoto Protocol, and through voluntary markets, using the voluntary carbon standard and climate exchanges. City authorities, however, have not been able to fully access market mechanisms for carbon credits.
Users also downloaded
Showing related downloaded files
Publication Supporting Youth at Risk(World Bank, Washington, DC, 2008)The World Bank has produced this policy Toolkit in response to a growing demand from our government clients and partners for advice on how to create and implement effective policies for at-risk youth. The author has highlighted 22 policies (six core policies, nine promising policies, and seven general policies) that have been effective in addressing the following five key risk areas for young people around the world: (i) youth unemployment, underemployment, and lack of formal sector employment; (ii) early school leaving; (iii) risky sexual behavior leading to early childbearing and HIV/AIDS; (iv) crime and violence; and (v) substance abuse. The objective of this Toolkit is to serve as a practical guide for policy makers in middle-income countries as well as professionals working within the area of youth development on how to develop and implement an effective policy portfolio to foster healthy and positive youth development.Publication World Development Report 2004(World Bank, 2003)Too often, services fail poor people in access, in quality, and in affordability. But the fact that there are striking examples where basic services such as water, sanitation, health, education, and electricity do work for poor people means that governments and citizens can do a better job of providing them. Learning from success and understanding the sources of failure, this year’s World Development Report, argues that services can be improved by putting poor people at the center of service provision. How? By enabling the poor to monitor and discipline service providers, by amplifying their voice in policymaking, and by strengthening the incentives for providers to serve the poor. Freedom from illness and freedom from illiteracy are two of the most important ways poor people can escape from poverty. To achieve these goals, economic growth and financial resources are of course necessary, but they are not enough. The World Development Report provides a practical framework for making the services that contribute to human development work for poor people. With this framework, citizens, governments, and donors can take action and accelerate progress toward the common objective of poverty reduction, as specified in the Millennium Development Goals.Publication World Development Report 1984(New York: Oxford University Press, 1984)Long-term needs and sustained effort are underlying themes in this year's report. As with most of its predecessors, it is divided into two parts. The first looks at economic performance, past and prospective. The second part is this year devoted to population - the causes and consequences of rapid population growth, its link to development, why it has slowed down in some developing countries. The two parts mirror each other: economic policy and performance in the next decade will matter for population growth in the developing countries for several decades beyond. Population policy and change in the rest of this century will set the terms for the whole of development strategy in the next. In both cases, policy changes will not yield immediate benefits, but delay will reduce the room for maneuver that policy makers will have in years to come.Publication World Development Report 2009(World Bank, 2009)Places do well when they promote transformations along the dimensions of economic geography: higher densities as cities grow; shorter distances as workers and businesses migrate closer to density; and fewer divisions as nations lower their economic borders and enter world markets to take advantage of scale and trade in specialized products. World Development Report 2009 concludes that the transformations along these three dimensions density, distance, and division are essential for development and should be encouraged. The conclusion is controversial. Slum-dwellers now number a billion, but the rush to cities continues. A billion people live in lagging areas of developing nations, remote from globalizations many benefits. And poverty and high mortality persist among the world’s bottom billion, trapped without access to global markets, even as others grow more prosperous and live ever longer lives. Concern for these three intersecting billions often comes with the prescription that growth must be spatially balanced. This report has a different message: economic growth will be unbalanced. To try to spread it out is to discourage it to fight prosperity, not poverty. But development can still be inclusive, even for people who start their lives distant from dense economic activity. For growth to be rapid and shared, governments must promote economic integration, the pivotal concept, as this report argues, in the policy debates on urbanization, territorial development, and regional integration. Instead, all three debates overemphasize place-based interventions. Reshaping Economic Geography reframes these debates to include all the instruments of integration spatially blind institutions, spatially connective infrastructure, and spatially targeted interventions. By calibrating the blend of these instruments, today’s developers can reshape their economic geography. If they do this well, their growth will still be unbalanced, but their development will be inclusive.Publication Impact Evaluation in Practice, Second Edition(Washington, DC: Inter-American Development Bank and World Bank, 2016-09-13)The second edition of the Impact Evaluation in Practice handbook is a comprehensive and accessible introduction to impact evaluation for policy makers and development practitioners. First published in 2011, it has been used widely across the development and academic communities. The book incorporates real-world examples to present practical guidelines for designing and implementing impact evaluations. Readers will gain an understanding of impact evaluations and the best ways to use them to design evidence-based policies and programs. The updated version covers the newest techniques for evaluating programs and includes state-of-the-art implementation advice, as well as an expanded set of examples and case studies that draw on recent development challenges. It also includes new material on research ethics and partnerships to conduct impact evaluation. The handbook is divided into four sections: Part One discusses what to evaluate and why; Part Two presents the main impact evaluation methods; Part Three addresses how to manage impact evaluations; Part Four reviews impact evaluation sampling and data collection. Case studies illustrate different applications of impact evaluations. The book links to complementary instructional material available online, including an applied case as well as questions and answers. The updated second edition will be a valuable resource for the international development community, universities, and policy makers looking to build better evidence around what works in development.