Publication: State and Trends of the Carbon Market 2003
Loading...
Date
2003-12-01
ISSN
Published
2003-12-01
Author(s)
Editor(s)
Abstract
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).
Link to Data Set
Citation
“Lecocq, Franck; Capoor, Karan. 2003. State and Trends of the Carbon Market 2003. © World Bank. http://hdl.handle.net/10986/13416 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Citations
Collections
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—2004(2005)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.Publication State and Trends of the Carbon Market 2006 : A Focus on Africa(World Bank, Washington, DC, 2006-11)Many African countries have thin energy and industrial sectors with limited opportunities to reduce carbon emissions, certainly relative to countries such as China and India. Carbon sequestration from avoided deforestation and from agriculture--potentially important areas for climate mitigation and important in many African economies--has been systematically excluded from the Clean Development Mechanism (CDM). At the same time, CDM-eligible assets from afforestation and reforestation are excluded from entry into the large European Union-Emissions Trading Scheme (EU ETS), substantially limiting their market value and potential share in the multi-billion dollar global carbon market. The Africa share of the CDM market is lower than the share of African countries to developing nations in Foreign Direct Investment (FDI) over the past few years, which has been around 10 percent.Publication State and Trends of the Carbon Market 2007(World Bank, Washington, DC, 2007-05)This report points out that there is a tendency to believe that the carbon market is somehow a magic bullet that will alone save the world from global warming. While the authors recognize the enormous strength and potential of the market to achieve results, it would be wise not to assume the market will provide a painless, magical way to mitigate climate change. First, the market does not set the level of a cap, policy-makers do. The market can only be a tool to help achieve that target. It cannot be a surrogate for a target and policy makes should not expect to be let off the hook from their jobs - making sensible policy. Second, policy makers need to set targets and support mechanisms that meet two massive challenges. They have the responsibility of taking into account the risks of climate change, especially on the poorest, as well as the opportunity of expanding clean development choices to meet the basic needs and aspirations of billions worldwide, many without access to electricity or clean water. Third, there is no free lunch. The exuberance of creating value - and enormous wealth - in a new market should not mask the fact that there are costs for mitigation. Fourth, the integrity of a market rests on the clarity and simplicity of its rules, the transparency of information and on institutions that guard against fraud and manipulation. Fifth, it is not fair to expect "cap-and-trade" or emissions trading to work in all sectors globally; clearly, housing and transport are sectors that do not lend themselves easily to an elegant emissions cap-and-trade approach. There may be other policies - including other market-based approaches or removal of subsidies - that may be more suitable in some contexts. Finally, a solution to urgent problem of the climate change problem will require sustained effort by all of us. Markets can, to a certain extent, accommodate the appetite that individuals and companies in Europe, Japan, North America, Australia and beyond have for carbon emission reductions that go well beyond what their law makers require of them. This high-potential voluntary segment, however, lacks a generally acceptable standard, which remains a significant reputation risk not only to its own prospects, but also to the rest of the market, including the segments of regulated emissions trading and project offsets.Publication State and Trends of the Carbon Market 2006 : Update, January 1-September 30, 2006(World Bank, Washington, DC, 2006-10)Carbon transactions are defined as purchase contracts or ERPAs (Emission Reductions Purchase Agreements) whereby one party pays another party in return for greenhouse gas (GHG) emissions reductions that the buyer can use to meet its compliance or corporate citizenship - objectives vis-a-vis GHG mitigation. Payment is made using one or more of the following forms: cash, equity, debt, or in-kind contributions. This paper includes the following headings: executive summary; methodology; allowance-based markets; project-based markets; investment climate and regulatory environment; and regulatory outlook.
Users also downloaded
Showing related downloaded files
Publication World Development Indicators 2010(World Bank, 2010-04-01)The 1998 edition of world development indicators initiated a series of annual reports on progress toward the International development goals. In the foreword then, World Bank President James D. Wolfensohn recognized that 'by reporting regularly and systematically on progress toward the targets the international community has set for itself, the author will focus attention on the task ahead and make those responsible for advancing the development agenda accountable for results.' The same vision inspired world leaders to commit themselves to the millennium development goals. On this, the 10th anniversary of the millennium declaration, world development indicators 2010 focuses on progress toward the millennium development goals and the challenges of meeting them.Publication Stolen Asset Recovery : A Good Practices Guide for Non-conviction Based Asset Forfeiture(World Bank, 2009)The guide is organized into three major parts: Part A first provides an overview of the problem of stolen assets and the problem of recovering the assets once they are transferred abroad. Second, it describes how the international community has taken steps to respond to the problem through United Nations Convention against Corruption (UNCAC) and the Stolen Asset Recovery (StAR) Initiative. UNCAC introduced a new framework to facilitate the tracing, freezing, seizing, forfeiture, and return of assets stolen through corrupt practices and hidden in foreign jurisdictions. The StAR Initiative developed an action plan to support the domestication and implementation of asset recovery provisions under UNCAC, to facilitate countries' efforts to recover stolen assets that have been hidden in foreign jurisdictions, and ultimately, to help deter such flows and eliminate safe havens for hiding corruption proceeds. Third and finally, Part A introduces non-conviction based (NCB) asset forfeiture as one of the critical tools to combat corruption, describing the situations when it is useful, how it differs from criminal forfeiture, its usefulness in civil and common law jurisdictions, and the support it has gained internationally. Part B contains the 36 key concepts. The concepts have been grouped together by topic area, including prime imperatives, definitions of assets and offenses subject to NCB asset forfeiture, measures for investigation and preservation of assets, procedural and evidentiary concepts, determining parties and ensuring proper notice, judgment proceedings, organizational considerations and asset management, and international cooperation and asset recovery. The concepts are illustrated through examples from cases and excerpts from different jurisdictions' NCB asset forfeiture legislation. Part C contains a number of special contributions written by individual practitioners. The contributions focus on the general practice of NCB asset forfeiture and international cooperation in specific jurisdictions, namely Colombia, Guernsey, Ireland, Kuwait, Switzerland, Thailand, and the United Kingdom. In addition, some contributions illustrate a selection of NCB asset forfeiture practices, such as asset management, delegating certain roles to the executive branch, and pursuing forfeiture based on illicit enrichment.Publication Commodity Markets Outlook, October 2024(Washington, DC: World Bank, 2024-10-29)Commodity prices are expected to decrease by 5 percent in 2025 and 2 percent in 2026. The projected declines are led by oil prices but tempered by price increases for natural gas and a stable outlook for metals and agricultural raw materials. The possibility of escalating conflict in the Middle East represents a substantial near-term upside risk to energy prices, with potential knock-on consequences for other commodities. However, over the forecast horizon, longer-term dynamics—including decelerating global oil demand, diversifying oil production, and ample oil supply capacity—suggest sizable downside risks to oil prices, especially if OPEC+ unwinds its latest production cuts. There are also dual risks to industrial commodity demand stemming from economic activity. On the one hand, concerted stimulus in China and above-trend growth in the United States could push commodity prices higher. On the other, weaker-than-anticipated global industrial activity could dampen them. Following several overlapping global shocks in the early 2020s, which drove parallel swings in commodity prices, commodity markets appear to be departing from a period of tight synchronization. A Special Focus analyzes commodity price synchronization over time and considers the relative importance across commodity cycles of a wide range of demand and supply shocks, including global demand shocks and shocks specific to different commodity markets. It concludes that, while supply shocks were the dominant commodity price driver in the early 2000s and around the global financial crisis, post-pandemic price movements have been more substantially shaped by commodity-specific shocks, such as those related to conflicts.Publication Macroeconomic and Fiscal Implications of Population Aging in Bulgaria(World Bank, Washington, DC, 2014-02)Bulgaria is in the midst of a serious demographic transition that will shrink its population at one of the highest rates in the world within the next few decades. This study analyzes the macroeconomic and fiscal implications of this demographic transition by using a long-term model, which integrates the demographic projections with social security, fiscal and real economy dimensions in a consistent manner. The simulations suggest that, even under fairly optimistic assumptions, Bulgaria's demographic transition will exert significant fiscal pressures and depress the economic growth in the medium and long term. However, the results also demonstrate that the Government of Bulgaria can play a significant role in mitigating some of these effects. Policies that induce higher labor force participation, promote productivity and technological improvement, and provide better education outcomes are found to counteract the negative consequences of the demographic shift.Publication Environmental Flows in Water Resources Policies, Plans, and Projects : Findings and Recommendations(World Bank, 2009)The overall goal of the analysis presented in this report is to advance the understanding and integration in operational terms of environmental water allocation into integrated water resources management. The specific objectives of this report are the following: 1) document the changing understanding of environmental flows, by both water resources practitioners and by environmental experts within the Bank and in borrowing countries; 2) draw lessons from experience in implementing environmental flows by the Bank, other international development organizations with experience in this area, and a small number of developed and developing countries; 3) develop an analytical framework to support more effective integration of environmental flow considerations for informing and guiding: (a) the planning, design, and operations decision making of water resources infrastructure projects; (b) the legal, policy, institutional, and capacity development related to environmental flows; and (c) restoration programs; and 4) provide recommendations for improvements in technical guidance to better incorporate environmental flow considerations into the preparation and implementation of lending operations.