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FEATURE STORY

Carbon Expo Opens with Look at State of Carbon Market

May 30, 2012

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Joelle Chassard, manager of the carbon finance unit of the World Bank, Christiana Figueres, executive secretary of the United Nations Framework Convention on Climate Change, and Mary Barton-Dock, director of the climate policy and finance department of the World Bank, discuss the new State and Trends of the Carbon Market report at the Carbon Expo 2012.


STORY HIGHLIGHTS
  • The State and Trends of the Carbon Market 2012 report was launched at the Carbon Expo 2012 in Cologne, Germany
  • The report described that the carbon market grew in total value by 11% last year, to US$176 billion and transcation volumes reached a new high of 10.3 billion tons of carbon dioxide equivalent (CO2e)
  • Primary CERs (Certified Emission Reductions) have dropped to their lowest level since 2004

The ninth annual Carbon Expo opened in Cologne, Germany, on May 30 with a full house and rousing call to action from Christiana Figueres, the executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC).

Figueres thanked the audience for their continued interest in and support for the carbon market. Participation in today’s market is not for the faint of heart, she said. But, she added, using her favorite saying, there is no such thing as the impossible – it’s just a matter of attitude.

"We're into year four of international financial turmoil, and despite that, governments are persevering, slowly, but step by step, in evolving the climate regime to where we all know that it has to go. They're persevering basically because they and we know that there is no other option," Figueres said.


" We're into year four of international financial turmoil, and despite that, governments are persevering, slowly, but step by step, in evolving the climate regime to where we all know that it has to go. They're persevering basically because they and we know that there is no other option. "

Christiana Figueres

Executive Secretary, United Nations Framework Convention on Climate Change

Despite the general frustration with the pace of climate negotiations, Figueres saw as positive that an agenda was approved in meetings last week in Bonn to focus for the next four years on two steps in particular: creating a legally grounded, universal agreement to be approved by 2015 and to go into effect in 2020 and to start increasing ambition now.

The opening was preceded by the launch of the State and Trends of the Carbon Market 2012 report, which described a carbon market that grew in total value by 11% last year, to $176 billion, and where transaction volumes reached a new high of 10.3 billion tons of carbon dioxide equivalent (CO2e).

However, primary CERs (Certified Emission Reducations) – the focus of activities in developing countries – have dropped to their lowest level since 2004. This is linked to declining demand of offsets due to economic turbulence, a growing long-term oversupply of carbon offsets in the EU Emissions Trading Scheme and plummeting prices.

While the near-term outlook for the carbon market remains gloomy, Joëlle Chassard, manager of the World Bank’s Carbon Finance Unit, said there is light on the horizon in the development of new domestic and regional market mechanisms such as those that were approved in Australia, California, Quebec, Mexico, and South Korea.

In addition to the head of the UNFCCC, the mayor of Cologne welcomed the 1,800 participants to Carbon Expo, and the German State Secretary of Environment, Nature Conservation and Nuclear Safety promised the country’s support for the event and carbon markets going forward. These enthusiastic words promise a lively debate.

 


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