COLOGNE, May 10, 2006 - Amid the excitement generated by a record carbon market valued in $10 billion dollars in 2005, and an increased participation of developing countries in carbon trading, governments, private sector operators and experts expressed concern about the lack of clear signals about market continuity after 2012, when both the Kyoto Protocol and the European Union Pilot Emissions Trading Scheme (EU ETS) are set to expire.
Welcoming the more than 600 participants during the opening plenary session of the Conference, Warren Evans, Environment Director at the World Bank emphasized the record participation of developing countries representatives “for us this is a very positive development because climate change is not only a global environmental issue but is becoming a critical development issue.”
Jochen Witt, President and CEO of the German Conference and Trade Fair organizer Koelnmesse, said “the number of exhibitors is an indication of the dynamic nature and tremendous potential of the climate protection market, and emissions reductions in particular. With 187 suppliers from 50 countries, this event has once again strongly expanded and is now bigger than ever before.’’
Andrei Marcu, CEO and President of the International Emissions Trading Association (IETA) announced that following on the success of Carbon EXPO 2006, a regional Conference and Trade Fair will be organized this year in China. The regional event will take place in late October 2006.
According to Halldor Thorgeirseen, Deputy Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC) “the success of the Clean Development Mechanism (CDM) is in large measure due to the role played by developing countries. 78 developing countries have established national authorities to develop carbon friendly projects.”
Thorgeirseen added that “limits on emissions contributed to the deployment of new climate friendly technologies. He cited carbon capture and sequestration as an emblematic technology gaining more support. He reported on a new dialogue being developed at UNFCCC based on initiatives taken by developing countries on deforestation. “It is clear” –he said –“some of the proponents are looking at the carbon market to provide the incentives for conserving forests.”
Robert Watson, Chief Scientist, World Bank warned, “actions taken today will not only affect our generation but generations to come. We already see changing climate patterns and we need to move towards a lower carbon economy.”
He explained that in a recently launched document on “Clean Energy and Development” prepared by the World Bank and endorsed by Finance and Development Ministers at its Spring Meetings, the incremental costs of moving towards lower carbon production technologies and to adapt to climate variability and change were estimated in tens of billions of dollars per year.
“We need to invest in new technologies and be pragmatic; renewable energy needs to be expanded but it is urgent to deal with fossil fuels and especially to invest in carbon efficient production and use in the sectors of energy and transportation”.
Voluntary actions, grant facilities to buy down the cost of new technologies in developing countries and trade could be some of the mechanisms to move this clean energy agenda forward, according to the expert.
Morgens Peter Carl, Director General of Environment at the European Commission (EC), called for “a significant carbon emissions cut after 2012. But we in the European Union cannot do this alone. We need to involve other global emitters.”
He praised the EU ETS, in spite of recent volatility of the price of the allowances in the European market. “The EU ETS is changing the mindset of companies, because they are taking advantage of the system.”
Market volatility was triggered by the release of data on carbon emissions reduction from some European countries, but Carl emphasized that “only when we receive the data from all EU countries will we have a clear picture.” He underlined that in other newly created “cap and trade” markets volatility is a normal feature.
With regards to post 2012 scenarios at the global level, Carl emphasized that “we cannot take a post 2012 architecture as a given but we will advocate for a continuation of market mechanisms and we will have our own lessons of the EU ETS to review.”
He advocated for long term plans, more transparency, clear regulations and the avoidance of inter- European distortions. He proposed “a greater participation of developing countries in a post 2012 arrangement” and explained, “The CDM could be the link for developing countries to participate in an expanded EU ETS”.
Carbon EXPO represents a unique platform for knowledge sharing and business development for governments, experts and business from industrialized and developing countries.