Global carbon market grows by 80%
Growing government interest in cutting carbon emissions has led to the rapid expansion of the global carbon market, according to the US-based Worldwatch Institute.The organisation's latest Vital Signs Update reveals that carbon trading reached an estimated value of $59.2bn in 2007 - an 80% growth from 2006.
The European Union's Emissions Trading Scheme is the largest carbon market to date, with a trading volume of more than 1bn tons of carbon dioxide a year, and is helping the EU meet its Kyoto targets at an annual cost of $4.3-$5.4bn, or less than 0.1% of GDP.
However, Worldwatch warned that the US government's inaction on carbon emissions threated to "mute" the efforts of countries that have ratified the Kyoto Protocol.
"Policymakers worldwide are recognising the true costs of carbon emissions for our economy and our environment," said Zoë Chafe, a Worldwatch research associate and author of the Update.
"These markets could not have taken off without strong policy leadership. But while many US states are taking action, the national government is falling notably behind by not setting a national cap on carbon emissions."
Voluntary markets are also showing strong growth. Market analysts Ecosystem Marketplace estimates that at least 23.7m tons of carbon was offset through voluntary markets in 2006.
The Chicago Climate Exchange, a voluntary market based in the US, reports that its trading volume doubled in 2007 to 22.9m tons.
It is vital that carbon credits are marketed and purchased with a clear understanding of what they represent, Ms Chafe said.
She added: "Carbon credits vary greatly in origin, quality and price - especially on the relatively unregulated voluntary market.
"Reputable certification systems exist to help buyers differentiate between comparable carbon credit and offset products.
"But the first step towards greening any business or personal practice should always be outright emissions reductions."
© Faversham House Ltd 2008. edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.