State of the Voluntary Carbon Markets Report 2010
Report Finds the U.S. was largest buyer and seller of Credits In The $387 Million Voluntary
Carbon Markets in 2009
2009 was a
tumultuous year for the voluntary carbon markets, which saw
transactions equivalent to 94 million tons of carbon dioxide
emissions reductions, a 26% drop compared to 2008, according to the
fourth annual State of the Voluntary Carbon Market Report issued
today by Ecosystem Marketplace and Bloomberg New Energy
Finance.
The total value of traded credits declined 47% to US$387 million
in 2009 and the average price of an emission reduction was
$6.5/tCO2e.
Although the economic downturn reduced offset purchasing for
corporate social responsibility, the report notes significant
growth in the pre-compliance segment of the voluntary markets.
These are speculative credits bought in anticipation of a
cap-and-trade program in the U.S., which accounted for the greatest
market share of supply (56%) and demand (49%) of voluntary carbon
credits in 2009.
Forest Trends’ Ecosystem Marketplace Director and report
co-author Katherine Hamilton said; “Voluntary markets play a
critical role in market innovation, and they are becoming more
efficient and transparent as participants forge deeper connections
with each other. It is encouraging that even with the dual hit of
regulatory uncertainty and tightened budgets for offsetting in
2009, the industry has continued to evolve, forming linkages that
create a more efficient market infrastructure.”
Bloomberg New Energy Finance Director
and report co-author Milo Sjardin, said: “The economic recession
had a marked impact on the part of the market primarily concerned
with buying credits to offset emissions of companies and
individuals.”
In contrast, expectations of a possible U.S. carbon trading
program lifted the importance of the U.S., which figured as the
largest buyer and seller in the market, and the most popular
transactions were those that could count towards future compliance.
However, with the current state of play of U.S. politics this
situation is likely to be very different this year,” he added.
The survey found a near doubling in the use of independent,
third-party “registries,” which track ownership of offsets so that
individual emission reductions are not counted twice.
The survey identified 17 registries accounting for 51% of all
voluntary offset transactions last year, while just 29% of
transactions were listed with registries in 2008. The survey
attributes the growth in registry uptake largely to the emergence
of multiple registries spread across different regions, which issue
credits and track ownership.
The most popular project types were those that destroy methane -
a greenhouse gas that traps more than 20 times as much heat as
carbon dioxide.
These projects stand a good chance of being grandfathered into a
U.S. compliance scheme, and they accounted for 41% of voluntary
offset transactions in 2009. Forestry projects were next, at 24%,
followed by renewable energy projects, at 17%. The U.S. took the
lead from Asia this year as the source of the vast majority of
offset credits (56%), followed by Latin America (16%) and Asia
(12%).
This fourth annual “State of the Voluntary Carbon Markets”
report is designed to give a market-wide perspective on trading
volumes, credit prices, project types, locations, and the
motivations of buyers in this market. Findings are based on data
voluntarily reported by over 200 offset suppliers, as well as
exchanges and registries.
The report is made available to the public without charge with
support from Ecosystem Restoration Associates and Forest Carbon
Group and sponsors Baker & McKenzie, Sustainable Carbon,
Karbone, EcoSecurites, Orbeo, and Evolution Markets. For a copy of
the report, please visit
target=”_blank”>www.ecosystemmarketplace.com and
target=”_blank”>www.newenergyfinance.com.
Ecosystem Marketplace, a project of the non-profit organization
Forest Trends, is a leading source of information on environmental
markets and payments for ecosystem services.
