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Report on the health of the forest carbon markets

2013/11/21 17:18:41

At a glance :

Title: Covering New Ground: State of the Forest Carbon Markets 2013

Authors: Molly Peters-Stanley, Gloria Gonzalez, Daphne Yin

Publisher: Forest Trends’ Ecosystem Marketplace

Forest Trends’ Ecosystem Marketplace has released this year’s edition of the State of the Forest Carbon Markets. This is the fourth edition in the annual series, which, the Executive Summary tells us: “demonstrates throughout how practitioners, offset buyers, and the projects they support covered new ground in 2013 in the race to close the gap between what’s available and what’s required to keep economies and ecosystems in balance.”

Some of the key findings as summarized in the report are that:

The value of the market reached US$216 million in 2012.

Voluntary offset buyers drove 95% of all market activity (27 MtCO2e) and 92% of value ($198 million), as corporate buyers renewed or pursued new climate target.

The private sector remained the largest source of demand, responsible for 19.7 MtCO2e or 70% of market activity. Two out of every three offsets were sold to multinational corporations.

The forest carbon markets extended project development to 58 countries, up from 54 locations in 2011. North American projects generated one quarter of all offsets transacted, while project developers in the Global South transacted half of overall market share.

One of ForestsClimateChange.org’s roving reporters, Catriona Moss, attended the launch in London on November 8 and writes:

“The report suggests that despite uncertainties over the demand for future carbon credits, and a drop in the overall value of carbon in the compliance carbon market, corporate interest in carbon markets was increasing as companies recognize the importance of investing in forest ecosystem services to protect themselves against the future impacts of climate change and to improve their corporate social responsibility.”

She reports that a range of opinions were aired at the launch. Here’s a sample:

From Gloria Gonzalez, one of the report’s co-authors: “Forest carbon credits are speaking to companies that want to demonstrate leadership in their own industry, they want to be seen as the key leaders in terms of corporate social responsibility. They are the trendsetters in terms of purchasing offsets.”

 From Eric Bettelheim, CEO and Founder of Floresta Group: “We need a market with real demand, demand that is measurable, that is driven by large commercial players, and where there is a need to comply with the state. Until we have a strong compliance market, we will struggle to find a financing model that that is robust and consistent.”

From Alfred Evans, CEO of Climate Change Capital: “The carbon market has not collapsed. The prices have gone down but what that tells us is that the market is working. It is sending a signal that reflects supply and demand. The design of the market may need be addressed, but in terms of the market, it is still functional.”

Organized by China Green Carbon Foundation  

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