In the Media
World Bank sees carbon finance role for years
January 27, 2012
The World Bank’s carbon finance initiatives will likely be needed for at least five years, as the United Nations struggles to create a self-sufficient, international carbon market, the manager of the bank’s carbon finance unit told Reuters.
Negotiators at December’s U.N. climate talks in South Africa agreed to extend the 1997 Kyoto Protocol – the only global pact enforcing carbon cuts on developed nations – for at least five years beyond its first commitment period at the end of 2012.
But the uncertainty over how Kyoto’s existing market-based mechanisms should or could be included in a future pact that includes all major emitters means the World Bank is years away from ending its development role for carbon finance.
To make matters worse, benchmark prices of CDM carbon credits are trading near a record low of under 4 euros a tonne – well below the cost of generating CDM offsets from projects using technologies such as landfill gas, wind and biomass. Prices collapsed because of a supply-demand imbalance, as there was a record number of CDM credits issued last year in the face of a sharp fall in demand.
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Keywords: CDM, COP, emissions, finance, financing, Kyoto, world bank