Asia in the vanguard of carbon trade
Saturday, 20 December 2008
Umesh Pandey
Asia has become the hotbed for clean development mechanism (CDM) projects that are playing an increasing role in helping the world come to grips with climate change.
To date about 65 per cent or 774 out of 1,186 CDM projects registered with the United Nations Framework Convention on Climate Change (UNFCCC) have originated in Asia. The pace shows no sign of slowing despite the current economic difficulties.
"Across Asia, nations are gearing up to tap into the growth opportunities," said Michael Dreyer, the vice-president for Asia-Pacific of Koelnmesse, which staged Carbon Forum Asia in Singapore last month.
"Australia is establishing its own trading scheme, Japan recently announced that it would introduce a voluntary carbon market, and in China (where 73 per cent of the CDM transactions took place), foreign investors are helping to speed up the installation of pollution-reduction technology by purchasing CER (carbon emission reduction) credits from the country's thriving carbon market."
The enthusiasm was evident at Carbon Forum Asia, which witnessed a fourfold increase from the previous event in the number of projects being offered by more than 60 developers.
World Bank figures show that the international emissions trading market last year was worth 47 billion. Asia accounting for about 80 per cent of the overall CER credits traded and China for nearly half of the Asian total. Asia's CDM market grew by nearly 200% in 2006 and 2007, the World Bank said.
This year's Carbon Forum Asia programme featured more than 1,000 participants from 60 countries and 100 exhibitors from 30 countries, including new participants Armenia, Bangladesh, Bhutan, Fiji, India, Indonesia, Ireland, Korea, Laos, Pakistan, China, and Thailand.
Thailand along with Laos, Pakistan, Indonesia and India joined the trade show for the first time, alongside heavyweights such as China and India.
Mr Dreyer says the current trade of CERs in Asia represents about 80 per cent of all preliminary CERs traded in the international market. China and India lead the pack with 640 CDM projects, while Indonesia, Malaysia and the Philippines are not too far behind.
"For a long time, the EU Emissions Trading Scheme (ETS) has dominated the global carbon market. This is set to change," said Henry Derwent, president and CEO of the International Emissions Trading Association (IETA).
"With Australia and New Zealand en route to establishing their own trading scheme, and with trading of one sort or another being proposed in Japan, Korea, Taiwan, parts of China and even India, Asia's prominence in the global carbon market is certain.
The Asian Development Bank (ADB) supports Carbon Forum Asia because it is "an excellent platform in Asia on which to showcase the Asian sellers in the CDM market", said Josh Carmody, an ADB manager.
"The predicted rate of growth in energy demand and greenhouse gas emissions (GHG) for the Asian region is staggering," he said.
Because the world depends on reducing emissions in Asia, particularly those associated with energy, the ADB is working with developing countries to build their capacities.
It has been looking to increase trading of CERs and CDMs in the region and has established various funds over the past few months to promote the goal.
"We see Carbon Forum Asia as an excellent way for ADB to help scale up the carbon market opportunities in the region," said Mr Carmody.
"We are sponsoring more than 60 of the projects that are present here and most are in the energy-related business," he said "But for greater success than what we see right now, what is needed is considerable support from the various governments to reduce emissions."
The ADB is now looking to establish a fund that would help countries in the region until 2020. It hopes to be able to finance as much as $2 billion worth of transactions in 2009 against $1.8 billion estimated this year.
But with the global markets going south, fears are that during the short term the prices of carbon credits may head down. In Japan, CER prices have fallen by 50 per cent over the past few months.
Fumio Hoshi, executive director of the Japan Bank for International Co-operation (JBIC) said that it too had been helping various companies to get carbon credits and at times even providing equity financing to them.
"Despite the hindrance caused by the financial crisis, we cannot take a step back and instead we have to look at ways to move forward on the path we are following," he said.
................................
The Bangkok Post
Asia has become the hotbed for clean development mechanism (CDM) projects that are playing an increasing role in helping the world come to grips with climate change.
To date about 65 per cent or 774 out of 1,186 CDM projects registered with the United Nations Framework Convention on Climate Change (UNFCCC) have originated in Asia. The pace shows no sign of slowing despite the current economic difficulties.
"Across Asia, nations are gearing up to tap into the growth opportunities," said Michael Dreyer, the vice-president for Asia-Pacific of Koelnmesse, which staged Carbon Forum Asia in Singapore last month.
"Australia is establishing its own trading scheme, Japan recently announced that it would introduce a voluntary carbon market, and in China (where 73 per cent of the CDM transactions took place), foreign investors are helping to speed up the installation of pollution-reduction technology by purchasing CER (carbon emission reduction) credits from the country's thriving carbon market."
The enthusiasm was evident at Carbon Forum Asia, which witnessed a fourfold increase from the previous event in the number of projects being offered by more than 60 developers.
World Bank figures show that the international emissions trading market last year was worth 47 billion. Asia accounting for about 80 per cent of the overall CER credits traded and China for nearly half of the Asian total. Asia's CDM market grew by nearly 200% in 2006 and 2007, the World Bank said.
This year's Carbon Forum Asia programme featured more than 1,000 participants from 60 countries and 100 exhibitors from 30 countries, including new participants Armenia, Bangladesh, Bhutan, Fiji, India, Indonesia, Ireland, Korea, Laos, Pakistan, China, and Thailand.
Thailand along with Laos, Pakistan, Indonesia and India joined the trade show for the first time, alongside heavyweights such as China and India.
Mr Dreyer says the current trade of CERs in Asia represents about 80 per cent of all preliminary CERs traded in the international market. China and India lead the pack with 640 CDM projects, while Indonesia, Malaysia and the Philippines are not too far behind.
"For a long time, the EU Emissions Trading Scheme (ETS) has dominated the global carbon market. This is set to change," said Henry Derwent, president and CEO of the International Emissions Trading Association (IETA).
"With Australia and New Zealand en route to establishing their own trading scheme, and with trading of one sort or another being proposed in Japan, Korea, Taiwan, parts of China and even India, Asia's prominence in the global carbon market is certain.
The Asian Development Bank (ADB) supports Carbon Forum Asia because it is "an excellent platform in Asia on which to showcase the Asian sellers in the CDM market", said Josh Carmody, an ADB manager.
"The predicted rate of growth in energy demand and greenhouse gas emissions (GHG) for the Asian region is staggering," he said.
Because the world depends on reducing emissions in Asia, particularly those associated with energy, the ADB is working with developing countries to build their capacities.
It has been looking to increase trading of CERs and CDMs in the region and has established various funds over the past few months to promote the goal.
"We see Carbon Forum Asia as an excellent way for ADB to help scale up the carbon market opportunities in the region," said Mr Carmody.
"We are sponsoring more than 60 of the projects that are present here and most are in the energy-related business," he said "But for greater success than what we see right now, what is needed is considerable support from the various governments to reduce emissions."
The ADB is now looking to establish a fund that would help countries in the region until 2020. It hopes to be able to finance as much as $2 billion worth of transactions in 2009 against $1.8 billion estimated this year.
But with the global markets going south, fears are that during the short term the prices of carbon credits may head down. In Japan, CER prices have fallen by 50 per cent over the past few months.
Fumio Hoshi, executive director of the Japan Bank for International Co-operation (JBIC) said that it too had been helping various companies to get carbon credits and at times even providing equity financing to them.
"Despite the hindrance caused by the financial crisis, we cannot take a step back and instead we have to look at ways to move forward on the path we are following," he said.
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The Bangkok Post