From little acorns….

World Bank study hails progress on emissions trading “One of the key lynchpins in combating climate change.” That’s how the World Bank views the global carbon finance market, where industrialised countries can trade carbon credits arising from emissions reduction projects in the developing world. Between January and early June this year, according to a new report from its business unit, 64 million tonnes of CO2 ‘savings’ in developing country projects were traded on the market. That’s already nearly three quarters of the total volume of trading in 2003. What’s more, when the EU’s emissions trading scheme gets going in January, the study says, it will provide a major boost to the stability of the whole carbon trading concept, as “the largest single allowance market in the world”. The unit’s carbon finance manager Ken Newcombe is worried, however, that “the clock is ticking” for the development of future projects, because they can take up to seven years to become operational. So anything that can deliver by 2012 needs to be up and running pretty soon, and “this problem is made worse by the fact that there are no international commitments to reduce emissions beyond 2012”. * Meanwhile, the Bank has turned down an internal report’s recommendation that it should halt investment in fossil fuel projects by 2008. Produced by a working group chaired by former Indonesian environment minister Emil Salim, Striking a Better Balance was widely welcomed by environmental groups [see ‘Crash or Cure’ in this issue’s supplement].

7 July 2004