Isra-Mart srl: World Bank provides push for carbon trading in emerging markets

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The World Bank provided initial grants to eight countries to help them establish their own carbon trading schemes as part of helping emerging economies establish market-based mechanisms for mitigating climate change.

Fifteen emerging economies are being allotted funds that they can use for devising their emission trading schemes, or other market-based mitigation designs. For now, Chile, China, Colombia, Costa Rica, Indonesia, Mexico, Thailand and Turkey will each get $350,000.

The Partnership for Market Readiness fund is intended to boost technical assistance for the collective innovation and piloting of market-based instruments for greenhouse gas emissions reduction.

Support will specifically go to "readiness" aspects, including shoring up data collection and management, establishing baselines, creating and strengthening domestic measurement, reporting and verification systems, and focusing on policy analysis and the development of a regulatory framework.

Each of the eight recipient countries must now create a “Market Readiness Proposal” that will detail the plans for their scheme.

The partnership, launched at the Cancun climate talks in December 2010, is targeting a total capitalization of $100 million before yearend.

As of now, the fund has reached an estimated $70 million from contribution from Australia, the European Commission, Germany, Japan, the Netherlands, Norway, Spain, Switzerland, the United Kingdom and the United States.

“Over the past two days here in Barcelona, more than 30 countries have been meeting to talk about new initiatives in emerging economies with regard to market-based instruments,” said World Bank special envoy for climate change Andrew Steer.

So far, China is gradually establishing a market system for carbon emissions trading that will help it achieve lower emissions in proportion to economic growth, or what it calls “carbon intensity.”

“The initial plan is to establish carbon emissions trading schemes in some pilot regions, and try to establish a unified national system in 2015,” said Wang Shu of the National Development and Reform Commission.

Mexico is reportedly interested in developing a registry that would incorporate different carbon offset markets in one centralized system.

“This will help add quality and transparency to the carbon offsets being sold, independent of the market being utilized,” said Jose Antonio Urteaga from Mexico’s Ministry of Environment and Climate Change.