Isra-Mart srl : Uncertainty puts paid to global carbon market growth

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The World Bank’s annual global carbon market review reveals that 2010 saw the end of five years robust growth, with the market falling slightly compared to 2009 to $142 billion.
The report puts the decline down to uncertainty over market conditions beyond 2012 and a lack of momentum behind efforts to set up cap-and-trade schemes around the world.
“The global carbon market is at a crossroads. If we take the wrong turn we risk losing billions of lower cost private investment and new technology solutions in developing countries,” says Andrew Steer, World Bank special envoy for climate change. “This report sends a message of the need to ensure a stronger, more robust carbon market with clear signals.”
The EU emissions trading system (ETS) remains the largest sector, with 84% of the market, and the report authors predict the virtually all future demand will be from European governments.
The report warns that the supply of carbon credits between 2013 and 2020 through existing projects will be sufficient to meet demand, leaving little incentive for developers to invest in additional projects.
“Carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest year on record, while global emission levels continued to rise relentlessly,” says Alexandre Kossoy, World Bank financial specialist.
He goes on, though, that national and local low-carbon initiatives are picking up in both developed and developing nations, offering the potential to overcome future uncertainties.