A Brief Study of Voluntary Carbon Markets, Recent and Future Trends with Special Focus on India
47 Pages Posted: 21 Feb 2009
Date Written: July 15, 2008
For several decades widespread concern has surfaced over the increase in disruptive anthropogenic processes and their role in radically altering the environment and ecosystems. With the advent of the Kyoto Protocol the world witnessed a dramatic intensification of interest in Climate Change Mitigation. Although this momentum was initially brought about to meet compliance targets, it soon gave way to private businesses, NGOs, investors and eventually individuals who took the initiative to change their prodigal ways. Parallel to the CDM projects market, runs another smaller yet burgeoning Voluntary Carbon Market. Not bound by the rigorous procedures and high transaction costs, the Voluntary Carbon Market empowers a wider variety of organizations and individuals to take part in the mitigation process and build a sustainable future.
Currently the Voluntary Carbon Market is estimated at $330 million, trading volumes of 65 million tonnes of CO2 with a growth rate of 240% in just one year. Experts predict this to grow exponentially to volumes of up to 1400 million tonnes of CO2 being traded by 2020. (Hamilton May 2008)
This report deals with issues pertaining to the Voluntary Carbon Market and its potential in the coming years. It discusses topics of additionality, validation and verification standards and registries. It also discusses recent trends and creates a price prediction model. It also seeks to answer how it will play a key role in a country like India. It analyzes the relationship between regulated and voluntary markets. Finally it analyzes the global scenario and how it will change with the growing focus on Climate Change.
1. Regulatory Market 2. Market Overview 3. Voluntary Market 3.1 Key Elements of Offset Transactions 3.1.1 Additionality 3.1.2 Baselines 3.1.3 Leakage 3.1.4 Permanence 3.1.5 Project Types 3.1.6 Offset Standards 3.1.7 Registries and Retirement 3.1.8 Spot and Future Contracts 4. Prices of the Future 4.1 Type of Project 4.2 Type of Seller 4.3 Location of Project 4.4 Type of Standard 5. The Indian Context 5.1 Carbon Disclosure Project 5.2 Future Regulatory vs. Future Voluntary
Keywords: carbon credits, voluntary carbon markets, carbon disclosure project, regulatory carbon market, CDM, VERs, voluntary emission reductions, Registries, carbon projects, CCX, gold standard, offsets
JEL Classification: C53, N55, Q2
Suggested Citation: Suggested Citation