April 2015 - The carbon markets have been brought almost to a standstill. Lack of demand coupled with uncertainty regarding the role the markets will play in a new climate change regime render many of the carbon reduction projects already underway unviable.
In efforts to secure the climate change contribution these projects are expected to make, institutional buyers are rising to the fore. This issue of Carbon Market Review looks at two initiatives designed to support projects at risk. The first sees the Norwegian government buying certificates from projects whose threatened status it measures using specific criteria (see the article entitled Buyers Counter Crisis). In the second, the World Bank focuses on methane reduction projects and is set to hold an auction in June backed by funding from donors in Europe and the US (see World Bank announces selection criteria for CER auctions towards the back of the magazine).
While these activities can in no way remedy the market crisis, they highlight industrialised countries’ interest in the use of market-based instruments in combating climate change. Whether that interest can be transferred to the new climate change agreement will be revealed at the end of the year.