Urgent action needed to save UN carbon market
Value of carbon credits from UN's Clean Development Mechanism falls by 95 per cent in five years to around as new chair urges rejuvenation
The new chair of the United Nations carbon market governing panel has warned that urgent action is needed to get it back on track.
Hugh Sealy, an environmental scientist from Barbados, took over as head of the Clean Development Mechanism Executive Board last week and labelled the Mechanism a “fantastic tool” in need of rejuvenation.
More than 7,400 projects in 94 countries have been registered for the Clean Development Mechanism (CDM) and more than 1.4 billion Certified Emission Reduction (CER) carbon offset credits have been issued under the scheme.
CDM credits can be used by governments and businesses to meet carbon targets, and since its launch it has generated more than US$315 billion in climate finance.
But recent investment has fallen sharply, largely due to a lack of new ambitious climate policies.
In January, 10 new projects were submitted, compared to a peak of 319 in April 2012.
There has been an alarming surplus of credits on the markets as a result, and the value of the carbon credits the CDM generates has fallen by 95 per cent in the past five years to around US$0.55.
In an attempt to drive up interest, the UN invited countries to control their greenhouse gas emissions using the CDM at the November UNFCCC COP19 conference in Warsaw, Poland.
It has also encouraged the private sector and Non Governmental Organisations (NGOs) aiming to offset their emissions to use the CDM as part of their social responsibility strategies.
