Carbon finance literature review

1、Carbon finance literature reviewRoco Prez OchoaMSc Environmental TechnologyImperial College LondonCarbon finance literature reviewvoluntary marketsemission reduction projectssustainable development benefitsscientific and grey literatureFocus of this talk based on my MSc thesis:“How could philanthrop

2、y make the carbon markets work better for the poor?”Carbon finance literature review“CDM do not significantly contribute to sustainable development” Olsen (2007) 200+ papers reviewed project-based: checklists and multi-criteria assessments (e.g Gold Standard, MATA-CDM)Gold Standard is the only premi

3、um market in CDM, but victim of own success, can not cope with demand (49 projects in pipeline out of 3700, only one issued, 6 registered and 3 validated)systematic PDD-based: Olsen, Fenhann (2008) all CDMs in pipeline analysedEnergy distribution, Energy efficiency in housing, Solar, Methane from Ce

4、ment: best types for co-benefits, but LULUCF projects are virtually absent in CDM and should not be ruled-out.taxonomy could be used to establish International Sustainable Development standards, by the DNAs, by DOEs to validate and verify projects co-benefits (much needed!). But may add complexity t

5、o already complex and lengthy process How to measure CDM contribution to sustainable development?Carbon finance literature reviewSmall-scale (now 44% of projects in pipeline). New Bundling rules emerging.Programme of Activities (or programmatic CDM): up-scaling potential of small projects. 4 project

6、s in pipelinePremium markets demand: EU ETS considering imports of high quality CERs onlyGold Standard: Energy Efficiency and Renewables only, and can not process fast enoughSectorial approaches: e.g. wider scope for LULUCF (improved agriculture, REDD, soil)higher volumes of CERs could depress price

7、 if not accompanied with tighter caps, but could boost voluntary market supplyThe future of the CDMCarbon finance literature reviewvery small, very varied, longer track-record, innovative and versatile, mixed reputation, cheaper credits, but resembling the CDM more and moreThe buyers: businesses for

8、 operations carbon offsetting, carbon neutral products and for investments (70% of OTC market share in 2007)The types: LULUCF smaller share of market ever (18% of OTC volumes in 2007!)The locations: Africas market share 2% (similar to CDM), 50% in rich countries in 2007Certification: is becoming the

9、 norm (est. 87% - 53% OTC transactions used third-party verifiers)Size of the carbon market in 2007 (MtCO2e) Source: Capoor and Ambrosi, 2008 (World Bank) and Hamilton et al., 2008 (Ecosystem Market Place, New Carbon Finance)The Voluntary MarketCarbon finance literature reviewNameIncludes LULUCF?Env

10、. & Social Benefits FocusGold Standard for VERsNo, Renewable and Energy Efficiency onlyYesThe Climate, Community and Biodiversity Standard (CCBS)LULUCF onlyYesPlan VivoCommunity based agro-forestryYesSocial CarbonReforestation and avoided deforestationYesCarbonFix Standard (CFS)Sustainable Fores

11、tYesThe Voluntary Carbon Standard (VCS)Yes, some methodologies existNoNameIncludes LULUCF?Env. & Social Benefits FocusCDM/JILimited to A/RNoVER+ StandardCDM and JI methodologiesNoISO 14064/65 standardYesNoVoluntary Carbon Offset Standard (VOS)CDM and JI methodologiesNoChicago Climate Exchange (C

12、CX)YesNoThe Standards in the Voluntary Marketin green: 70% of OTC market share in 2007Carbon finance literature reviewToo many standards? Is consolidation of standards needed?split between land-based and non-land-basedsplit between carbon quality and development benefitsa two-tier approach? carbon q

13、uality standard supplemented with benefits standardsTransaction costs increasing: almost same lengthy process as CDM, only difference is UNFCCC Executive Board replaced with VCS or Gold Standard boardsGovernmental regulation or self-regulation? e.g DEFRA (CDM/JI) versus ICROA (CDM/JI, VCS, Gold Stan

14、dard). What happened to the Forestry-focused standards?The future of the Voluntary MarketCarbon finance literature reviewBayon, R., Hawn, A. and Hamilton, K (Eds) (2007) Voluntary carbon markets: An international business guide to what they are and how they work. Earthscan.Boyd et al. (2007) The Cle

15、an Development Mechanism: an assessment of current practice and future approaches for policy, Tyndall Centre for Climate Change Research UK.Capoor, K. and Ambrosi, P. (2008) State and Trends of the Carbon Market 2008, World Bank, Washington, DC.Chapple, A. (2008) Making the voluntary carbon market w

16、ork for the poor: current and future roles, Forum for the Future.Cosbey, A., Murphy, D. and Drexhage, J. (2007) Market mechanisms for sustainable development: How do they fit in the various post-2012 climate efforts?, International Institute for Sustainable Development, Winnipeg. DEFRA (2008b) Code

17、of Best Practice for Carbon Offset Providers: Accreditation requirements and procedures, February 2008. Available at Accessed 4th June 2008.Estrada, M., Corbera, E. and Brown, K. (2008) How do regulated and voluntary carbon-offset schemes compare?, Tyndall Centre for Climate Change Research UK.Ewing

18、, T. (2008) , The ENDS guide to Carbon Offsets 2008, ENDS.Hamilton, K. et al. (2007) Forging a Frontier: State of the Voluntary Carbon Markets 2008, Ecosystem Marketplace and New Energy Finance.Heuberger R et al. (2007) CDM projects under the Kyoto protocol: a methodology for sustainability assessme

19、nt - experiences from South Africa and Uruguay. Environmental Development and Sustainability 9: 33-48 Kollmuss, Zink and Polycarp ( 2008) Making sense of the Voluntary Carbon Market: A comparison of Carbon Offset Standards, WWF, Tricorna, and the Stockholm Environmental Institute.Merger, E. and Williams, A. (2008) Comparison of Carbon Offset Standards for Climate Forestation Projects participating in the Voluntary Carbon Market, University of Canterbury, Christchurch, New ZealandOlsen, K. H. (2007) The clean development mechanisms contribution to sustainable developme