Carbon Trust warns of offset threats to carbon markets; Union of Concerned Scientists says REDD will undercut ETS by 33%
On the eve of the Poznan UNFCCC Conference of Parties, even pro-market and cautious expert groups are starting to sound alarm bells about the possible impacts of cheap ‘offsets’ on existing carbon markets.
The widely respected and UK government-backed London-based Carbon Trust, which provides advice on carbon reductions to industry and governmental agencies, has warned that carbon offsets could swamp the European Emissions Trading Scheme, with “strong implications” for the price of carbon (see full article below).
Whilst the Carbon Trust’s concerns appear mostly to be related to cheap CDM credits, the problems that they highlight would be even worse with the introduction of REDD credits into the ETS.
The Union of Concerned Scientists (UCS) – also strongly pro-trading and a dominant organisation in the NGO Climate Action Network – will shortly publish a report showing that forest-based carbon credits could be sold for one-third less than current ETS credits. Contradictorily, the UCS simultaneously argues that this would not depress the price of carbon, though it fails to provide any convincing arguments as to why this would be so.
Meanwhile, in the real world, the price of ETS credits has again tumbled. Fears are already growing that, even without the depressive price impact of forest credits, this will lead to a “stunting” of funding for renewable energies and other clean technologies.
Carbon offsets could swamp EU carbon price
Tue Nov 25, 2008 12:12pm EST
LONDON (Reuters) – A ballooning global supply of carbon offsets could flood the European Union’s emissions market and dent prices, according to a report to be published next month by Britain’s Carbon Trust.
EU member states, lawmakers and the EU executive Commission are in negotiations now to revamp the bloc’s emissions trading scheme (ETS) from 2013-2020, and face a mid-December deadline.
Full article available here.