The article in the first url below demonstrates the size of the market for carbon credits:
http://sg.wsj.net/public/resources/images/P1-AL151A_carbo_20080411191616.gif
It also demonstrates the market’s fragile nature and the potential for abuse:
“The United Nations is the main global policeman in an effort by wealthy nations to reduce the impact of their own pollution by paying for cleanups in the developing world. The program, known as the Clean Development Mechanism, is one of the most important coordinated efforts to attack global warming. In recent months, however, U.N. regulators who administer the program have objected to dozens of these developing-world projects, ranging from hydroelectric plants to wind farms, questioning whether the projects would produce a real environmental payoff.”
The article in the second url below profiles the fate of the largest of the agencies/auditors that identify and certify projects, EcoSecurities. Following certification, the projects are then submitted to the UN for final approval under the scheme. Following UN approval, then the agencies can begin trading the credits:
“EcoSecurities Ltd., helps companies in the industrialized world meet their obligations to pollute less by selling them "credits" that fund clean-air projects in poorer nations. Last year, some $9.4 billion in these credits were traded, up from almost none four years earlier.”
The articles report that during the early years of the scheme, set-up following the Kyoto Protocol, UN oversight was lax and agencies like EcoSecurities were allowed to submit projects that had not been properly vetted. Now, however, the UN is moving to improve its oversight and tighten the overall system of approval:
“EcoSecurities' rise coincided with a permissive U.N. board. In 2004 and 2005, the board automatically approved 95% of the projects proposed to it, according to U.N. statistics. … Last year, the U.N. board gave automatic approval to only 57% of proposed projects, down from 95% in 2004 and 2005. Overall, it rejected 9% of proposed projects last year, more than double its rejection rate in 2006.”
Take care
Dave
Bill Werther & David Chandler
Strategic Corporate Social Responsibility
(c) Sage Publications, 2006
U.N. Effort To Curtail Emissions In Turmoil
By Jeffrey Ball
1463 words
12 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120796372237309757.html
Up In Smoke: Two Carbon-Market Millionaires Take a Hit as U.N. Clamps Down --- EcoSecurities Sees Shares Slide 70%; 'In the Gray Zone'
By Jeffrey Ball
2317 words
14 April 2008
The Wall Street Journal
A1
http://online.wsj.com/article/SB120813542203111705.html
