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State and trends of the regulated A/R market. Side Event on Developments on Afforestation and Reforestation in the Kyoto Protocol Till Neeff Carbon Expo at Cologne, 03 May 2007. Obstacles to market success of forestry CDM are overcome. Forestry CDM was a niche market in 2006.
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State and trends of the regulated A/R market Side Event on Developments on Afforestation and Reforestation in the Kyoto Protocol Till Neeff Carbon Expo at Cologne, 03 May 2007
Buyers start defining preferences • Most buyers do not have clearly defined policies yet • Regional preferences • “Green” projects preferred • Added value by quality standards
Price indications still limited • Factors influencing prices: • Project risk and risk-management • Where in the cycle? • Replacement obligation • The World Bank has paid ca. US$ 4 per t CO2-e (until 2017) • Standard forestry CDM credits must be cheaper
What needs to happen to make forestry CDM a success on the markets? • Limited market volume • Use by the EU governments, Japan and Canada, voluntary users • Use of forestry credits is capped to 5% of 1990 emissions (before 2012) • Forestry CDM has comparative advantages • Particular socio-economic and environmental co-benefits • Low-cost compliance hedging • Factors influencing markets success of forestry CDM • Will Kyoto markets be short or long? • Compliance strategies are yet to be defined • Innovative concepts by users and traders
Markets for carbon credits from forestry CDM Till Neeff (Senior Consultant) till@ecosecurities.com +44 1865 202 635