Beruflich Dokumente
Kultur Dokumente
John Drexhage Director, Climate Change and Energy International Institute for Sustainable Development
Carbon Trading:
Agriculture and Carbon Management Workshop February 11, 2003 Winnipeg, Manitoba
Overview
Key Characteristics of a Carbon Market
Unique Challenges
Strategies for Risk Minimization Influence of the International Negotiations
Unique challenges
Measurement Permanence
Ownership
What if the land manager is different from the land owner? Is soil a public good or a private good?
Timeliness of Credits
Bankability
The ability of credit generators to bank credits for use in future years.
Future Liability
What happens if an emissions cap is put on the agricultural sector?
Risk Minimization
May be achieved through:
Government Purchase
Options Contracts
Pay for the option of buying or selling credits in the future
Canadas System
The market system put in place by Canada is likely to be influence by decisions made in relation to the use of sinks within the Clean Development Mechanism (CDM)
Temporary Credits
Proposed by Columbia (2000) and the EU (2002) The EU Approach:
Issue a temporary credit when have verified a carbon stock increase of 1 t of CO2 Temporary credit expires at the end of five years or the Commitment Period, which ever is earlier The temporary credit may be retired by (e.g.) Canada to meet its Kyoto Protocol target In the next Commitment Period Canada would compensate for the temporary credit through the purchase of another credit When the credit expires, the original seller can re-verify and have a new temporary credit issued (again for a maximum of five years)
Insurance
Provide insurance against the risk of carbon credits losing their value due to the loss of the sink. Proposed by Canada (2002)
Sellers can purchase insurance for replacement of the sink or the credits Seller can self-insure by keeping credits in reserve.
Conclusions
There are a number of uncertainties and risk associated with the carbon market at present.
These will be reduced as a credible marketing system is put in place