Download sectiong lobal carbon credit markets – issues and opportunities

SECTION GLOBAL CARBON CREDIT MARKETS –
ISSUES AND OPPORTUNITIES
04
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CHAPTER
By Kelley Gale, Partner of the Finance Department in the San Diego office of Latham & Watkins LLP,
David Langer, Counsel of the firm’s Environment, Land & Resources (ELR) Department in the New York
office and Ryan Waterman, an Associate of the ELR Department in the firm’s San Diego office
Introduction
In September 2007, the New York Times reported that greenhouse gas (GHG) emissions trading
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held the potential to become the world’s largest commodity market. This projection followed a
May 2007 World Bank announcement that the global market for carbon dioxide (CO2) emissions
credits had doubled in 2006 to US$30.1bn, of which the World Bank attributed US$24.4bn to
the European Union Emissions Trading System (EU ETS), and US$5.3bn to the Kyoto Protocol’s
Clean Development Mechanism (CDM) programme and US$141m to its Joint Implementation
(JI) programme.2 This 2006 figure did not include the developing private market for GHG offsets
(which the New York Times estimated at US$54m and growing in the US in 2007), or other
state-sponsored programmes.3
The growth of the global GHG emissions markets has spawned a dizzying array of credits,
markets and trading mechanisms. Overlaying these markets are a similarly complex set of
international, regional, national and local laws and regulations addressing various aspects of
the global climate change problem. While the sheer size of the potential market suggests that
there are significant financial opportunities, it is far less clear what role traditional project
finance can play in this arena. In addition to typical underwriting criteria, as a general rule,
projects that are amenable to the project finance model are ones that involve the careful
allocation of most regulatory risks to creditworthy parties other than the project lenders.
Despite the difficulties that would face a project financing that is aimed exclusively at the GHG
emissions market, they are a real, significant and growing economic force that will have an
impact on project finance transactions.
For example, the outcome of the December 2007 United Nations convention in Bali, Indonesia,
while largely inconclusive, suggests that this market will continue to grow. While the structure
of the future GHG emissions market will depend upon the efforts of a working group charged
with the task of designing a “shared vision for long-term cooperative action” to reduce GHG
emissions it is probable that emissions trading will be part of the proposed solution.
This chapter considers global GHG emissions markets, from the cap-and-trade mechanisms
prescribed by the Kyoto Protocol and employed by the EU ETS, to the nascent regional cap-andtrade markets and the voluntary approaches being developed in the US. It reviews how these
markets operate and how they may develop going forward. It then considers key considerations
for project finance transactions that will be affected by such markets.
What is a carbon credit?
The term carbon credit is a generic term often used interchangeably to describe at least two
different commodities: GHG allowances and offsets. Allowances, established by and susceptible
to trade within a cap-and-trade GHG reduction programme (such as the EU ETS), are required in
order for a source to emit GHGs. In contrast, a GHG offset is a tradeable emissions reduction
credit created by individual sources when they reduce their GHG emissions (such as the CDM
4
programme created through the implementation of the Kyoto Protocol). However, both
allowances and offsets are designed to accomplish the same end – to convert the right to emit
GHG emissions into a tradable commodity in order to take advantage of market efficiencies.
1 James Kanter, ‘Banks Urging US to Adopt Trading of Emissions’, New York Times, 26 September 2007.
2 Global Carbon Market Doubled in 2006, Driven by EU Trading, World Bank Says, BNA Daily Environment Report, 4 May 2007, A-7.
3 Louise Story, ‘FTC Asks If Carbon Offset Money Is Well Spent’, New York Times, 9 January 2008.
4 Because CO2 is the most frequently occurring GHG, emissions credits are often popularly known as carbon credits.
However, there are many other GHGs of concern that are even more potent than CO2 (even though they may be
emitted in lower quantities). Notably, emissions trading programmes vary. Some allow trading only in CO2, while
others permit trading in the right to emit other GHGs or allow the generation of CO2 credits through reduction in ‘CO2
equivalent’ reductions of other GHGs.
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Kyoto Protocol-derived systems
Under the Kyoto Protocol, 37 developed countries and the EU (the Annex I countries) are
required to reduce their total GHG emissions by 5.2% below 1990 levels. The Kyoto Protocol
came into force in 2005 and applies through 2012. The vast majority of the carbon credits that
have been traded to date relate in some manner to implementation of the Kyoto Protocol in
participating nations.
European Union Emissions Trading System
One of the most well-established carbon markets is the EU ETS. This system, designed to
achieve the EU’s collective Kyoto commitment, relies upon a cap-and-trade programme for CO2
emissions from specified sectors. Member states submit National Allocation Plans (NAPs) to the
European Commission for approval in advance of each ETS trading period, which fix both the
total CO2 emissions allowances for distribution and allocations made to each covered
installation. Phase 1 of the EU ETS ran from 2005-2007, and Phase 2 runs from 2008 to 2012.
Under Kyoto, each EU member is responsible for allocating a portion of its commitment cap to
affected sources in the form of EU emission allowances (EUAs).5 Affected sources need to hold
allowances equal to their annual CO2 emissions or obtain additional allowances from other
sources. Sources that emit less than their allocation can sell their excess EUAs. Trading in EUAs,
as reflected on the European Carbon Exchange (ECX), has shown a steady increase in volume.
Average daily volumes during December 2007 were 89% higher than in December 2006, and the
ECX annual volume in 2007 of 1,037,821,000 tons was 128% ahead of 2006.6 Since its launch in
April 2005, close to 1.3bn tons of CO2 have been traded on the ECX, with an underlying market
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value €24bn/US$35.1bn.
As of this writing, the EU is considering several significant proposals that would expand the EU
ETS. In December 2007, the Council of the EU proposed integration of the aviation industry
into the EU ETS in 2012, by capping emission allowances at the mean average of annual
aviation emissions in the period 2004-2006. A more stringent proposal was advanced by the
European Parliament in November 2007. Attempts are now in progress to reconcile the
proposals. In addition, the EU has proposed a tariff on goods imported from countries, such as
the US, that have not committed to mandatory GHG reductions.
Clean Development Mechanism
Annex I countries can use the CDM under Article 12 of the Kyoto Protocol to offset emissions in
the six covered GHGs by investing in emission reduction projects in developing (or non-Annex I)
nations. The Certified Emission Reductions (CERs) generated by CDM projects can be
transferred to reduce the source’s, or the Annex I country’s, emissions in order to comply with
its Kyoto commitments.
After a slow start, the number of CDM projects has increased rapidly. The primary market in
CERs (in which future credits for a specific project are sold) grew dramatically in the first half
of 2007, exceeding the 2006 market value (€4.1/US$6.03bn against €3.9/US$5.74bn), and more
than doubling its 2005 value.
In 2006 and early 2007, the market expanded to include a substantial number of secondary
transactions of CER portfolios (in which CERs are resold or traded after the primary project
deal, usually after CERs are realised), and contracting began for CERs to be issued after 2012, a
time period for which emissions targets have yet to be set.
Secondary CERs were worth around €17.00/US$25.02 at the time of this writing, versus
€7.00/US$10.30 to €13.00-15.00/US$19.13 in primary trades, and approximately €23.00/US$33.85
for EUAs exchangeable in the EU ETS. Spot trades and the secondary market are expected to
continue to grow, with prices gradually increasing and the spread between EUAs and secondary
CERs narrowing.
Almost 95m CERs have been issued to date, with more than 2,600 projects at varying stages of
approval and development. Most of the purchases of CERs have been made by European private
sector, primarily from the UK, although some non-Annex I countries have participated.
5 A portion of each EU member’s Kyoto commitment may be allocated to sectors not subject to the ETS.
6 European Carbon Market, Market Update (December 2007).
7 http://www.europeanclimateexchange.com/default_flash.asp (last visited 14 January 2008).
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Among non-Annex I countries participating in the CDM process, the most active have been in
the Asian market, primarily India and China, with Latin America a distant third. Two industries
in particular – production of HCFC-22 (used as CFC refrigerant replacement and feedstock for
PTFE (Teflon)), and adipic acid (feedstock for nylon-66) – represent nearly 55% of CERs,
compared to just less than 21% for renewable energy and energy efficiency transactions
combined. This is because a byproduct of HCFC-22 production is HFC-23 which has a global
warming potential of 11,700 times that of CO2, and a byproduct of adipic acid production is
nitrous oxide (N2O) which has a global warming potential 310 times that of CO2. Accordingly,
projects that reduce these emissions have the potential to acquire significant credits.
Interstate emissions trading
Under the Kyoto Protocol, former Eastern Bloc nations like Poland, Hungary, and the Ukraine
received GHG allocations in excess of actual emissions in order to accommodate their rapidly
growing economies. This Green Investment Scheme (GIS) allows these states to trade their
excess allowances to other Annex I countries struggling to make their emissions targets.
In December 2007, Hungary and Japan signed a memorandum of understanding for Japan to
buy surplus allowances from Hungary under the GIS. Japan is also in talks with Poland, the
Czech Republic, and Ukraine to enter into similar deals, and plans to buy 100m tons of credits
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between 2008 and 2012.
The outcome of the December 2007 United Nations conference on climate change in Bali,
Indonesia, suggests that global GHG markets will continue to develop. The Bali Action Plan
generally expressed the parties’ commitment to cooperative action on climate change, and
specifically identifies “measurable, reportable and verifiable nationally appropriate mitigation
commitments” and the use of markets to enhance cost-effectiveness of mitigation efforts. The
parties established an ad hoc working group to design, by 2009, a shared vision for long-term
cooperative action, both before and after the Kyoto Protocol terminates in 2012. The parties
also indicated their support for the continued development of the CDM process and voted to
include forest conservation in future discussions regarding the post-2012 climate change
programme.
While the Bali meeting provides some basis for optimism for the future of the GHG emissions
markets, it stopped well short of reaching agreement on a post-Kyoto market. Thus, there is
remaining uncertainty on the structure of future markets after 2012 if they continue to exist at
all.
Developing mandatory GHG emissions markets around the
world
In 2009, the 10 signatory northeastern states of the Regional Greenhouse Gas Initiative (RGGI)
(including Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New
Jersey, New York, Rhode Island and Vermont) will begin the first cap-and-trade programme to
reduce CO2 emissions in the US. RGGI will cap CO2 emissions from fossil fuel power plants of
25MW in generating capacity or larger. Between 2015 and 2018, the cap will be reduced by 2.5%
every year, reducing CO2 emissions by 10% below 2000 levels by 2019.
The RGGI states agreed that at least 25% of the CO2 allowances will be allocated in a way that
benefits consumers and supports strategic energy investment, most likely to be accomplished
through some type of auction. Several states have declared that they will auction 100% of the CO2
allowances (including Maine, Massachusetts, and New York), and many other states are seriously
considering a similar format. The first CO2 allowance auctions are planned for June 2008.
In addition to CO2 allowances, electric generators will be allowed to offset 3.3% of their
emissions through five approved offset methods, including landfill gas capture, eliminating
sulphur hexafluoride leaks, tree planting (afforestation), reduced methane emissions from
manure, and energy efficiency measures in buildings.
Not to be outdone, in August 2007 the participants in the Western Regional Climate Action
Initiative (WCI) (Arizona, California, New Mexico, Oregon, Utah, and Washington, as well as the
Canadian provinces of British Colombia and Manitoba) established their goal to reduce
aggregate greenhouse gas emissions by 15% below 2005 emission levels by 2020.
8 Japan, Hungary Sign Accord on CO2 Credits Transfer, Planet Ark, 12 December 2007, available at
http://www.planetark.org/avantgo/dailynewsstory.cfm?newsid=46122 (last visited 18 January 2008).
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Details on how the WCI plans to achieve these reductions through a regional market-based
multi-sector mechanism, such as a load-based cap-and-trade programme, to achieve the regional
GHG reduction goal are expected in August 2008.9
Early attempts are being made to interconnect these developing US markets with the EU ETS.
In October 2007, US states in the RGGI and WCI regional programmes combined with two
Canadian provinces, nine EU countries, the European Commission, New Zealand, and Norway
to form the International Carbon Action Partnership (ICAP). ICAP will verify emissions sources
and amounts, and create an international GHG emission market. Although this effort is still in
its infancy, more details are expected in 2008.
In November 2007, nine Midwestern governors (from Illinois, Indiana, Iowa, Kansas, Michigan,
Minnesota, Ohio, South Dakota, and Wisconsin), along with the premier of the Canadian
province of Manitoba, entered into the Midwestern Greenhouse Gas Accord (MGA).10 The MGA
will establish GHG reduction targets, track GHG emissions through The Climate Registry,
develop a market-based and multi-sector cap-and-trade system to achieve such targets, and to
develop other “associated mechanisms and policies as needed to achieve the [GHG] reduction
targets, such as a low-carbon fuel standard and regional incentives and funding.”11 Although
implementation of the MGA is still in its initial stages, the parties expect for it to be fully
operational by 2010.
In December 2007, the New Zealand government proposed a New Zealand Emissions Trading
System (NZ ETS), which would create a market covering all sectors and GHGs. The NZ ETS
theoretically could be linked to other emissions trading systems, like the EU ETS. This
legislation remains in New Zealand parliament at this time.
Many commentators anticipate the passage of US federal legislation regulating GHG emissions
in 2009, after the US presidential contest is over and a new administration has taken office. The
shape of this legislation is still being debated, but will certainly be informed by the success of
the regional markets being created by state partnerships in the interim.
Voluntary markets
Chicago Climate Exchange
Started in 2003, the Chicago Climate Exchange (CCX) provides a voluntary but contractuallybinding market for reducing six GHG emissions. CCX members make commitments to meet
GHG emission reduction targets on an annual basis. Members that reduce emissions below their
yearly targets create surplus allowances that can be banked or traded on the CCX. Members
that emit above targets must purchase CCX Carbon Financial Instruments (CFIs, which
represent 100 metric tons of CO2 equivalent GHGs). CFIs can be either CCX allowances (issued
to each member in the amount of the target cap in any given year), or CCX offsets, which can
be created through qualifying offset projects.
For the CCX offsets, CCX has a verification programme in order to guarantee transparency,
rigor, and integrity. Standardised rules have been adopted for eight types of emission reduction
projects (agricultural methane; coal mine methane; landfill methane; agricultural soil carbon;
rangeland soil carbon management; forestry; renewable energy; ozone depleting substance
destruction). Other offset projects, including energy efficiency and fuel switching, can be
approved on a case-by-case basis. . Approved third-party offset verifiers independently assess
and verify an offset project’s capacity to reduce current GHG emissions. CDM offsets (CERs) can
be used as CCX offsets so long as they are not double-counted in another trading system.
In its most recent report (November 2007), the CCX reported that trading volume in November
surpassed 2.49m metric tons of CO2 equivalent greenhouse gas, with 34.9m metric tons of CO2
equivalent GHG traded in the history of the programme.12
9 Western Regional Climate Action Initiative, Memorandum of Understanding (26 February 2007).
10 Midwestern Governors Association, Press Release, ‘Governors Sign Energy Security and Climate Stewardship Platform
and Greenhouse Gas Accord’ (15 November 2007) (Indiana, Ohio, and South Dakota signed the MGA as observers).
11 Midwestern Governors Association, Midwestern Greenhouse Gas Accord (15 November 2007), at 4.
12 CCX Market Report, vol. iv, no. 11 (November 2007).
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Unregulated US market for GHG offsets
Numerous entities now offer consumers the opportunity to offset their CO2 emissions. As noted
above, the New York Times valued this market at US$54m and growing in 2007. For example,
TerraPass and CarbonFund.org are just two of the organisations that allow individuals,
organisations, and businesses to buy offsets, which are created through various means,
including reforestation efforts, energy efficiency investments, renewable energy investments,
and landfill gas and manure gas capture among others.
California Air Resources Board
In October 2007, the California Air Resources Board (CARB) adopted the forestry protocols
created by the California Climate Action Registry (CCAR) to verify the creation of voluntary CO2
offsets through forestry practices. The forestry protocols are the first voluntary GHG emission
protocols adopted by CARB pursuant to the California Global Warming Solutions Act of 2006
(also known as AB 32), which requires the state to reduce its GHG emissions to 1990 levels by
2020.
By adopting the forestry protocols, CARB sends a positive signal to any actors considering
voluntary forestry projects to offset CO2 emissions. At this stage, it is unclear whether CO2
offsets generated by such voluntary action will be available to comply with the GHG reductions
to be required when AB 32 is fully implemented in 2012. However, companies are already using
the forestry protocols to offset their CO2 emissions for new projects. For example, in September
2007 the ConocoPhillips Company agreed to fund a US$2.8m dollar forestry project designed to
offset approximately 1.5m metric tons of CO2 emissions from its Clean Fuels Expansion Project
in California as a condition to settling pending litigation brought by the California Attorney
General.13
The Climate Group’s Voluntary Carbon Standard
In November 2007, a group of industry, non-profit, and emissions market specialists (including
non-profit The Climate Group, the International Emissions Trading Association, and the World
Business Council for Sustainable Development) introduced a Voluntary Carbon Standard (VCS)
for use in certifying GHG offsets traded in voluntary carbon markets, such as those traded in
the US. The VCS is designed to address the need for certification that GHG offsets are real,
measurable, and create permanent emissions reductions that can be independently verified.
Japan’s voluntary emissions plan
Japan is in the midst of a voluntary domestic cap-and-trade test programme involving
approximately 150 companies, 31 of which have conducted trades in the system. The Ministry
of the Economy has reported that from April 2006 to August 2007, companies reduced GHG
emissions by as much as 29% compared to the 2002–04 period. Recently, Japan announced that
it is exploring a new mandatory GHG trading programme to replace the current voluntary
programme.
How project finance transactions are affected by emerging GHG emissions
markets
While the global carbon market will create some opportunities, it is more likely that
participants in project finance matters will see the GHG emissions markets more as a
transaction component than a central transaction driver. Several obvious and some less obvious
observations can be made based on the limited available market experience.
Issues
Carbon credits as regulatory requirements
At this point carbon credits appear to function more like an environmental regulatory
requirement than as a quantifiable future income stream. Projects will face regulatory risk as a
result of current and future climate change-related regulations directly through additional
emission control costs or indirectly as suppliers of energy, raw materials, or parts pass along
their own increasing regulatory costs. The role played by GHG allowance and offset
requirements, whether imposed through the EU ETS, RGGI or in specific cases, such as the
recent ConocoPhillips settlement (discussed above), is more analogous to a permit requirement
than a future income stream. Even if a carbon tax is used instead of a market-based trading
programme, projects will continue to face additional risks. For example, a carbon tax could
dramatically increase a project’s energy costs if the local electric power grid depends heavily on
13 Settlement Agreement between ConocoPhillips Company and California Attorney General Edmund A. Brown (10
September 2007), at 3.
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fossil fuels. Projects that are more carbon-efficient will have a competitive advantage over other
similar projects and will provide a better economic risk profile. In fact, financing entities have
begun to incorporate climate change risks into their project evaluations. On 4 February 2008,
Citigroup, JPMorgan Chase, and Morgan Stanley jointly issued ‘The Carbon Principles’, a set of
guidelines to be used in financing power plant projects. Anticipating federal GHG regulation,
the Principles call for an enhanced diligence process to evaluate and account for the potential
risks associated with high-GHG emitting projects. While it is too soon to determine the
practical impact of the Principles, they will certainly bring additional scrutiny to traditional
coal-fired power projects.
Carbon credits generating project income
Although carbon credits do not play a large role in project finance at this time, some projects
(e.g. CDM projects) may realise income through generation and sale of offsets. While the
revenue may not always be significant, it is still a potential economic value that could be ‘left
on the table’ if the market opportunities are not evaluated and addressed in the early stages of
project development. Project documents will need to address how the income (or losses) from
the carbon credits will be allocated among the parties. For example, will the credits become
part of the project’s collateral package? Will the sale of credits be restricted by loan covenants?
How will the value of the credits be included for purposes of calculating compliance with
applicable financial standards under the financing agreements? What mechanisms will be
employed to mitigate the risk that credits will lose value, either due to regulatory changes,
noncompliance with regulatory obligations, or market price fluctuation?
Although the CDM market is still very much in a nascent stage, the experience to date
highlights several regulatory and economic issues that increase the level of risk for project
finance connected to the GHG emissions markets.
0The relatively short five-year life-span of the Kyoto Protocol (2008 to 2012) and the uncertainty
regarding the post-2012 regime, has effectively limited the CDM market to projects that offer
large volumes of GHG emission reductions at relatively low risk. Such low-hanging fruit would be
expected to be the obvious preference. However, the uncertainty regarding the future of the GHG
markets could inhibit projects that have longer lead times or less certain financial rewards.
0The process for registering CDM projects and certifying CERs is a complex and time-consuming
task, requiring approvals from the host government’s Designated National Authority, as well as
certification by a Designated Operating Entity (DOE) responsible for validating the project and
verifying emission reductions. As a result, the projects that have dominated the CDM market have
generally been from countries (such as China, India, and Brazil) with large carbon footprints and a
more stable economic and regulatory regime. Less stable or less well-developed governmental
structures will increase the risk that offset revenues will not materialise.
0Recent criticism has been directed at the credibility of the emission reductions obtained
through the CDM process. Prices for CERs are effectively set by the EU market and can be much
higher than the cost of the underlying emission reductions. This magnifies the incentive for CDM
project developers to overstate emission reductions or to take credit for illusory emission
reductions (e.g., by increasing production to inflate the emission baselines). Increased scrutiny of
the CDM certification process could result in higher levels of enforcement activity that, in turn,
may reduce the value of some CERs , if not decertifying them entirely.
0Regulatory uncertainty under the CDM programme is magnified by the need for projects to
comply with sustainability and additionality standards that are, at best, vaguely defined.
Additionality presents a particularly difficult problem for CDM certification because the project
must demonstrate that it is actually creating additional GHG emission reductions, i.e., that the
emission reductions would not have occurred if the opportunity to generate and sell CERs was not
available. Because of the current uncertainty regarding the revenue from carbon credits, projects
that are financeable will generally need an alternate revenue stream to support the financing.
However, if such an alternate revenue stream exists, the project may not be ‘additional’ because it
has economic value independent from the carbon market. Arguably, such projects could have
been financed and constructed without the existence of the CDM process.
Opportunities
Targeted investment sources to fund new projects
Outside of the traditional project finance model, alternative funding sources are being
developed to support CDM projects and other clean technology or renewable energy projects.
Specialised investment funds, equity investment funds developed by banks with expertise in
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development of renewable projects, and venture capital groups appear to be providing more
financial backing to such projects. The World Bank has recently announced a new Carbon Asset
Development Fund specifically geared toward development of greenhouse gas emission
reduction projects. These funds may also create opportunities to pool both investments and
sources of carbon offsets such that the regulatory and economic risks involved can be shared. In
addition to investment funding, many jurisdictions offer tax breaks for renewable energy
projects or are requiring private investment through mandatory renewable energy portfolio
14
standards. This indirect funding can be combined with more traditional project financing
mechanisms to facilitate development of projects that might otherwise present unacceptable
economic risk profiles to the lending community.
New project types
Another effect of the developing GHG emissions markets is the advent of new types of
investment projects, like carbon sequestration, afforestation, and the return to long-dormant
projects, such as nuclear power. Both the EU and the US have begun testing carbon
sequestration technology, which is expected to hold great promise for GHG emission reductions
from the electric power industry.
In addition, there is renewed interest in nuclear power development. In January 2008 the UK
invited proposals for new nuclear facilities as part of its strategy for developing a secure,
diverse, reduced-carbon intensity energy portfolio. In September 2007, the US Nuclear
Regulatory Commission received its first complete licence application to be filed in 30 years
The Commission expects to receive approximately 20 more licence applications by April 2009.
Discussions at the Bali conference also raised the possibility that CO2 offsets may, in the future,
become available not only through the creation of new forests (i.e. afforestation or
reforestation) but also through the prevention of deforestation. Tropical rainforest deforestation
is estimated to contribute 20% of annual GHG emissions. Although currently only a topic for
future discussion, CO2 offsets from prevention of rainforest deforestation could have a market
value of US$15bn per year.15 In conjunction with the Bali conference, Norwegian prime
minister Jens Stoltenberg announced that Norway would invest approximately
NKr3bn/€375m/US$548m per year to conserve forests in developing countries.
Conclusion
The lack of clearly defined and stable regulatory programmes to govern the carbon markets
will continue to present challenges for traditional project finance deals, which rely on stable
and relatively predictable economic risks. At present, the complexity and evolutionary nature of
the market mechanisms can make it difficult to assess and mitigate the risks associated with
projects connected to the markets. However, the large economic value and momentum of the
markets suggest that there will be investment opportunities and substantial benefits to be
gained in this arena
14 For example, as part of its climate change policy, the European Commission has set an objective of 20%, renewable
energy in the EU energy mix by 2020. Many US states also have renewable energy portfolio standards.
15 Alan Zarembo, ‘Paying Other Nations to Be Green’, Los Angeles Times, 12 December 2007.
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