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State and Trends of the Carbon Market 2011

Author

Listed:
  • Nicholas Linacre
  • Alexandre Kossoy
  • Philippe Ambrosi

Abstract

After five consecutive years of robust growth, the total value of the global carbon market stalled at $142 billion. Suffering from the lack of post-2012 regulatory clarity, the value of the primary Clean Development Mechanism (CDM) market fell by double-digits for the third year in a row, ending lower than it was in 2005, the first year of the Kyoto protocol. The Assigned Amount Unit (AAU) and the United States Regional Greenhouse Gas Initiative (RGGI) markets shrank as well. As these segments declined, the dominance of the European Union Allowances (EUAs) market became more pronounced than ever and the share of the carbon market primarily driven by the EU Emissions Trading Scheme (EU ETS) rose to 97 percent, dwarfing the remaining segments of the market. The carbon market growth halted at a particularly inopportune time: 2010 proved to be the hottest on record, while emission levels continued their seemingly inexorable rise. In the end, however, the year may be remembered most for the political opportunities that arose, yet were ultimately failed to materialize in the United States, Japan, Australia, and the Republic of Korea. While the international regulatory environment remains uncertain, national and local initiatives have noticeably picked up and may offer the potential to collectively overcome the international regulatory gap. These initiatives signal that, one way or another, solutions that address the climate challenge will emerge.

Suggested Citation

  • Nicholas Linacre & Alexandre Kossoy & Philippe Ambrosi, "undated". "State and Trends of the Carbon Market 2011," World Bank Other Operational Studies 13400, The World Bank.
  • Handle: RePEc:wbk:wboper:13400
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    Cited by:

    1. Maier, Sebastian & Oliveira, Luciano Basto, 2014. "Economic feasibility of energy recovery from solid waste in the light of Brazil׳s waste policy: The case of Rio de Janeiro," Renewable and Sustainable Energy Reviews, Elsevier, vol. 35(C), pages 484-498.
    2. Medina, Vicente & Pardo, Ángel & Pascual, Roberto, 2014. "The timeline of trading frictions in the European carbon market," Energy Economics, Elsevier, vol. 42(C), pages 378-394.
    3. Cacho, Oscar J. & Milne, Sarah & Gonzalez, Ricardo & Tacconi, Luca, 2014. "Benefits and costs of deforestation by smallholders: Implications for forest conservation and climate policy," Ecological Economics, Elsevier, vol. 107(C), pages 321-332.
    4. Koop, Gary & Tole, Lise, 2013. "Modeling the relationship between European carbon permits and certified emission reductions," Journal of Empirical Finance, Elsevier, vol. 24(C), pages 166-181.
    5. Jones, Carol Adaire & Nickerson, Cynthia J. & Heisey, Paul W., 2012. "New Uses of Old Tools: An Assessment of Current and Potential Agricultural Greenhouse Gas Mitigation with Sector-based Policies," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124735, Agricultural and Applied Economics Association.
    6. Gbenga Ibikunle & Andros Gregoriou & Naresh R. Pandit, 2013. "Price Discovery and Trading after Hours: New Evidence from the World's Largest Carbon Exchange," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(3), pages 421-445, November.
    7. Tracey L. Crowe, 2013. "The potential of the CDM to deliver pro-poor benefits," Climate Policy, Taylor & Francis Journals, vol. 13(1), pages 58-79, January.
    8. Calel, Raphael, 2011. "Climate change and carbon markets: a panoramic history," LSE Research Online Documents on Economics 37397, London School of Economics and Political Science, LSE Library.
    9. Mohajan, Haradhan, 2012. "Certainty and Uncertainty in Cap and Trade System or in Carbon Tax for Green Accounting to Decrease Greenhouse gas Emissions," MPRA Paper 50669, University Library of Munich, Germany, revised 20 Dec 2012.
    10. Kate Ervine, 2014. "Diminishing Returns: Carbon Market Crisis and the Future of Market-Dependent Climate Change Finance," New Political Economy, Taylor & Francis Journals, vol. 19(5), pages 723-747, September.
    11. Jinshan Zhu, 2014. "Assessing China's discriminative tax on Clean Development Mechanism projects. Does China's tax have so many functions?," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 57(3), pages 447-466, March.
    12. Balderas Torres, Arturo & MacMillan, Douglas C. & Skutsch, Margaret & Lovett, Jon C., 2015. "Reprint of ‘Yes-in-my-backyard’: Spatial differences in the valuation of forest services and local co-benefits for carbon markets in México," Ecological Economics, Elsevier, vol. 117(C), pages 283-294.
    13. Zhi-Fu Mi & Yue-Jun Zhang, 2011. "Estimating the 'value at risk' of EUA futures prices based on the extreme value theory," International Journal of Global Energy Issues, Inderscience Enterprises Ltd, vol. 35(2/3/4), pages 145-157.
    14. Ziegler, Andreas & Schwarzkopf, Julia & Hoffmann, Volker H., 2012. "Stated versus revealed knowledge: Determinants of offsetting CO2 emissions from fuel consumption in vehicle use," Energy Policy, Elsevier, vol. 40(C), pages 422-431.
    15. Balderas Torres, Arturo & MacMillan, Douglas C. & Skutsch, Margaret & Lovett, Jon C., 2015. "‘Yes-in-my-backyard’: Spatial differences in the valuation of forest services and local co-benefits for carbon markets in México," Ecological Economics, Elsevier, vol. 109(C), pages 130-141.
    16. Simon Bisore & Walter Hecq, 2012. "Regulated (CDM) and voluntary carbon offset schemes as carbon offset markets: competition or complementarity?," Working Papers CEB 12-016, ULB -- Universite Libre de Bruxelles.
    17. Jinshan Zhu & Hui Yao & Yingkai Tang & Liyong Wang, 2015. "An econometric analysis of sub-national Clean Development Mechanism performance in China," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1137-1153, October.
    18. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.
    19. Hieronymi, Philipp & Schüller, David, 2015. "The Clean-Development Mechanism, stochastic permit prices and energy investments," Energy Economics, Elsevier, vol. 47(C), pages 25-36.

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