Panel Resources: State of Emerging Voluntary Markets

May 2, 2009
By admin

There are many fundamental questions about the the state of the current voluntary carbon markets such as transaction volumes, credit prices, project types, locations, and themotivations of buyers in this market.  Over the past several years, these markets havenot only become an opportunity for citizen consumer action, but also an alternativesource of carbon finance and an incubator for carbon market innovation.There are many fundamental questions about the the state of the current voluntary carbon markets such as transaction volumes, credit prices, project types, locations, and themotivations of buyers in this market.  Over the past several years, these markets havenot only become an opportunity for citizen consumer action, but also an alternativesource of carbon finance and an incubator for carbon market innovation.

As the voluntary carbon markets have rapidly gained traction, the answers, to these questionshave become increasingly important to investors, policymakers, and environmentalistsalike. For example, since the last edition of this report, we have seen various U.S. climate bills make reference to voluntary carbon offset standards, the Japanesegovernment launch a voluntary carbon-offsetting scheme, and the U.K. governmentissue an official definition of “carbon neutral.”

Proving the legitimacy of carbon offset projects remains a major issue in themarketplace, leading to a so-called “flight to quality.”  Last year saw further establishmentand greater functionality of voluntary offset standards; the emergence of new registries; the forging of new partnerships between infrastructure providers; the formation ofcoalitions to encourage self-regulation; and increased market transparency.

At the same time, existing and potential voluntary market consumers became more sophisticated asliterature and education around offset quality increased. All of this points to a furthermaturation of the market in 2008. However, simultaneously, the voluntary carbon markets, like any other commodity market, were not immune to the over-arching forcesof the economy and regulatory developments.

To read the full State of the Voluntary Carbon Markets report, click here

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