Published: June 2, 2011
CDM and ETS needed to fight climate change, says World Bank.
The World Bank claims there is “a lot to be gloomy about” in the carbon markets, but believes their long-term role in helping to fight the effects of climate change is crucial.
Speaking at the Carbon Expo conference in Barcelona, attended by EMEA Finance, World bank special envoy Andrew Steer said the world now is heading for a three to four-degree rise in temperature, far beyond its two-degree target.
“There will come a time not long from now when citizens will demand stronger action on climate change and our negotiators will need to finally deliver,” Steer said. “It is important that we are ready.”
This will not be easy. Steer admitted that there is “a lot to be gloomy about”: a lack of demand led to the clean development mechanism (CDM) offset market falling by 46% in 2010 to US$1.5bn, a fifth of its value in 2007. Add fraud in the emission trading scheme (ETS) last year, he said, and “confidence in the post-2012 environment is low”.
But there are grounds for optimism. Steer believes carbon markets lower the cost of fighting climate change, making solutions easier to find. The World Bank is also supporting entrepreneurship to develop new technologies, making “success much more likely”.