BEIJING Sales of greenhouse gas credits will rise to more
than $3 billion this year from $2.7 billion in 2005 as developing countries
sell more credits to industrialized nations, the World Bank said Thursday.
The forecast is included in an annual report on
the carbon emissions market that was released by the World Bank at Carbon Expo
Asia, a trade fair being held in Beijing this week.
The 1997 Kyoto Protocol includes provisions for
companies in developed nations to buy credits from projects that reduce
emissions in developing economies, where cleaning up production processes is
cheaper. Those credits can be sold in carbon trading systems like that of the
European Union, thereby helping richer nations meet targets outlined by the
Kyoto accord.
"All the data show that the carbon market
is becoming a powerful financial force supporting clean development," the
author of the report, Karan Capoor, said in Beijing. "This year we've
seen the market's momentum maintain and continue."
Trading in credits and emission allowances will
double to $22 billion worldwide in 2006 from $11 billion in 2005, according to
the report.
China sold 60 percent of the developing world's
credits in the first nine months of this year, the report said, compared with
73 percent in the same period last year. The credits are derived from projects
that use renewable energy or take other steps to avoid emitting greenhouse
gases.
Uncertainty over how developing countries will
fund emission-reduction projects after 2012, when the terms of the Kyoto
accord expire, may slow growth in the market, Capoor said.
"It appears the market is looking at this
2012 deadline and bringing on fewer and fewer" projects, he said.
The Kyoto Protocol, signed by more than 80
nations and the European Union, requires the EU and 35 other industrialized
countries to reduce greenhouse gas emissions to an average of 5 percent below
1990 levels in the five years through 2012.
Countries like Japan and companies like BP are
seeking to buy credits for less than the cost of reducing greenhouse gas
output at home.
By 2050, industrialized nations will spend as
much as $100 billion a year on projects in developing countries as emerging
economies undertake more projects that reduce emissions by using clean energy
or manufacturing processes, the United Nations said last month.
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