Thursday, January 21, 2010

According to the Forest Carbon Markets 2009 report uncertainty is high but the market is growing

The State of the Forest Carbon Markets 2009 report was released with the conclusion that "At the end of 2009, the market for forest carbon stands in an uncertain position on the verge of potentially enormous growth".

As ClimateBiz reports, "State of the Forest Carbon Markets 2009: Taking Root & Branching Out," is based on research involving more than 100 market participants whose work encompasses 230 projects that have generated credits in 40 countries for over 20 years.

The report is explaining how the current uncertainty on the REDD and the U.S. regulation fronts generate both risks and opportunities for investors interested in forest-based carbon credits:

Already countries have committed politically in international negotiations to reducing emissions from deforestation and degradation (REDD) and several have also committed financing. At the same time, the Clean Energy Jobs and American Power Act awaiting it’s fate in the United States’ Senate explicitly calls for domestic forestry offsets and includes financing for REDD.

It is not possible to say what shape US climate regulation will take – or what sort of global
mechanisms for funding REDD will emerge from current international negotiations. Amidst this scene of opportunity and risk, investors are still eyeing forest carbon, though many are waiting on more definite regulatory signals before taking a financial leap. Even without market certainty, infrastructure and measurement tools continue to mature rapidly. Such tools, along with years of lessons learned accumulated, will inevitably serve as the foundation for forest carbon finance in years to come.

Regardless of this uncertainty, the forest carbon market grew from $7.6 million in 2006 to $37.1 in 2008 (after a $40.5 million record in 2008). The report said the forest carbon market was worth $21 million in the first half of 2009.

This is a very interesting and important report and you can find it at

Raz @ Eco-Libris

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