As countries around the world struggle to reach an agreement on an extension of the Kyoto Protocol, the voluntary international carbon trading market is picking up steam.
The voluntary carbon market posted a 34 percent gain in 2010, trading a record 131 million tons of carbon dioxide equivalent (MtC02e). While the US accounted for the majority of trading activity, worth $424 million in total, market growth was strongest in developing countries.
The US remained the primary participant in voluntary carbon markets in 2010, offering more than one-third of carbon credits and purchasing nearly half of available credits. This is positive news for the US given that last year proved difficult for market participants: failure of the US federal government to act on climate change again contributed to the closure of the Chicago Climate Exchange (CCX) and smaller US markets. However, regional markets in California and the Western Climate Initiative withstood the pressure and gathered support from many US suppliers.
The news comes from a report by Forest Trends' Ecosystem Marketplace and Bloomberg New Energy Finance.
From the report:
Embracing the mantra of "what doesn't kill us makes us stronger," the market infrastructure turned recent years' political and economic unknowns to their advantage. Seeing that corporate and citizen consumers were willing and able to carry the climate action torch, standards began to trial approaches to scale up their "most wanted" locally-based projects. Registries built new partnerships, alliances, and even sub-national registries in an effort to share both the risks and rewards of shifting market dynamics. In these and many other ways, suppliers of market infrastructure and carbon credits looked back on recent lessons learned to plot a future market that they hope remains resilient to change.