Developing Dimension: State of the Voluntary Carbon Markets 2012

Executive Summary

A Report by Ecosystem Marketplace & Bloomberg New Energy Finance

State of the Voluntary Carbon Markets 2012: Developing Dimension is the sixth annual report created to shed light on trading volumes, credit prices, project types, locations, and the motivations of buyers voluntarily purchasing carbon offsets. Findings are based on data voluntary reported by 312 offset suppliers, seven exchanges, and all major registries.

In 2011, the voluntary carbon market again demonstrated its resiliency, as buyers in Europe upped their offset purchases even in the face of financial troubles – albeit at a lower price – and buyers in the US and emerging markets stepped in to make up the shortfall. Combined, they transacted the second-highest volume and value tracked in this report series – and the highest value ever attributed to the “over-the-counter” market – while broadening the dimensions of the voluntary market for offsets to capture new countries, project types and buyers.

Both economic factors and price competition led many European buyers to the relatively inexpensive market for offsets from Asian clean energy projects. Europeans that could afford to expand their search were also the largest supporter of projects in Latin America and Africa. Buyers in the US purchased more credits than companies in any other country, supporting domestic projects to sustain climate action in the absence of a federal cap-and-trade scheme. Buyers in developing countries purchased locally as they cut their teeth on the 2011 offset market – to “green” their end of a supply chain as exporters or to prepare for domestic GHG regulations.

New tools from third-party standards also gave life to the market’s development dimension. Standards’ focus on bringing scale to projects in developing countries led to record transactions of credits from Africa-based projects that aid public health, biodiversity protection and local employment – while projects that reduce emissions from deforestation and forest degradation (REDD) contributed most to overall market value. Registries kept an eye on these emerging markets, while managing record volumes of trades, new credits and credit retirement. In these and other ways, the market for voluntary carbon offsets deepened the dimensions of its contributions to corporate sustainability, climate and the local context.

Please download the full report for more detailed analysis.

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