Developing Carbon Markets Post 2012

This isn’t reference 2012 because of the Mayan apocalypse but because that is when the clean development mechanisms of the Kyoto Protocol will have to be reestablished. This was an interesting presentation given from numerous carbon certification programs and carbon economists. It was mostly assessing how effective the Clean Development Mechanism CDM was from Kyoto and how much we should continue it:

Gold Standard- One of the current NGOs certifying carbon credits which primarily looks at renewable energy, additionality, sustainable development, and can provide third party audits. One of their biggest challenges was getting carbon markets set up in the third world where they need to train people to monitor and measure carbon, and set up programs.

Scaling up the CDM- Another of the speakers focused on some of the major issues with the CDM and the ways it has failed. The biggest concerns were:

1) Who has the incentives to set robust baselines for carbon to compare with

2) How much are emissions actually being reduced, fake carbon credits

3) Risks with price uncertainty in carbon

Governance Challenges- This speaker’s argument (I was bad and forgot to write down everyone’s name and organization) was that domestic markets must be connected in effective ways and we much set up carbon markets from both the top down and bottom up. Linking should occur when markets have similar price caps, ex post adjustments, borrowing, continuity, and absolute vs relative caps. Some of the biggest challenges are market integration and convergence, environmental performance and integrity, and market efficiency and integrity

World Trade Organization as a Model- A women from the WTO also presented on how the WTO could serve as a model for linking markets. Her main points were any systems developed must have agreement on essential design schemes from all parties, it must guarantee environmental effectiveness, it must have way to deal with parties changing their markets, and it must have dispute mechanisms between parties.

-One final question that was brought up near the end was where we should continue thinking of carbon as a commodity or if we should treat carbon as a currency.