An Overview of Carbon Transactions

This report provides selected background information to the current portfolio of carbon transactions. The study has a special focus on an analysis of the JI and CDM projects that have been submitted in this early stage of the development of a market in CO 2 credits. It aims at providing insight in the project portfolio with regard to technology and geographical distribution. With the usual disclaimer on remaining errors, the authors acknowledge the stimulating exchange of ideas with Remko Ybema and Alexander Gijsen. The ECN project number is 7.7513.03.01. Abstract Throughout the past years, the frontrunners in the field of carbon trading have started establishing their businesses. Some market actors took action towards achieving their emission targets under the Kyoto Protocol, such as the Dutch government, and others commenced establishing a market not for own use but for general market start-up purposes, such as the World Bank's Prototype Carbon Fund. Also smaller businesses started to explore the possibilities of trading in carbon credits in different fields. Several smaller voluntary initiatives are also reported, mainly aimed at individual consumer activities, households or small companies. Carbon accounting for emissions resulting of air travel or household energy use and individual transport is in place in both Europe and the United States. With an increased consciousness of organisations and the general public of the problems associated with greenhouse gas emissions, voluntary agreements like these may gain a significant market share. This report gives an overview of general preferences of technology, type of project and other characteristics of projects. Only projects approved by all parties involved are reviewed. It can be concluded that projects under CDM have a preference for large-scale hydro, gas capture and fuel switch projects, which each constitute almost 25% of the total CDM emission reductions. Latin America, in particular Costa Rica, Panama and Brazil, have managed to attract most investments. For Joint Implementation, in Eastern Europe, the countries Czech Republic, Poland and Romania dominate the list. The project type is more diverse here, and slightly biased towards energy efficiency-type projects. In total about 100 MtCO 2-eq is traded via project-based Kyoto mechanisms. Other emissions trading systems, on a country level or in a company, are briefly reviewed. Only a small fraction of the total greenhouse gas abatement potential for CDM and JI projects, which has been estimated to amount to some 4.400 MtCO 2-eq, has been realised so far. This picture …