carbon en el mundo

1. Overview of Global Carbon Market
Presented by:
DANIEL MENDOZA

2. Presentation Outline
1. What is Carbon Financing?
2. Structure of Global Carbon Market
3. Carbon Market Relevant for Bangladesh
4. How Big is the Global Carbon Market?
5. Current Trends in the Carbon Market
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3. What is Carbon Financing?
 Carbon financing can be defined as financial resources provided to
projects generating (or expected to generate) green house gas emission
reductions in the form of the purchase of such emission reductions.
 In simple term, carbon finance is a purchase contracts whereby one
party pays another party in exchange for a given quantity of Green House
Gas (GHG) emission reductions.
Payment made in different Payment made in different f oforrmmss t oto a abbaatete G GHHGG
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EQUITY
DEBT/
SOFT LOAN
IN KIND
CONTRIBUTION FOR
TECHNOLOGIES
CASH

4. Global Warming Potential (GWP) of Key GHG
Green House Gas Global Warming Potential
Carbon dioxide (CO2 ) 1
Methane (CH4) 21
Nitrous Oxide (N2O) 310
HFC’s 140-11,700
Perflorocarbons (PFC’s) 7,000-9,200
Sulphur Hexafluoride (SF6) 23,900
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5. Industrialized
country
Emission
reduction
credits)
investment $$
Project Reducing
GHG emissions in
developing country
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6. Structure of the Global Carbon Market
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Compliance Markets
KKyyoottoo
MMaarrkkeettss
New South Wales
GHG Abatement
Scheme
EU ETS
Chicago
Climate
Exchange
UK
ETS
CDM ->
CERs
JI ->
ERUs
AAUs
+
RMUs
Voluntary
Markets
EUAs NGACs CCLAs VERs

7. Carbon Market
CCoommpplilaiannccee M Maarrkkeett VVoolulunntatarryy M Maarrkkeett
CER VER
Compliance markets generate and trade green
house gas emission reductions known as
Certified Emission Reductions (CERs) that are
regulated and directly initiated under the Kyoto
Protocol’s Clean Development Mechanism
(CDM).
Voluntary markets generate and trade
greenhouse gas emission reductions that are
not regulated or directly initiated by the Kyoto
Protocol and known as Verified Emission
Reductions or (VERs).
Certified Emission Reduction (CERs): Green
house gas reduction of any CDM project is
measured according to internationally agreed
methods and are quantified in standard units called
Certified Emission Reductions (CERs). These are
expressed in tons of carbon dioxide (CO2)
equivalents.
Verified Emission Reduction (VERs): Green
house gas reduction outside Kyoto Protocol is
measured according to internationally agreed
methods and are quantified in standard units called
Verified Emission Reductions (VERs). These are
also expressed in tons of carbon dioxide (CO2)
equivalents.

8. Investment Opportunity from
CDM/VER
0 50 100 150 200
Investment can
be obatined from
CDM
Investment can
be obatined from
CDM
Project Cost
Investment can be obatined from
CDM
Investment can be obatined from
CDM
Project Cost
maximum
minimum

9. Carbon Market at a Glance 2005-2007 and projected 2008
Annual Volumes and Values of Transactions
Type 2005 2006 2007 2008 (Projected)
Volume
(MTCo2e)
Value
(M US$)
Volume
(MT Co2e)
Value
(M US$)
Volume
(MT Co2e)
Value
(MUS$)
Volume
(MT Co2e)
Value
(MUS$)
Allowances
EU-ETS
New South
Wales
CCX
Uk-ETS
328 7971 1131 24620 2690 43000 3000 70,000
CDM
JI
Others
382 2894 508 5477 947 17000 1200 22,000
Total 710 10,864 1639 30,098 3637 60,000 4200 92,000
CDM 351 2638 475 5257 947 17000 1200 22000
Source: 2005-2006 World Bank and IETA; 2007 and 2008 Point Carbon (Press Release Feb 26, 2008)

10. Carbon Market at a Glance 2005-2007 and Projected 2008
100
Billion US $
10.864
2.638
30.098
5.257
60
17
92
22
90
80
70
60
50
40
30
20
10
0
2005 2006 2007 2008
Total Market
CDM Market
Source: 2005-2006 World Bank and IETA, May 2007 and 2008 Point Carbon (Press Relaese Feb 26, 2008)

11. Overview of the CDM market
• CDM has the largest CO2 project based offset system in the world
– 979 registered projects by April 1 2008
– Approx. additional 2021 projects in pipeline
– 49 countries
– 134,993,328 CERs issued (certified emission reductions)
– 2.7 billion CERs expected to end of 2012
• CDM has a legal basis in the Kyoto Protocol
– Run by Executive Board (EB) answerable to KP Parties
– EB back-stopped by UNFCCC secretariat with support for:
• Registration and issuance
• Accreditation of third-party validators
• Methodologies for emissions baseline setting and monitoring

12. Overview of the CDM market
Projects/
940
of 750
No. 471 530
183
39
Registered project activities Projects in the pipelines Projected CERs 1600
685
1900
2021
979
2700
3000
2500
2000
1500
1000
500
0
Dec-2005
(COP/MOP1)
May-06 May-07 Feb-08
CERs before 2012 (million)

13. Overview of the CDM market
Map and statistics accessible at http://cdm.unfccc.int/

14. Overview of the CDM market

15. Overview of the CDM market

16. Overview of the CDM market
Overview of the CDM market
Bangladesh 0.2%

17. Registered CDM projects all over the World
Sectoral Scope
Registered
Projects
1 Energy Industries (renewable -/ non-renewable sources) 650
2 Energy distribution 0
3 Energy demand 16
4 Manufacturing industries 69
5 Chemical Industries 23
6 Construction 0
7 Transport 2
8 Mining / mineral production 7
9 Metal production 1
10 Fugitive emissions from fuels (solid, oil and gas) 98
11 Fugitive emissions from production & consumption of halocarbons &
sulphur hexafluoride 16
12 Solvent use 0
13 Waste handling and disposal 256
14 Afforestation & reforestation 1
15 Agriculture 83
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18. Overview of the CDM market

19. carbon trading
Present Price of CERs and VERs (Carbon Credits)
Both the CERs and VERs are represented in terms of carbon dioxide equivalent (CO2e).
The present price (As of 1 April, 2008):
CERs : US $ 18.50-23/ton
VERs : US $ 7 to US $ 10/ ton
Crediting Period for CERs and VERs
Emission reductions can be claimed for maximum ten years, without revision of the
project baseline,
or
for a period of seven years with two extensions of seven year each, provided the project
baseline is revised at the time of each extension.

20. Carbon Market at a Glance 2005-2007 and Projected 2008
4200
3637
1639
710
$11.00
$7.50
$17.80 $18.50
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2005 2006 2007 2008
20
18
16
14
12
10
8
6
4
2
0
Volume (MT Co2e) Price of CER
Source: 2005-2006 World Bank and IETA, May 2007 and 2008 Point Carbon (Press Relaese Feb 26, 2008)

21. Price drivers – Evolution of the CER Price (secondary market, in EUR)
0
2
4
6
8
10
12
14
16
18
20
Mar-07
Mar-07
Apr-07
Apr-07
May-07
May-07
Jun-07
Jun-07
Jun-07
Jul-07
Jul-07
Aug-07
Aug-07
Sep-07
Sep-07
Oct-07
Oct-07
Nov-07
Nov-07
Nov-07
Dec-07
Dec-07
Jan-08
Jan-08
Feb-08
Source: Reuters – TFS Energy
Overview of the CDM market

22. CURRENT TRENDS IN THE CARBON MARKET
• CDM experienced a strong growth (from US $ 5 b to 17b)
throughout 2007.
• With increase in the volume of emission reduction, price
of carbon credits ( CERs and VERs) is also increasing ( $
7.5 in 2005 to $ 23 in 2008).
• CERs have consolidated as a reliable carbon asset class.
• Increasing interest in CERs for voluntary offsetting
purposes may constitute another price driver in the future.
• Voluntary GHG market has also seen strong
performance based on:
National/regional/domestic initiatives
Corporate social responsibility (CSR) issues

23. Country wise Number of CDM projects
Country Number of Projects
Sri Lanka 4
Thailand 5
Tunisia 2
Uganda 1
United Republic of Tanzania 1
Uruguay 1
Viet Nam 2
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24. • Assigned Amount Units (AAUs) – Each Annex I Party that ratifies the Kyoto Protocol has
a GHG emissions limitation commitment for 2008-2012, which is its "assigned amount." If
a country's emissions are lower than that amount, it may sell the unused units.
• Certified Emission Reductions (CERs) - These are credits issued for emission
reductions achieved by a project under the CDM. CERs can be used by an Annex I Party
to help meet its emissions limitation commitment under the Kyoto Protocol. The credits
issued for sink enhancements achieved by afforestation or reforestation projects under the
CDM are either temporary CERs (tCERs), or long-term CERs (ICERs) that are subject to
provisions to protect against possible reversals of the sink enhancements.
• Emission Reduction Units (ERUs) - These are credits issued for emission reductions or
removals achieved by a project under the JI mechanism as defined in Article 6 of the
Kyoto Protocol. ERUs can be used by an Annex I Party to help meet its emissions
limitation commitment under the Kyoto Protocol. Each ERU equals 1 tonne of carbon
dioxide equivalent (CO2 e).
• Removal Units (RMUs) - These are credits issued for net sink enhancements achieved by
eligible activities under Articles 3.3 and 3.4 of the Kyoto Protocol. RMUs can be used by
an Annex I Party to help meet its commitment under the Kyoto Protocol. Each RMU equals
1 metric tonne ofCO2e.

25. Country wise Number of CDM projects
Country Number of Projects
Argentina 10
Armenia 3
Bangladesh 2
Bhutan 1
Bolivia 2
Brazil 113
Cambodia 1
Chile 21
China 139
Colombia 6
Costa Rica 5
Cuba 1
Cyprus 2
Dominican Republic 1
Ecuador 9
Egypt 3
El Salvador 4
Fiji 1
Georgia 1
Guatemala 5
Honduras 12
India 296
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26. Country wise Number of CDM projects
Country Number of Projects
Indonesia 11
Israel 7
Jamaica 1
Lao People’s Democratic Republic 1
Malaysia 21
Mexico 99
Mongolia 3
Morocco 3
Nepal 2
Nicaragua 3
Nigeria 1
Pakistan 1
Panama 5
Papua New Guinea 1
Peru 8
Philippines 14
Qatar 1
Republic of Korea 16
Republic of Moldova 3
South Africa 12
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