Saturday, December 18, 2010

The World Bank goes all in on carbon markets

The NY Times reports: World Bank Will Help Finance Carbon Markets

"As the United Nations climate change talks in Cancún lurch slowly toward an uncertain conclusion, the World Bank is stepping in to help developing countries set up pollution credit markets to help pay for clean development programs.

"Robert B. Zoellick, the World Bank president, will appear before delegates here on Wednesday to announce the creation of a multimillion-dollar program to create trading mechanisms to stimulate clean energy projects and to slow the destruction of tropical forests, one of the primary sources of global warming emissions. ...
"The list of countries that will take part in the carbon market initiative was not announced, but they are expected to include China, Mexico, Indonesia and Chile. Other countries are expected to join as more funds become available, bank officials said.

"The European Union already has a carbon market, known as the Emissions Trading System, which barters pollution credits for European industries for climate-friendly projects, mainly in the developing world. Legislation to create a similar national trading system in the United States stalled in Congress this year.

"Such programs are controversial because they have been at times poorly monitored and the price for carbon credits has fluctuated wildly. Many poorer nations also complain that their natural resources have been turned into commodities traded on exchanges in wealthy countries.

“Carbon markets are an irreparably flawed means of addressing climate change,” Karen Orenstein of the environmental group Friends of the Earth told Reuters. “They are unreliable and subject to fraud, and they open the door to offset loopholes that undermine environmental integrity.”

"The World Bank hopes to devote as much as $100 million to provide technical support and other aid to help developing countries establish carbon exchanges and other ways of raising private funds to help reduce emissions and adapt to climate changes."

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