This year, the International Emissions Trading Association (IETA)’s annual Greenhouse Gas Market Report is focussed on Asia, and is released at Carbon Forum Asia in Singapore. Its title « Asia and Beyond on the roadmap to Global Carbon & Energy Markets », recognises the shifting focus of the world’s engagement with climate change through pricing and market mechanisms. As in so many other parts of the global economy, the Asia Pacific region is beginning to lead.
Authors from all sectors and all parts of the world, including businesses, public entities, research institutes, and international organizations have set down their perceptions and predictions in 29 essays and articles about the carbon scene in Asia and further afield.
Here are some points from the articles:
• Australia’s new emissions trading laws are a game-changer. Kyoto-compliant credits created under Australia’s “Carbon Farming Initiative” can be used for up to 5% of compliance during the fixed price period up to 2015 and without restriction afterward. But over the period from then to 202o, approximately half of the planned emissions reductions are projected to come from overseas offsets, decisively breaking the near-monopoly that Europe has had as source of demand till now;
• New Zealand’s trading system is changing; having started with “no” free initial allocation and then made transitional concessions, as opposed to Europe which started with free allocation and is now moving towards auctioning, New Zealand looks to be integrating more closely with the expected course for other markets;
• Korea is pushing ahead firmly with its commitment to trading. Like other new markets, it is learning from the EU Emissions Trading Scheme and can avoid any mistakes the EU has made along the way. Placing a price on carbon through the ETS is essential to encourage the development of Korea’s new green economy, a central plank of Korea’s national development plans;
• Taiwan is also ready to move ahead with trading, and its Environmental Protection Agency is developing their “Low-carbon City Implementation Program.” The final target is that four low carbon metropolitan areas will be developed in each of the northern, central, southern and eastern parts of Taiwan by 2020;
• China has set an ambitious timeline to pilot carbon trading at a regional level by 2013 and at a national level by 2015. In the pilot phase, local governments can decide upon the means of capping and select capped sectors by themselves. While the future of carbon trading in China depends on the pilot programs preparatory work at a national level is also starting;
• Japan is exploring the possibilities of a bilateral offsetting credit mechanism (BOCM) to complement the existing Kyoto mechanisms that are being used for achieving 2020 GHG emissions targets under the UNFCCC. While the situation on mandatory trading in Japan is not clear at present, the voluntary market is likely to grow faster post-2012.;
• It is estimated that India’s total industrial efficiency market stood at USD 5.5bn in FY2009-10. The market now includes the Perform Achieve and Trade scheme, designed after careful study of the EUETS and other trading regimes. It is forecast that this segment will grow at a 15% over the current decade. Developed countries like UK, Denmark, Finland, Belgium, Netherlands, Australia, USA, Sweden, Italy are already using similar mechanisms to drive energy efficiency policies and save carbon. India is the first among the developing nations to introduce such an initiative.
Download the report here