Transaction costs of forest carbon projects

This lengthy report provides some preliminary estimates of transaction costs, especially to project developers and investors and outlines the steps involved in establishing and implementing a number of forest-carbon projects. As the carbon market develops, more operational entities are likely to enter, resulting in reduced transaction costs for individual projects. In terms of the size of transaction costs in the carbon market, the authors detail how this will depend on the institutional capacity and policy environment of both Annex 1 and host countries, and the establishment of new institutions to provide services currently implemented by individual projects and their partners.