A suggestion by a high-level panel that the United Nations Green Climate Fund buy certain emission credits from the Clean Development Mechanism could help alleviate a supply glut, according to a research group.
Using the Green Climate Fund to buy Certified Emission Reductions, for example, “makes eminent sense and is a credible scenario that must be seriously examined,” Andrei Marcu, head of the Centre for European Policy Studies’ Carbon Market Forum in Brussels, said in an e-mailed report today.
A glut of carbon permits in the European Union market has depressed demand for UN-certified carbon credits, and forced prices to record lows last week. CERs for December plunged 23 percent to 1.10 euros ($1.44) on October 19. Prices have fallen 84 percent in the last year.
The GCF was established in December at the last round of UN climate-treaty talks in Durban, South Africa, to distribute some of the aid pledged by developed nations to poorer countries during previous sessions. Financing will go toward reducing greenhouse gases from energy production and adapting countries to the effects of global warming, such as rising sea levels.
A high-level panel commissioned by the UN last year reported that the Green Climate Fund could be used to purchase carbon credits in order to guarantee continuing funding for emissions reductions. The fund, which was set up to help funnel about $100 billion a year in climate-protection finance to developing nations from richer countries, could specify the types of CDM credits that it wants to buy, Marcu said.
No monopoly
Other emission-reduction programs around the world would also potentially supply the fund with reductions, Marcu said.
“There can be no expectation of a monopoly for the CDM,” he said.
Australia and New Zealand allow companies participating in their national emissions markets to buy CERs to help meet their caps on discharges, while governments in developed countries may also use the offsets to meet their own targets set by the Kyoto Protocol.
UN envoys are planning to meet for a two-week climate summit scheduled to start on November 26 in Doha, Qatar.
The UN needs to develop the so-called Framework for Various Approaches under the UN Framework Convention on Climate Change to help oversee domestic programs, Marcu said earlier this month. Climate science shows the planet will be imperiled if it waits for nations to agree a global treaty, he said.
