"Natsource has provided input into the World Bank's market assessment every year since 2001 and we congratulate them for this work, which comes at a very important time," said Jack Cogen, CEO of Natsource. "The doubling of traded value in 2007 illustrates the ability of market mechanisms to mobilize capital to address climate change."
The report had some mixed findings for the CDM sector, which represents approximately 90% of traded value and volumes for the project-based market segment. Traded volumes for primary CDM transactions grew modestly in 2007. On a positive note, there was sharp growth in carbon contracts from renewable energy and energy efficiency projects. Reductions created by this class of projects represented nearly two-thirds of transacted volumes in this market segment, compared with just 33% in 2006 and 14% in 2005. According to the report, the CDM helped to leverage $33 billion in investment into clean energy projects in 2007. "The growth in traded volume and investment into these important types of projects illustrates that carbon finance can spur clean energy development," Cogen said.
Natsource also strongly supported calls by the World Bank to streamline the project-approval process, clarify the post-2012 policy framework and the role of project-based mechanisms in it. Mr. Cogen added: "In order to continue to stimulate investment in projects that provide revenue for developing countries and reduce compliance costs, policy-makers need to improve the performance of the project-based mechanisms, and send the project development and buying sectors a clear signal that market mechanisms will continue to be an important policy tool in the post-2012 policy framework to address climate change. In addition, all those participating in the U.S. climate policy debate should draw important lessons from the world's efforts to develop carbon markets and apply them in U.S. legislation."
