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Overview of Global Carbon Market Presented by: Iftekhar Enayetullah, Director, Waste Concern April 8, 2008

Overview of Global Carbon Market Presented by: Iftekhar Enayetullah, Director, Waste Concern April 8, 2008. Presentation Outline. What is Carbon Financing? Structure of Global Carbon Market Carbon Market Relevant for Bangladesh How Big is the Global Carbon Market?

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Overview of Global Carbon Market Presented by: Iftekhar Enayetullah, Director, Waste Concern April 8, 2008

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  1. Overview of Global Carbon Market Presented by: Iftekhar Enayetullah, Director, Waste Concern April 8, 2008

  2. Presentation Outline • What is Carbon Financing? • Structure of Global Carbon Market • Carbon Market Relevant for Bangladesh • How Big is the Global Carbon Market? • Current Trends in the Carbon Market web: www.wasteconcern.org

  3. Payment made in different forms to abate GHG IN KIND CONTRIBUTION FOR TECHNOLOGIES DEBT/ SOFT LOAN CASH EQUITY What is Carbon Financing? • Carbon financing can be defined as financial resources provided to projects generating (or expected to generate) green house gas emission reductions in the form of the purchase of such emission reductions. • In simple term, carbon finance is a purchase contracts whereby one party pays another party in exchange for a given quantity of Green House Gas (GHG) emission reductions. web: www.wasteconcern.org

  4. Global Warming Potential (GWP) of Key GHG Green House Gas Global Warming Potential Carbon dioxide (CO2 ) 1 Methane (CH4) 21 Nitrous Oxide (N2O) 310 HFC’s 140-11,700 Perflorocarbons (PFC’s) 7,000-9,200 Sulphur Hexafluoride (SF6) 23,900 web: www.wasteconcern.org

  5. investment $$ Industrialized country Emission reduction credits) Project Reducing GHG emissions in developing country web: www.wasteconcern.org

  6. Structure of the Global Carbon Market Global CARBON market Compliance Markets Voluntary Markets Kyoto Markets EU ETS New South Wales GHG Abatement Scheme UK ETS Chicago Climate Exchange CDM -> CERs JI -> ERUs VERs CCLAs AAUs + RMUs EUAs NGACs

  7. Carbon Market Compliance Market Voluntary Market

  8. maximum minimum Investment Opportunity from CDM/VER

  9. Carbon Market at a Glance 2005-2007 and projected 2008 Annual Volumes and Values of Transactions Source: 2005-2006 World Bank and IETA; 2007 and 2008 Point Carbon (Press Release Feb 26, 2008)

  10. Carbon Market at a Glance 2005-2007 and Projected 2008 Billion US $ Source: 2005-2006 World Bank and IETA, May 2007 and 2008 Point Carbon (Press Relaese Feb 26, 2008)

  11. Overview of the CDM market • CDM has the largest CO2 project based offset system in the world • 979 registered projects by April 1 2008 • Approx. additional 2021 projects in pipeline • 49 countries • 134,993,328 CERs issued (certified emission reductions) • 2.7 billion CERs expected to end of 2012 • CDM has a legal basis in the Kyoto Protocol • Run by Executive Board (EB) answerable to KP Parties • EB back-stopped by UNFCCC secretariat with support for: • Registration and issuance • Accreditation of third-party validators • Methodologies for emissions baseline setting and monitoring

  12. Overview of the CDM market No. of Projects/ CERs before 2012 (million)

  13. Overview of the CDM market Map and statistics accessible at http://cdm.unfccc.int/

  14. Overview of the CDM market

  15. Overview of the CDM market

  16. Overview of the CDM market Bangladesh 0.2% Overview of the CDM market

  17. Registered CDM projects all over the World www.wasteconcern.org

  18. Overview of the CDM market

  19. carbon trading Present Price of CERs and VERs (Carbon Credits) Both the CERs and VERs are represented in terms of carbon dioxide equivalent (CO2e). The present price (As of 1 April, 2008): CERs : US $ 18.50-23/ton VERs : US $ 7 to US $ 10/ ton Crediting Period for CERs and VERs Emission reductions can be claimed for maximum ten years, without revision of the project baseline, or for a period of seven years with two extensions of seven year each, provided the project baseline is revised at the time of each extension.

  20. Carbon Market at a Glance 2005-2007 and Projected 2008 Source: 2005-2006 World Bank and IETA, May 2007 and 2008 Point Carbon (Press Relaese Feb 26, 2008)

  21. Price drivers – Evolution of the CER Price (secondary market, in EUR) Source: Reuters – TFS Energy Overview of the CDM market

  22. CURRENT TRENDS IN THE CARBON MARKET • CDM experienced a strong growth (from US $ 5 b to 17b) throughout 2007. • With increase in the volume of emission reduction, price of carbon credits ( CERs and VERs) is also increasing ( $ 7.5 in 2005 to $ 23 in 2008). • CERs have consolidated as a reliable carbon asset class. • Increasing interest in CERs for voluntary offsetting purposes may constitute another price driver in the future. • Voluntary GHG market has also seen strong performance based on: • National/regional/domestic initiatives • Corporate social responsibility (CSR) issues

  23. Country wise Number of CDM projects www.wasteconcern.org

  24. Assigned Amount Units (AAUs) – Each Annex I Party that ratifies the Kyoto Protocol has a GHG emissions limitationcommitment for 2008-2012, which is its "assigned amount." If a country's emissions are lower than that amount, it may sell the unused units. • Certified Emission Reductions (CERs) - These are credits issued for emission reductions achieved by a project under the CDM. CERs can be used by an Annex I Party to help meet its emissions limitation commitment under the Kyoto Protocol. The credits issued for sink enhancements achieved by afforestation or reforestation projects under the CDM are either temporary CERs (tCERs), or long-term CERs (ICERs) that are subject to provisions to protect against possible reversals of the sink enhancements. • Emission Reduction Units (ERUs) - These are credits issued for emission reductions or removals achieved by a project under the JI mechanism as defined in Article 6 of the Kyoto Protocol. ERUs can be used by an Annex I Party to help meet its emissions limitation commitment under the Kyoto Protocol. Each ERU equals 1 tonne of carbon dioxide equivalent (CO2 e). • Removal Units (RMUs) - These are credits issued for net sink enhancements achieved by eligible activities under Articles 3.3 and 3.4 of the Kyoto Protocol. RMUs can be used by an Annex I Party to help meet its commitment under the Kyoto Protocol. Each RMU equals 1 metric tonne ofCO2e.

  25. Country wise Number of CDM projects www.wasteconcern.org

  26. Country wise Number of CDM projects www.wasteconcern.org

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