The Carbon Market
The carbon market is the fastest growing commodity market in the world and anticipated to become the world's largest commodity market by 2020. Economic returns of up to $US30 trillion for investors in low-carbon technologies and infrastructure could be realised this century.
The US announced its intention in early 2009 to join the carbon race and has already drafted a bill that will have far reaching global effects, with the State of California (a larger economy than many countries) having started in 2011 a mandatory offsetting programme.
As and when the entire US comes online (estimated within the next 3-5 years) it will instantly become the world's largest carbon market, currently the US is second only to China. Those who enter the market early will be able to reap the rewards over the coming years. Commencing July 2012 the Australian Government have announced their intention to introduce a mandatory Carbon Offsetting scheme to all large Australian heavy industries and have already set a minimum price per credit of AUD$23.
China, the largest CO2 emitter in the world has also recently introduced in six of its largest cities its own trial carbon capping scheme. This is focusing on heavy industries and large employers as a prelude to a fully implemented scheme across the country within the next 2 years.
In order to preserve a high probability of keeping global temperature increase below 2 degrees centigrade, current climate science suggests that atmospheric CO2 concentrations need to peak below 450ppm (parts per million). We are currently at 395ppm and rising faster than at any time in the past 400,000 years, at a rate of 2ppm each year.
This rate of increase requires global emissions to peak in the next decade and decline to roughly 80% below 1990 levels by the year 2050 (Baer and Mastrandrea, 2006). Such dramatic emission reductions require a sharp move away from fossil fuel, significant improvements in energy efficiency and substantial reorganisation of our current economic system. The transition to carbon offsetting is an increasingly popular means of taking action.
By paying someone else to reduce GHG emissions, the purchaser of a carbon offset aims to compensate for - or "offset" their own emissions. Individuals seek to offset their living and travelling emissions, and companies claim "climate neutrality" by buying large quantities of carbon offsets to "neutralise" their carbon footprint or that of their products. The concept of carbon credits was initiated at the Kyoto Protocol of 1997. This placed a monetary value on the cost of polluting the air and therefore a price on preventing pollution or removing the pollution from the air. These credits are an intrinsic component of preserving the environment by reducing greenhouse gas emissions and fighting climate change.
Carbon Capital "because nature doesn't do bail outs."
SINGAPORE wants a piece of the growing multi billion-dollar pie that
is the market for carbon trading, as some 189 countries under the Kyoto
Protocol rush to meet their targets to reduce greenhouse gas emissions by 2012.