Emissions trading are thus fast becoming a new industry in its own right. The price of carbon in the EU ETS has more than tripled from €7 per tonne when trading started in January 2005 to about €22 in January 2006. The global emissions trading market, estimated at €5 billion in 2005, is projected to reach €34 billion by 2012.
Common Issues to be Resolved in CDM Projects:
For effective implementation of CDM Projects, these are the common nature of issues that need to be addressed and resolved amicably:
• Credibility The mechanisms are often regarded as loopholes. There
is concern that, by taking advantage of the mechanisms, Parties could avoid
taking real actions at home to reduce emissions.
• Additionality Participation in both JI and emissions trading must be “supplemental” to domestic actions to meet emission commitments. How is this requirement to be operationalized? There is a similar provision with the CDM.
• Participation of non-State entities The Protocol takes a different approach towards project based mechanisms and emissions trading.
CARBN MARKET- EMISSIONS REDUCTION
• There is no single carbon market, defined by a single commodity, a single contract type or a single set of buyers and sellers.
• What we call “carbon market” is a loose collection of transactions in which quantities of greenhouse gas emissions are exchanged
Information is limited, especially on prices, since there is no central clearing-house for carbon transactions. As such, it is difficult to compare prices/ quantities over the whole market