London: The World Bank and other development banks will support the flagging carbon markets to prevent a slump in greenhouse-gas reduction projects and protect the climate, according to a former senior executive at the World Bank.
The bank can’t afford to see a precipice, a gap, in development of emissions-cutting projects such as wind farms in developing nations, Ian Johnson, formerly the World Bank’s vice- president of sustainable development, said on Wednesday at a seminar in London. The international financial institutions will be there.
European Union carbon dioxide allowances have slumped 61% since a 2 July peak on concern a recession will lower production and drive emissions below a cap set by regulators in the five years through 2012.
That drop in the biggest carbon market reduces the incentive to build solar parks in China and curb industrial gases in India, which get revenue from selling emission credits that can be used in Europe.
As governments support the financial industry, the same consideration should be given to the carbon-finance industry, said Andrei Marcu, a board member of the Geneva-based International Emissions Trading Association and adviser at Toronto law firm Bennett Jones Llp.
Governments should ensure that a viable price of carbon exists through these exceptional economic times, he said on Wednesday in a London interview.
Development banks and governments will want to ensure that the recession does not slow a movement away from high-emitting fossil fuels to protect the climate from the greenhouse gases they generate, said Johnson, who is chairman of IDEAcarbon, a London ratings company for projects that generate carbon credits.
Spot EU carbon dioxide allowances rose 69 cents, or 6.2%, to €11.85 ($15.44) a metric tonne on the BlueNext exchange in Paris as of 9:51am. They closed at a record low €11.08 on 20 January.
United Nations certified emission reductions for December on Wednesday rose 7 cents from a record to 10.03 euros a tonne on the European Climate Exchange in London.
UN credits can be used as a cheaper alternative in the EU programme, which covers about 11,000 factories and power stations in the region. Utilities in the EU emissions-trading programme, the world’s largest, need about half as many permits to burn gas as they do to use dirtier coal.