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20 May 2009 | The volume and value of the world’s voluntary carbon markets nearly doubled in 2008, according to the latest edition of the annual State of the Voluntary Carbon Markets report, which was released on Wednesday.

Entitled Fortifying the Foundation: State of the Voluntary Carbon Markets 2009 to reflect the proliferation of new registries and other market infrastructure technologies, the report is published by Ecosystem Marketplace and New Carbon Finance with sponsorship from Evolution Markets, TZ1, JP Morgan, TÜV SÜD, Greenhouse Gas Services LLC, Baker & McKenzie, Essent Trading, MF Global, and Karbone.

Its aim is to provide not only an overviews of the market’s size and growth, but also the motivating factors driving market participants.

“This report is the only basis we all have for assessing the reality of voluntary markets,” says Timothée Lazaroo, a managing partner with French project developer ecosur.

“The report is eagerly awaited by the broader carbon market beyond the voluntary market,” adds World Bank Senior Finance Specialist Karan Capoor, who co-authors the Bank’s own State and Trends of the Carbon Market, which covers the entire universe of carbon trading including the compliance markets. “The Voluntary Carbon Report has been influential in urging the development of credible voluntary standards, providing quality, competition and choice to the broader market.”

Chicago Hope

The report shows voluntary carbon markets transacted an estimated 123 million tonnes of carbon credits valued at US$705 million in 2008, up from 65 million tonnes of credits valued at $331 million in 2007. The average price for voluntary offset credits increased 20% to $7.34/tCO2e.

Interestingly, the bulk of the growth came not in the over-the-counter (OTC) markets, but on the Chicago Climate Exchange (CCX), which was an early mover in promoting voluntary carbon offsets but has lagged the OTC market in volume and growth for years.

The CCX has also been plagued by charges that it employs lax standards that made it possible for some developers to earn carbon credits for projects that would not meet most other “additionality” tests, which require a project developer to prove that money from the offset made the project happen.

Yet, despite the criticism, CCX’s volume tripled to 69.2 million tonnes in 2008, while volume on the entire OTC market only rose 26%, to 54 million tones. Because of quality concerns, however, OTC credits traded at a premium of 66% over CCX prices

Related posts:

1. State of Voluntary Carbon Markets 2009 Report launched
2. Interview: myclimate on the Voluntary Carbon Market
3. Interview: Sustainable Travel International on the Voluntary Carbon Market
4. Baker & McKenzie Dominates Environmental Finance and Carbon Finance Market Survey
5. Analyst: World carbon market doubles in 2008

Tags: Carbon Markets, Carbon Offsets, CDM