MANILA, Jun 26, 2006 -- Xinhua

 

The global carbon emission market is expected to become a business of 100 billion U.S. dollars in the coming years, a report by the Asian Development Bank (ADB) said Monday.

This prospect will be supported by recent scientific findings on climate change, the entry into force of the Kyoto Protocol and the EU Emissions Trading Scheme, the ADB said in its feature report.

Industrial groups in the European Union and Japan among others continue to require "carbon credits" in order to avoid penalties resulting from their greenhouse gas emission levels, according to the report.

In the EU alone, these penalties will amount to 100 euros per ton of carbon dioxide-equivalent during 2008-2012, the report predicted.

The industrial groups can often buy carbon offsets from " developing countries, who reduce emissions by more than the necessary amount," it added. This trading system ensures emissions reductions achieved at the lowest economic cost.

However, this potential market is a long way from reaching its potential because of financing and technical gaps between the sellers and buyers, the report said.

"The financing gaps in the carbon market can be met through the establishment and management of a dedicated carbon cofinancing fund," Bindu Lohani, Director General of ADB's Regional and Sustainable Development Department, was quoted by the report as saying.

The ADB is proposing to set up a Carbon Market Initiative (CMI) to meet such needs. Consultations are ongoing with potential partners with the aim of launching CMI next year, the report said.

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