Huge Oversupply Plus Low Targets Render Kyoto Protocol Emissions Market Ineffective
The first phase of the Kyoto Protocol's (KP) emissions offset market is drawing to a close with just over 13 billion giga tons (Gt) of surplus of emissions offset credits, more than a thousand times greater than anticipated demand of 11.5 million mega tons (Mt). The balance of supply and demand is only going to get worse as an anticipated second phase of the KP program kicks off next year with the overall surplus reaching as high as 16.2 Gt CO2. It could possibly reach 17.2 Gt if Australia and New Zealand don't link their national emissions offsets markets with KP's, according to a study from Thomson Reuters Point Carbon commissioned by CDM Watch.
The combination of weak 2020 national emissions reduction pledges on the part of developed countries, leniency as to the use of offsets and the burgeoning surplus renders the Kyoto Protocol and national emissions markets ineffective and incapable of fulfilling their fundamental reason for being: achieving significant reductions in carbon and greenhouse gas (GHG) emissions worldwide.
Carbon emissions may grow more than worst-case "business as usual" scenario
In fact, developed countries will actually be able to emit 3.6 billion metric tons more of CO2 than they are projected to emit under worst-case "business-as-usual" (BAU) emissions projections out to 2020, according to Point Carbon's, "Carry-over of AAUs from CP1-CP2—Future implications for the Climate regime." That's a big factor in the accumulation of a 16.2 Gt surplus in KP emissions offset credits that Thomson Reuters Point Carbon analysts foresee.
"The current surplus is due in part to a lack of political ambition, undermined further by economic recession," elaborated Andreas Arvanitakis, report co-author and director, Advisory Services at Thomson Reuters Point Carbon. He added that the issue of surplus AAUs and the second commitment period will be discussed at UNFCCC's Climate Change Conference taking place in November in Doha.
Article continues at ENN affiliate, Triple Pundit
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