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Climate: Carbon 'offsets' rise 4% in 2012

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(Globalpost/GlobalPost)

Trade in carbon offsets, a voluntary means of reducing one's footprint in global-warming gases, rose by four percent in volume terms last year as the market price of carbon collapsed, a report said on Thursday.

Voluntary commitments for offsets for immediate or future delivery reached 101 million tonnes of carbon dioxide or its equivalent (CO2e) after 97 million tonnes CO2e in 2011, Ecosystem Marketplace said.

It is only the second time that the 100-million-tonne mark has been breached. The first time was in 2010, when trade was boosted by a voluntary US forum, the Chicago Climate Exchange (CCX), which wound down operations in the same year.

However, market value last year decreased by 11 percent to $523 million (405 million euros), coinciding with a slump in the price of CO2.

Carbon offsets have become a badge of corporate responsibility for green activists.

They entail investment in a project that absorbs greenhouse gases or helps attenuate them to help offset one's carbon emissions.

These purchases are voluntary and not included in any emissions caps.

The private sector accounted for 90 percent of offset trade last year, led by Europe, which had 43 percent of the total, followed by the United States, the annual report said.

Renewable energy drew 34 percent of offset commitments, followed by forestry (32 percent) and carbon-alleviating domestic appliances, such as clean cookstoves and water filtration devices, which placed third with nine percent.

Offset purchasers were willing to pay a much higher price for CO2e than in the international market place, the report noted.

In 2012, the average offset price was $5.90 per tonne of CO2e, down from $6.20 in 2011, but nearly six times higher than the price of less than $1 under the UN's regulatory offset system, the Clean Development Mechanism (CDM).

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http://www.globalpost.com/dispatch/news/afp/130530/climate-carbon-offsets-rise-4-2012