Global carbon market doubles in 2008, cuts fall

The global market for carbon emissions trading doubled in value last year, despite the global economic slow down in the second half of 2008, but actual realised emissions cuts fell, the World Bank said on Wednesday.

The market grew to $126 billion last year, up from $63 billion in 2007 and nearly 12 times the value in 2005, the World Bank said in a report.

A total 4.8 billion tonnes of carbon dioxide were traded last year, up 61 percent from the 3 billion traded in 2007.

But most of these tonnes were traded over the secondary market, meaning they were traded between companies, often for profit, and did not represent actual reductions in the greenhouse gas emissions blamed for global warming.

Actual emissions cuts made and sold by United Nations-registered clean energy projects in developing countries fell by 30 percent to 389 million tonnes, worth $6.5 billion in 2008. This was down from $7.4 billion in 2007.

"The (market's) supply continued to be constrained by regulatory delays in registration and issuance and the financial crisis made project financing extremely difficult to obtain," the report said.

The lucrative secondary market for these reductions, populated by companies looking to either offset their own emissions or simply make a profit, rose by more than four fold to 1.07 billion.

The European Union's Emissions Trading Scheme, the 27-nation bloc's flagship weapon in its fight against climate change, rose by 87 percent to $92 billion last year, the World Bank said.