Hugh Sealy says Clean Development Mechanism needs to hunt for new markets in order to flourish
By Ed King
The UNâ€™s carbon market requires â€śboldâ€ť action to get it back on track, the new chair of its governing panel has warned.
Hugh Sealy, an environmental scientist from Barbados, said the Clean Development Mechanism is a â€śfantastic toolâ€ť but it needed â€śimaginationâ€ť to encourage greater use.
â€śThese are challenging times for the CDM. The ship is sound, in the best shape ever after years of improvement, but there is little wind in her sails,â€ť he said. â€śWe need to use our imagination and be bold in looking for ways to encourage use of this mechanism.â€ť
Sealy took over as head of the CDM Executive Board last week, with Germany’s Lambert Schneider, a researcher in carbon markets, elected as his deputy.
CDM credits can be used by governments and businesses to meet carbon targets, and since its launch it has generated more than $315 billion in climate finance.
But investment has fallen sharply, largely due to a lack of new ambitious climate policies. In January 10 new projects were submitted, compared to a peak of 319 in April 2012.
As a result there has been a surplus of credits on the markets, and the value of the carbon credits the CDM generates has fallen by 95% in the past five years to around $0.55.
In an attempt to drive up interest, the UN invited countries at the last major climate summit in Warsaw to control their greenhouse gas emissions using the CDM.
It has also tried to encourage companies, agencies and large events wishing to offset their emissions as part of social responsibility initiatives to use the Mechanism.
Joergen Fenhann, a senior scientist at UNEP who records all new applications in the CDM Pipeline told RTCC the basic structure of the UNâ€™s carbon market is in fairly good shape, but lacks interest as a result of wider political and economic factors.
â€śI think itâ€™s ready to handle radical emission reduction if you have the demand, and it will come, because according to IPCC the reductions are so large we need the market, but it will take time,â€ť he said.