Carbon Finance at the World Bank: News & Events

The third CARBON EXPO - Global Carbon Market Fair & Conference - closed this Friday after three days of meetings, panel discussions, technology forums, business to business exchanges and public events. Organizers characterized Carbon EXPO 2006 as "a remarkable success both in terms of participants, exhibits and outcomes". More than 200 emission reductions projects from developing countries were presented - according to reports from participants - and a series of contracts for the purchase of emissions rights were concluded or initiated. High level government representatives from 25 developing countries, invited by the World Bank, attended the Conference.

2,050 participants from 94 countries (2005: 1,500 / 87 countries) attended the event, which was held from 10th to 12th May 2006, with the objective of generating new business opportunities for greenhouse gas emission reductions for private operators and governments from industrialized and developing countries. With 187 exhibitors from 50 countries, the trade fair once again proved its value as a multilateral knowledge learning and experiences. The exhibition space increased by 50 percent.

The event's organizers - the World Bank, The International Emissions Trading Association (IETA) and Koelnmesse - report that the third CARBON EXPO exceeded their expectations. In a joint statement they said: "For the third year in a row, CARBON EXPO has succeeded in providing an outstanding central platform for this market - a platform that brings together all projects, services, initiatives and developments under one roof. All of the market's important participants attended the event and used the opportunity to gain a comprehensive understanding of this sector and to meet their colleagues for face to face discussions. CARBON EXPO generated fresh momentum for the entire emissions trade and for the CO2 market," concluded James Warren Evans, Environment Director of the World Bank; Andrei Marcu, President and CEO of the IETA; and Wolfgang Kranz, Executive Vice President of Koelnmesse. They expressed full confidence that the market will continue its positive development. "The ‘engines' that are driving the market include the EU Emissions Trading Scheme (EU ETS), and the Clean Development Mechanism of the Kyoto Protocol with transactions by energy-intensive companies that are initiating projects in developing and emerging countries."

The success of Carbon EXPO is now expanding regionally. The three organizers announced that CARBON EXPO ASIA will take place in Beijing/China, in October 2006.

The perspective of participants:

"The most important sector event of the year" - Exhibitors and trade visitors were most satisfied with CARBON EXPO 2006

- Andrew Ertel, President, Evolution Markets, USA: "The ability to meet market participants from 94 countries has provided undue access to all relevant stakeholders in the global carbon market." And Maria Pìa Iannariello, General Manager, MGM International USA, reported: "CARBON EXPO gives us a great feeling of the growing carbon market. Sellers and project sponsors from all over the world are here." Pedro Moura Costa, President & COO, Ecosecurities Great Britain, underlined: "The most important sector event of the year."

- Godfrey Ssemakula, Assistant Director Uganda Investment Authority "As far as Uganda is concerned Carbon Expo is a huge success. We brought 18 projects that cut across sectors ,energy, landfill, co-generation and got a lot of interest from buyers, said Godfrey Ssemakula, Assistant Director Uganda Investment Authority. "If we could turn all these 18 projects into deals, it would be meaningful to Uganda. But the real challenge is underlying finance for the projects."

- "Endesa has not only identified new projects, partnerships and ideas, but made real business", stated Jesus Abadia, Director of Environment and Sustainable Development, Endesa, a leading Spanish company in the energy sector.

- Laurent Segalen, Director, ECF, France, approved: "The only place where deals are being engineered. People come here to negotiate and build partnerships."

- Robert Dornau, Director Climate Change Program, SGS, Switzerland: "Carbon Expo is a real trade fair that no company in this market can afford to miss."

- Gudmundur Sigurthorsson, Senior Vice President, DNV, Norway: "Carbon Expo is an institution."

TRENDS IN THE CARBON MARKET

Carbon market show dramatic growths amid concerns of future stability

The sixth annual World Bank carbon market intelligence study, released at CARBON EXPO, 2006, shows a dramatic growth in the global carbon market, led by strong activity in the European Union's pilot Emissions Trading Scheme (EU ETS). The report which covers the period from January 1, 2005 to March 31, 2006 records a booming global market worth over US $10 billion in 2005, ten times the value of the previous year.

The 2006 Report shows explosive growth in allowance markets, making them for the second year the main driver of growth of the market. European Union trades dominated the carbon market in terms of value-75 percent in 2005, but almost half of the total volume of greenhouse gas (GHG) emission reductions came from the developing world, making developing countries meaningful participants in the drive to reduce climate altering greenhouse gases on the earth.

According to the report "price signals in the carbon market have stimulated innovation especially in developing countries." The market analysis shows that transactions from projects in developing countries and economies in transition totalled 364 million tons of greenhouse gas emission reductions and in the EU ETS, some 322 million tons of allowances were transacted.

The carbon market encompasses both project-based transactions (CDM and JI) where a buyer purchases certified emission reductions from a project that reduces greenhouse gas emissions compared with what would have happened otherwise, and trading of greenhouse gas emissions allowances allocated under existing cap-and-trade regimes such as the EU ETS, as well as the voluntary carbon market, for example in the United States and Australia. The report documents growth on those voluntary markets as well. For example: the U.S.-based Chicago Climate Exchange has already seen some 1.25 million tons of carbon dioxide equivalent exchanged in the first three months of 2006, compared with 1.45 million over the whole of 2005.

Looking at future trends, the report emphasizes that "the prospects for the project-based market are quite solid, provided the EU does not erect any barriers limiting entry for CDM and JI imports for phase II (2008-2012)." Markets now price carbon and this has created the opportunity for the private sector to efficiently support investments to reduce emissions. The long term success of the carbon market, however, will be judged by its ability to achieve its environmental goals and preventing climate change.

Workshops and conference program provided comprehensive knowledge.

The conference program featured market developments and latest activities initialized by the European Union Trading Sheme (EU ETS) and the Kyoto Mechanism. 22 sessions (workshops and plenaries) provided comprehensive knowledge and a deep insight into the market and its mechanism. The subdivision of the conference in line with specific target groups was well accepted and met with the needs of the participants. The high-powered opening plenary was attended by about 600 participants.

The figures for CARBON EXPO 2006

A total of 187 companies from 50 countries, 83 percent of which came from abroad, participated in CARBON EXPO 2006, occupying a gross exhibition space of 5,800 m². Including estimates for the last day of the fair, CARBON EXPO 2006 attracted 2,050 trade visitors from some 94 countries, approximately 80 percent of whom came from abroad.

The next CARBON EXPO will take place from May 2 to 4, 2007.

CARBON EXPO ASIA to be launched in October 2006 in Beijing/China

Following three years of great success in Cologne, the partners of CARBON EXPO - The World Bank, IETA and Koelnmesse - have put together CARBON EXPO ASIA in Beijing in China. It will take place from 26th to 27th of October 2006. The new event will - as in Cologne - combine trade fair and conference. Participants will benefit from a conference program with high-level speakers, who will present up-to-date information with the latest developments. Companies are invited to present their projects to a fast moving market.

Information on the Carbon Finance sector at the World Bank: www.carbonfinance.org

Information on IETA: www.ieta.org

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