Carbon credit supply potential beyond 2012. A bottom-up assessment of mitigation options.
By S.J.A. Bakker et al., Energy research Centre of the Netherlands, November 2007In the context of climate change mitigation commitments and post-2012 negotiations questions have arisen around the potential and dynamics of the carbon market beyond 2012. This study focuses on gaining insight in the supply side of carbon credits after 2012 by studying potential and costs of greenhouse gas reduction options in the Clean Development Mechanism (CDM) and other flexible mechanisms.
An elaborate analysis of future demand for credits is outside the scope of this report. It is concluded that the potential for greenhouse gas reduction options in non-Annex I countries in 2020 is likely to be large. This study has also made clear that the extent to which this potential can be harnessed by the CDM strongly depends on future eligibility decisions, notably for avoided deforestation, the application of the additionality criterion, and to a lesser extent the success of programmatic CDM and the adoption rate of technologies. Compared to this market potential, demand for carbon credits could be in the same order of magnitude, depending on the post-2012 negotiations and domestic reductions in countries with commitments. In addition to CDM, Joint Implementation projects in Russia and Ukraine and banked and new Assigned Amount Units may play a significant role in post-2012 carbon markets.