Carbon Market in a Nutshell

The Kyoto Protocol defines GHG (Greenhouse Gas) emission targets for developed countries known as Annex I parties. With its three mechanisms - Emissions Trading, Joint Implementation (JI) and the Clean Development Mechanism (CDM) - the Protocol has created a carbon market which enables governments and private entities to participate in emission reduction efforts.

The carbon market is growing rapidly with great potential, attracting new participants such as the United States of America where a domestic Cap-and-Trade scheme is being successfully introduced and operated. According to State and Trends of the Carbon Market 2009 written by World Bank Institute, the annual market value of 2007 was US$63billion. In 2008, the value doubled to US$126billion. Total transaction volume also increased from 2.984 billion tCO2-e(2007) to 4.811 billion tCO2-e(2008).