According to the Carbon Markets report, EU ETS dominates international activity in allowance-based markets and is the only scheme with binding commitments beyond 2012. Trading more than doubled to 6.3 billion tonnes in 2009. London-based European Climate Exchange (ECX) accounts for 98% of EU ETS exchange traded futures and options in 2009. ECX trades rose by a further 20% in the first half of 2010.
Elsewhere, trading in Regional Greenhouse Gas Initiative (RGGI) in the 10 US states jumped more than tenfold to 806 million tonnes in 2009 in response to growing expectation at the time of federal legislation in the US. But progress on federal cap-and-trade legislation in the US remains slow.
Primary transactions in the Clean Development Mechanism (CDM) nearly halved to 211 million tonnes in 2009. CDM is dominated by China with 72% of volumes supplied. India, Brazil and Mexico are also important countries for CDM investment, although projects tend to be smaller. CDM has slowed as buyers have found it difficult to access project finance.
According to the report, CDM is also constrained by a lack of bankability of CDM credits after 2012 and lengthening delays in the approval process, with three years from application to first issuance of CERs.
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