Learn about possible post 2012 carbon market options.

1. ACX Executive Climate Change and Carbon
Trading Course
Nairobi, November 2012
Prospects of Carbon Market
in Post 2012 Period
Stephen Ndiboi
SDS Consulting Ltd
Email: sndiboi@sdsafrica-consulting.co.ke
Tel: +254 721955727

2. The carbon market depends on
demand created by policy
 We are now entering a period of uncertain
demand, with positive prospects in the long
term (2015)
 Expecting to see a new commitment period
under the Kyoto Protocol agreed at Qatar in
November/December
 Proliferation of Emissions Trading Schemes
around the world with prospects for CDM

3. Demand for CERs will therefore
continue, but with new limits
 Quantitative and qualitative limits exist on
the demand side
 For example, in the EU there is a preference
for LDCs & SIDS, no HFC‐23 e.tc.

4. The dominant countries in the
global carbon market

5. Comparison of rules in some
demand centres

6. EU and CER price forecasts to 2017

7. Competition to the CDM as new
supply mechanism come online
 Will credits from new mechanisms (eg NAMA,
REDD) compete with CERs?
 Not likely to see much volume before 2020
from NAMA. Japan’s bilateral scheme and
REDD credits to generate approximately 500
million credits together by 2020
 New mechanisms may borrow from the CDM’s
experience in standardized baselines and
PoAs, particularly in the case of NAMAs

8. Impacts on the future of climate policy
• Unified world: Kyoto
• Global agreement with
global carbon currency
• “Gold standard”
currency system
• Fragmented world:
Pledge & review
• Country groups with
distinct carbon market
systems
• Hodgepodge of non-convertible
currencies

9. Durban’s silver lining…
 Negotiations “to develop a protocol,
another legal instrument or an agreed
outcome with legal force under the
UNFCCC applicable to all Parties”
 Ad-Hoc Working Group on the Durban
Platform for Enhanced Action” (AWG-DPEA)
 Deadline in 2015
 Commitments starting by 2020

10. Durban’s silver lining…
 For the first time developing and
industrialized countries agree on a common
approach!
 But Copenhagen specter looms..

11. EU ETS
WCI
(2013) RGGI PRChina
(2013?)
NSW
NZ ETS
National ETS
Sub-national ETS
Korea
(2015?)
Tokyo
CDM projects
CDM projects
accepted in the EU
Taiwan
(201x?)
Links
Australian
ETS 2015
Pull-out of
Kyoto 2nd CP
Ongoing fragmentation

12. Durban summary
 International climate negotiations dodge or
defer the key contentious issues until
2015/2020
 Nobody wanted be responsible for destruction
of the institutional framework of the Kyoto
Protocol and thus it survived
 The EU has surprisingly retaken its role as
pioneer, with India playing the “bad guy”
 ALBA socialists were rebuffed, like in Cancun
 Qatar COP 18 will showcase the Middle East!

13. First Step Second Step Ultimate Regime
2008-2012 2013-2020 2020--
Kyoto Protocol:
without Canada
and US
Kyoto Protocol
without Japan and
Russia
Mutually
reinforce,
or conflict?
Pledge and
review process
(Copenhagen/
Cancun)
Negotiated by 2015
Ultimate Regime:
Extension of the Kyoto
core? Or a smooth
sequel to the
second step?
International climate policy 2008-2020

14. On our
way
towards
3-4°C

15. Thanks for your attention!
Stephen Ndiboi
SDS Consulting Ltd
Email: sndiboi@sdsafrica-consulting.co.ke
Tel: +254 721955727