Covering new ground: State of the forest carbon markets 2013

Covering new ground: State of the forest carbon markets 2013

State of the Forest Carbon Market 2013 is the fourth installment of the annual series produced by Ecosystems Marketplace, an initiative of the non-profit organisation Forest Trends. A total of 162 agriculture, forest, or land-use (AFOLU) projects were reported via a global survey designed to track transactions of offsets generated from projects that sequester or avoid carbon emissions. Analysis was also informed by previous reporting of some 513 unique project activities.

This highly detailed report, replete with diagrams and illustrative models and tables, begins by presenting the methodology of the study, before providing an overview of the forest carbon offset markets in 2013. Section two discusses the context of these markets, casting the sector as one in transition, and highlighting evident trends in REDD finance, voluntary carbon offsetting, and compliance forest carbon offset markets. Following this, section three examines the different types of projects, including afforestation and reforestation, IMF projects, and agroforestry. Other topics covered include project finance, offset buyers, market infrastructure, a region-by-region market profile, and market projections.

The report summarises the main findings, which include:

  • The global market for offsets from AFOLU projects transacted 28 MtCO2e, an increase of 9% compared to 2011. The market value reached $216 million, 8 per cent less than 2011’s record amount of $237 million, with forestry offsets’ average price falling slightly to $7.8/tCO2e.
  • Voluntary offset buyers were responsible for 95 per cent of all market activity, and 92 per cent of market value. Buyers in California and Australia sought forestry offsets to prepare for compliance carbon markets.
  • Demand was dominated by the private sector, responsible for 19.7 MtCO2e or around 70 per cent of market activity. Two-thirds of offsets were sold to multinational corporations, motivated by corporate social responsibility activities, to demonstrate climate leadership in their sector, or to send signals to regulators.
  • Demand for offsets from afforestation and reforestation projects remains high despite falling slightly from the previous year, while REDD offset demand grew for the first time since the project type’s all-time high in 2010.
  • Four new countries were involved in forest carbon market project development in 2012, making a total of 58. North American projects generated 25 per cent of all offsets transacted, while the Global South transacted half of the overall market share.
  • 57 per cent of all market activity was transacted by projects seeking or achieving certification to the Verified Carbon Standard.
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