horsetrade?Baselines, CO2 Capture May Boost UN Emissions Tra

yes it is tomorrow in Asia


Baselines, CO2 Capture May Boost UN Emissions Trade, BofA Says
2010-12-07 23:57:32.354 GMT

By Mathew Carr
Dec. 8 (Bloomberg) -- United Nations climate-protection
proposals to introduce so-called baseline crediting and to allow
carbon-capture projects may enhance the world's second-biggest
carbon market, according to a Bank of America official.
"Standardized baselines," where projects get credits as
long as they produce fewer emissions than a minimum level, would
make it easier to determine which projects are eligible for
credits, according to the draft published Dec. 6 at climate
talks in Cancun, Mexico. UN envoys are seeking to make the Clean
Development Mechanism market more productive, while trying to
improve its environmental credibility.
"The impacts will include reduced transaction costs for
project participants and a partial derisking for developers to
implement certain types of projects in countries with limited
experience hosting CDM projects," said Abyd Karmali, global
head of carbon markets at Bank of America Merrill Lynch and
president of the Carbon Markets & Investors Association, the
industry lobby group.
The proposals to streamline the market are "looking good,
but there is always a lot of horse trading at the end," said
Kim Carnahan, a CDM policy specialist at the International
Emissions Trading Association, the Geneva-based industry lobby
group. The talks are planned to end on Dec. 10.
The CDM executive board, the market regulator, on Nov. 25
forecast it can achieve an 80 percent decline by Jan. 1 in the
backlog of pending submissions from projects seeking credits.
The backlog of pending requests worsened in the five months
through November, while pending project registrations improved.

Carbon Capture

Envoys are set to approve carbon capture and storage
projects in the developing world as CDM offsets, which are used
by companies and nations in industrialized countries that are
striving to meet their greenhouse-gas emissions limits.
Draft conclusions by delegates would allow the technology
to be deployed, providing concerns about leakage, legal
liability, environmental effects and measurement are met.
"There's definitely been movement where there hasn't been
movement for years," IETA's Carnahan said yesterday in an
interview in Cancun. "There's a good chance this decision would
require the CDM executive board to consider carbon capture and
storage methodology submissions." Each project must comply with
an approved methodology to win tradable credits.
Carbon capture and storage, or CCS, is an experimental
technology that has yet to be proven. It would siphon off carbon
dioxide emissions from power plants and factories and pump the
gas underground for permanent storage. CO2 emissions are blamed
for damaging the atmosphere. Decisions about whether to include
the technology in the CDM have been delayed for at least two
years because of questions about whether CCS will work and
whether it's suitable for developing countries.
"The most likely outcome is for CCS to become eligible,
but with projects only qualifying once they have passed an
extremely tough set of environmental safeguards and related risk
appraisals," said BofA's Karmali.

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--Editors: Clyde Russell, John Viljoen.

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net