Voluntary Carbon Offset Buying Still Stagnant
Date: 10-Mar-10
Country: UK
Author: Nina Chestney
A church spire stands in front of a glass fronted office buildings in the city of London February 16, 2009.
Photo: Andrew Winning
LONDON - Buying activity in the voluntary carbon market remains slow due to seasonally weak demand in the first quarter.
"There aren't a lot of deals getting done," said Grattan MacGiffin, head of voluntary carbon at brokers MF Global in London.
"When people buy credits, they don't need them tomorrow, but sometime this year, to make good a promise they made last year. So timing isn't so important," he said.
The first quarter is a traditionally quiet period for the voluntary market, with activity usually picking up in the second and third quarters.
Many market participants were at a carbon conference last week which affected very recent activity.
The voluntary market, unlike regulated markets, relies on businesses to self-regulate their carbon emissions in the absence of a legally-binding climate pact and individuals' need to offset their carbon footprint.
Buyers are still focused on large volumes of industrial voluntary carbon units or small clips of exotic recently issued voluntary carbon standard credits, brokers said.
Activity on the Chicago Climate Exchange was also quiet, with no transactions reported last week.
"With all the CFI spot contracts at 10 cents there is little incentive to trade," said MF Global in a note.
Asia could be the growth driver for the voluntary market, according to The Climate Group's managing director Jonathan Shopley.
Fear of Western-imposed carbon tariffs on goods and services from Asia is likely to drive growth in offsetting emissions by large firms in the region, he told Reuters in an interview.
Asia's biggest online business platform, Taobao.com, joined the climate change organization last week to develop a low-carbon corporate strategy and influence its 170 million registered users to adopt low-carbon lifestyles, The Climate Group said.
Other Chinese companies that have recently joined The Climate Group include China Mobile, Suntech, Broad Air Conditioning, Lenov, CEICC and Tiptop Real Estate.
(Editing by Amanda Cooper)
