Global carbon market doubled in 2008, cut less CO2

By Nina Chestney and Michael Szabo

BARCELONA (Reuters) - The global market for carbon emissions trading doubled in value last year, but actual realised emissions cuts fell as the global economic slowdown dented clean energy financing, the World Bank said on Wednesday.

The market grew to $126 billion last year, up from $63 billion in 2007 and nearly 12 times the value in 2005, the World Bank said in a report at the Carbon Expo conference in Barcelona.

A total 4.8 billion tons of carbon dioxide, the main greenhouse gas blamed for global warming, were traded last year, up 61 percent from the 3 billion traded in 2007.

The value of the European Union's Emissions Trading Scheme, the 27-nation bloc's flagship weapon in its fight against climate change, rose by 87 percent to $92 billion last year, the bank said.

That scheme traded 3.1 billion tons of emissions permits last year, up from 2.1 billion in 2007.

The rest of the market was made up mostly by secondary trade in Kyoto Protocol carbon offsets, which companies buy to cover their own emissions or sell to make profit.

"More than one billion (tons) were traded on various exchanges and platforms ... representing the largest growth rate of all segments in the carbon market with more than a 350 percent increase in traded volumes and values," the World Bank said. "These trades do not directly give rise to emission reductions unlike transactions in the primary market."

The so-called primary market, or the actual emissions cuts made and sold by United Nations-registered clean energy projects in developing countries, fell by 30 percent to 389 million tons. This segment was worth $6.5 billion last year, down from $7.4 billion in 2007.