Report on Carbon Credit by Asian Regulators
Asian Development Bank (ADB) releases a report on carbon credit by Asian regulators, aiming to summarize the application of carbon credit by Asian regulators.
The Asian Development Bank believes that more and more companies are purchasing carbon credits to offset carbon emissions and achieve emission reduction targets. The total value of the current carbon credit market has exceeded 1.8 billion US dollars and is expected to reach 7 billion US dollars by 2030 and 45 billion US dollars by 2050.
Related Post: CFA Institute Releases Voluntary Carbon Market Report
Development of Carbon Credit Policies by Asian Regulators
To evaluate the development of carbon credit policies by Asian regulatory agencies, the Asian Development Bank has collected answers to the following questions:
Information Disclosure of Carbon Credit
Market participants hope that companies can disclose more carbon credit information to measure the credibility of carbon credits. Currently, 67% of respondents have requested companies to disclose whether their carbon credits are based on technology or nature. Technology based refers to capturing carbon dioxide from the air through carbon capture, utilization, and storage technology, while nature based refers to capturing carbon dioxide from natural processes such as forest conservation and sustainable agriculture. 25% of respondents require companies to disclose whether carbon credits are purchased from voluntary carbon markets, and 17% require disclosure of whether carbon credits comply with Article 6 of the Paris Agreement.
Carbon Market and Carbon Tax
In addition to voluntary carbon markets, mandatory carbon markets are important decarbonization tools for carbon intensive industries. 70% of the respondents have already adopted a carbon emissions trading system, with 42% choosing a mandatory carbon market and 28% choosing a voluntary carbon market. 40% of respondents have already adopted carbon taxes, and some jurisdictions have also adopted both carbon markets and carbon taxes.
Measures to Improve the Quality of Voluntary Carbon Markets
The voluntary carbon market is mainly composed of issuers, carbon credit operators, registration agencies, verification agencies, and market participants. Regulatory agencies can take measures to improve credibility and transparency. The measures taken by the respondents include issuing carbon emission guidelines, developing voluntary carbon credit standards, adopting international high-quality carbon credit standards, and allowing the use of qualified carbon credits to offset some carbon taxes. These measures can promote more investors to participate in the carbon market.
Measures to Prevent Double Counting of Carbon Credits
Double counting is an important issue that may arise in voluntary carbon markets, as it can undermine the credibility of carbon credits. Article 6 of the Paris Agreement requires market participants to ensure that carbon credits can only be calculated once. 27% of respondents suggested a registry, 9% set up a carbon credit registration agency, and establish standards for carbon credit calculation. These measures can avoid double counting during the issuance, use, verification, and transfer stages of carbon credits.
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