The United Nations is expected to issue 232 million Certified Emission Reductions in 2011, according to an estimate released Monday by carbon market ratings and advisory firm IDEAcarbon.
The London-based company said its forecast for the volume of CERs to get the green light from the UN’s Clean Development Mechanism Executive Board represents a 75% increase over the 132 million CERs issued in 2010, and would set a new annual record.
The supply of UN offset credits is important for the carbon market, because the credits provide operators of power plants and heavy industrial facilities with a flexible option to use for compliance with their targets under the EU Emissions Trading System.
The company used a forecast model based on historical trends extracted from issuance data, which analyses figures from projects that have had CERs issued more than once, and then extrapolates data for projects that have not yet issued, it said.
IDEAcarbon said it had used the model for the last three years and it had proven accurate. For example, in 2009 the company predicted an annual total of at least 118 million CERs would be issued — which was 4.6% below the actual 2009 total of 123.4 million CERs. In 2010, it forecast 140 million CERs would be issued, which was 5.4% over the actual total.
By the end of 2012, the model predicts a total volume of at least 965 million CERs will have been issued, it said.
“There is more potential room for error in this estimation given that the model cannot predict unforeseen events, such as the suspension of issuance to HFC-23 projects that took place in 2010,” the company said in a statement.
At Tuesday’s prices, CERs for December 2011 delivery were trading at a discount of around Eur3.50 per metric ton of CO2 equivalent, compared with the corresponding EU carbon allowance contract.
IDEAcarbon is an independent provider of carbon ratings, research and strategic advice. It does not trade, buy, sell or originate carbon credits.
by Frank Watson, firstname.lastname@example.org
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