making the carbon market work for poor communities

Carbon markets

There are two markets for carbon offsets, the compliance market and the voluntary market.

The compliance market

In the compliance market, companies and governments in industrialized countries buy carbon offsets to comply with their emission reduction targets under the Kyoto Protocol. The Clean Development Mechanism (CDM) allows emission-reduction projects in developing countries to earn certified emission reduction (CER) credits, each equivalent to one tonne of CO². These CERs can be traded and sold to achieve compliance with obligations.

In total 6.898 projects in 87 countries have been registered (June 2013), of which 2.337 have actually issued credits. 2.1% of all CDM projects are located in Africa.

More statistical information about CDM can be found here:

The voluntary market

The voluntary carbon market, or carbon offset market, has evolved in parallel to the compliance market. In this market there are no caps or legal binding responsibilities to fulfill as there are in the compliance market. It usually involves buyers such as companies, individuals or organisations seeking to offset emissions for ethical reasons or branding and Public Relations. It is typical to offset emissions from events, flights, products or annual emissions.

In 2010, 58% of the voluntary projects were located in developing economies, 5% in least developed countries (LDCs). In these countries, forestry dominated the expanding portfolios of project types. 4% of all transacted credits originated from Africa.