1. State and trends of the regulated A/R market
Side Event on Developments on Afforestation and Reforestation in the Kyoto Protocol
Till Neeff
Carbon Expo at Cologne, 03 May 2007

2. Obstacles to market success of forestry CDM are overcome

3. Forestry CDM was a niche market in 2006

4. Buyers start defining preferences
Most buyers do not have clearly defined policies yet
Regional preferences
“Green” projects preferred
Added value by quality standards

5. Price indications still limited
Factors influencing prices:
Project risk and risk-management
Where in the cycle?
Replacement obligation
The World Bank has paid ca. US$ 4 per t CO2-e (until 2017)
Standard forestry CDM credits must be cheaper

6. What needs to happen to make forestry CDM a success on the markets?
Limited market volume
Use by the EU governments, Japan and Canada, voluntary users
Use of forestry credits is capped to 5% of 1990 emissions (before 2012)
Forestry CDM has comparative advantages
Particular socio-economic and environmental co-benefits
Low-cost compliance hedging
Factors influencing markets success of forestry CDM
Will Kyoto markets be short or long?
Compliance strategies are yet to be defined
Innovative concepts by users and traders

7. Markets for carbon credits from forestry CDM
Till Neeff (Senior Consultant)