Climate Change

Maximizing the Use of Market-based Mechanisms: ADB's Carbon Market Initiatitive

Access to the rapidly increasing global carbon market, already at an estimated $80 billion in 2008, brings an obvious upside to developing countries as they begin to more systematically address the low-carbon transition needed in the region. By tapping these markets, countries are able to obtain additional resources needed for implementing greenhouse gas mitigation projects that qualify under the Clean Development Mechanism.

ADB's Carbon Market Initiative (CMI), established in 2006, has created a mechanism to convert this added cash flow into resources for project co-financing.

CMI supports the development of energy efficiency, renewable energy, and other greenhouse gas mitigation projects through the Asia Pacific Carbon Fund, Technical Support Facility, Credit Marketing Facility and the Future Carbon Fund.

Read CMI brochure [ PDF: 231kb | 12 pages ].

Asia Pacific Carbon Fund
Established and managed by ADB on behalf of fund participants, APCF upfront cofinancing to Clean Development Mechanism projects for future delivery of certified emission reductions. Operationalized in May 2007, the fund now has more than $150 million in commitments from participants.

Technical Support Facility
CMI provides targeted technical support to project developers and sponsors to prepare and implement clean energy projects eligible for the Clean Development Mechanism.

Credit Marketing Facility
CMF offers ADB's developing member countries marketing support for their carbon credits to be sold in the global carbon market, creating opportunities for governments, developers, and investors to take advantage of the carbon market.

Future Carbon Fund
ADB hopes to extend CMI's services into the future - beyond the year 2012, when current global commitments under the Kyoto Protocol ends. Approved in July 2008, the FCF will provide financing up front for ADB-supported projects that will continue to generate carbon credits after 2012. With an initial target size of $100 million, the fund is expected to be operationalized in early 2009.