June 14, 2010 / 10:34 PM / 9 years ago

Global voluntary carbon market tumbled in 2009

* Value of deals dropped 47 pct, volume fell 26 pct

* Stalled US, Australia climate plans hurt demand

WASHINGTON, June 14 (Reuters) - The global voluntary carbon market tumbled last year both in value and in volume, according to a report released on Monday, as the recession and uncertainty about whether the United States would regulate greenhouse gases hurt demand.

The value of deals in the global voluntary carbon markets dropped 47 percent to $387 million in 2009, said the report by Ecosystem Marketplace and Bloomberg New Energy Finance.

The voluntary carbon market operates outside mandatory emissions reductions schemes such as the European Union’s. Many companies in voluntary carbon markets, such as the Chicago Climate Exchange (CCX) CLIE.L, to prepare themselves for mandatory markets that might affect them in the future.

In such markets companies pledge to cut emissions of planet-warming gases. Those that reduce emissions can sell credits representing the cuts to companies who do not. Almost half the voluntary market was transacted through the CCX last year.

The average price of carbon credits in the over-the-counter market slipped about 12 percent from $7.30 per tonne to $6.50 per tonne, said the fourth annual report.

Volumes declined 26 percent in response to the global financial crisis as companies cut spending in corporate social responsibility and as government climate plans stalled in the United States and Australia.

The U.S. House of Representatives narrowly passed a climate bill in the middle of the year but legislation stalled in the Senate during the second half, which helped push down demand.

“The year came in like a lion but went out like a lamb,” Katherine Hamilton, a managing director at Ecosystem Marketplace, said at the report’s launch.

The most popular type of offset — or certified reduction in greenhouse gases that can be bought by a company — was originated by burning methane, a powerful greenhouse gas, at farms or abandoned coal mines. Forestry projects, either planting trees or managing forests, were also popular.

The report was based on information collected from more than 200 suppliers of offsets. It did not measure how well the voluntary deals actually cut emissions.

Reporting by Timothy Gardner; Editing by David Gregorio

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