The market for carbon dioxide emissions credits across the world could more than triple this year as companies prepare for the enactment of the Kyoto Protocol on climate change. Under Kyoto, companies that reduce CO2 emissions beyond the caps set by their countries can sell credits to firms that do not meet the reduction requirements. So far, about $500 million worth of carbon credits have been traded worldwide since 1996. In recent weeks, prices have been as high as $16 per ton of CO2, and the market is expected to become a multi-billion dollar one in the next seven years, according to Ken Newcombe, manager of carbon finance at the World Bank. About 67 million tons worth of credits are expected to be traded by the end of 2002, with most of the activity taking place in Great Britain and Denmark, as well as other European nations and Japan. The U.S. is losing out on the market because it has so far rejected Kyoto and any such national trading plan; so, too, are developing nations, where relatively few carbon traders from developed nations are willing to do business.
