Shaping the Next Generation of Carbon Markets
Right now, the carbon markets of the future are under construction in all corners of the world.
China is determined to pursue low-carbon development and is embracing the market as the most efficient way to do so. Wang Shu, the deputy director of China's National Development and Reform Commission, told us this week that he sees the "magic of the market" as the most efficient way to drive China's green growth.
Five Chinese cities and two provinces are piloting emissions trading systems with the goal of building a national carbon market. Chile is exploring an emissions trading system and focusing on energy efficiency and renewable energy. Mexico is developing market-based mechanisms in energy efficiency that could cut its emissions by as much as 30 percent by 2020. Costa Rica is aiming for a carbon-neutral economy by 2021.
Each of the countries pioneering market-based mechanisms to reduce their domestic carbon emissions are leaders. Bring them together in one room, and you begin to see progress and the enormous potential for a powerful networking domestic system that could begin to produce a predictable carbon price -- a sina que non for the speed and scale of climate action we need.
That's happening this week at the World Bank.
Last week, a group of around 30 made a transect from West to East across Sumatra, Indonesia, to learn about forests, trees, landscapes, and the people whose livelihoods depend on them. We were often shocked by what we saw. After camping overnight in Tesso Nilo National Park, Riau province, we lumbered slowly on the backs of elephants through tracts of newly logged and burned forest land, some planted with rubber, and learned that over half the park area of 83,000 hectares was encroached and deforested. Tesso Nilo has the highest biodiversity index for vascular plants in the world, and is the last remaining habitat in Riau for elephants and the Sumatran tiger. With their habitat shrinking, elephants often stray into surrounding villages, causing significant economic damage. Villagers retaliate by poisoning the elephants. With support from the Worldwide Fund for Nature (WWF)-Indonesia, an elephant ‘flying patrol’ has been established within the park, staffed by skilled mahouts who have trained six elephants to help chase wild elephants away from villages and back to the park, thereby reducing conflict with the local population. 
