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Submitted by Aloke on

Thanks for your insight on this. The carbon market indeed looks promising and surely will encourage many countries to create domestic carbon markets. WBG's initiatives and funding commitments will provide the necessary support. However, I think are two key areas which may hinder development of carbon market:
1. Price of oil which is falling and has a significant link with the carbon price. Though coal price - which also is linked to carbon price is increasing- I think falling oil price may result in low carbon price affecting the market.
2. The governance and institutional capacity of developing countries for functioning of such markets is weak. For example, in India the coal cess collected has been hardly utilized and the PAT scheme for EE is also not very effective primarily due to governance challenges.

Welcome your views on the same.