As written for Forestry and Development on 7 July 2011.

The World Bank revealed that the global carbon trading market has stalled. A recent World Bank report found that the total value of the global carbon market stalled at $142 billion” despite rising emissions and several years of market growth.

There is a pertinent conclusion to be drawn for this development: carbon financing mechanisms – such as Reducing Emissions from Deforestation and Forest Degradation (REDD+) schemes – are little more than a pipe dream.

The World Bank’s annual review of the global carbon market” The State and Trends of the Carbon Market 2011″ noted several reasons for the market decline. These include a continuing lack of clarity about the future of the market” and the loss of political momentum on setting up new cap-and-trade schemes in several developed economies.

According to the report” the World Bank undertook several initiatives aiming to boost confidence in carbon market in the face of lagging markets:

–          The Partnership for Market Readiness” launched in Cancun in December 2010″ which aims to support national mitigation efforts using market approaches

–          World Bank’s carbon funds and facilities” such as the Carbon Partnership Facility” which aims to assist low-income countries currently development REDD+ initiatives

But these well-funded initiatives are yet to achieve tangible development targets. And they don’t appear to deliver in the near future” according to high level representatives of local and indigenous communities. Andy White” from the Rights and Resources Initiative” recently commented that “the global market for forest carbon is not going to establish itself anytime soon”. The Rights and Resources Initiative is a coalition of organisations including NGOs and research institutes sponsored by a number of governmental development agencies.

What Papua New Guineans want is real development projects not pie-in-the-sky carbon aid. PNG must instead pursue planned development projects” such as sustainable forestry” in order to provide both good environmental outputs and meet development objectives.