WASHINGTON, May 10, 2006 (AFP) – The global market for carbon dioxide (CO2) emissions — an innovative offshoot of the Kyoto pact on global warming — has shown explosive growth, the World Bank said Wednesday. But in a new report, the World Bank also noted that recent events in the European Union’s Emissions Trading System (ETS) had underscored how deeply volatile the market remains.
The study said the worldwide market in CO2 trading was worth more than 10 billion dollars in 2005, 10 times the value of 2004.
“To put that figure in perspective, the entire US wheat crop in 2005 was valued at about 7.1 billion dollars,” said Karan Capoor, senior financial specialist at the World Bank and the report’s main author.
“The data makes it clear that carbon is now a financial commodity. Carbon is now priced and business managers take the carbon price into consideration along with other factors in making business decisions,” he said.
Capoor added: “But like other financial commodities, the events of the last two weeks in the EU ETS shows that markets can be volatile.”
The market is the brainchild of the Kyoto Protocol for controlling greenhouse-gas emissions — the carbon gases emitted mainly by burnin