The ADB has approved the establishment of a carbon market trust fund to boost the number of clean energy projects in Asia and the Pacific. The Asia Pacific Carbon Fund (APCF), part of ADB's broader Carbon Market Initiative (CMI), will provide an additional source of finance at the early stage of project formulation by providing payments for Certified Emission Reductions (CERs) that are expected to be generated later.
The target fund size is $150 million and ADB has already received several expressions of interest to the fund from its member countries. The upfront payments from APCF will cover up to one half of CERs expected up to the end of Kyoto Protocol's first commitment period. The project sponsors in the market, including through CMF, can later sell the remaining CERs freely.
The overall value of the global carbon market was estimated at more than $10 billion in 2005, with the value of carbon market transactions reaching $ 7.5 billion in the first quarter of 2006 alone. The global carbon market is expected to grow significantly; Europe is already considering a continuation of the EU Emissions Trading Scheme well beyond 2012.