While the carbon markets are struggling due to policy uncertainty and recessionary prospects in Europe, the market based approach to tackling climate and other ‘tragedy of the commons’ type issues is gaining ground. REC is one such market.
[ADB] estimates that, under the current growth trajectory, expenditure on roads, vehicles, parking and fuels in the region will total approximately $56 trillion between 2010 and 2030, representing nearly 4% of GDP. At this level, it will limit the funding available for other critical development needs such as education and health care, the bank says.
To try to curb this growth, the ADB has set up the Sustainable Fuel Partnership, a technical assistance project co-financed by the Austrian government. Within this initiative, it is exploring the possibility of treating fuel security as a public good that can be valued and translated into cash to fund sustainable transport projects and thus reduce fuel demand.
See a recent New York Times article on regional cap-and-trade programs here.