LONDON, June 1 (Reuters) – Carbon market players said on Tuesday they will consider developing self-policing rules after a call to action by the UN’s new climate chief, but warned that more political will is needed by governments to spur investment.
Christiana Figueres, who officially starts her new role in July, on Friday said market participants had “seriously impaired the trust of governments, civil society and non-profits,” through several scandals that rocked the largely unregulated $144 billion market last year.
“I believe that if the private sector itself does not develop self-policing mechanisms, somebody else will step in and do it for you,” she told a carbon conference in Germany.
The Carbon Market & Investors Association, one of three trade groups identified by Figueres, said it would consider Figueres’ proposition, CMIA director Miles Austin told Reuters.
Last year, the market’s reputation was rattled by allegations of carbon credit theft, tax fraud and trade in recycled credits.
“We cannot aspire to more advanced financial mechanisms … if current transactions are not squeaky clean,” Figueres said.
“Market participants need to hold themselves to a higher standard. This market needs public trust … without it, it does not function.”
Figueres, speaking in her first public appearance since being appointed on May 17, said the market also faced criticism for not contributing to sustainable development or improving the quality of life for families in developing countries.
Through one market scheme under the Kyoto Protocol, companies can invest in clean energy projects in poor nations and in return get carbon credits which can be sold for profit.
