Andrei Marcu, President of the International Emissions Trading Association, said an official figure would be released next year but activity was likely to be above a $60 billion estimate made earlier this year.
NUSA DUA, Indonesia (Reuters) - The market for trading in carbon emissions will probably be worth $60 to $70 billion this year, the head of an industry group said on Monday, upping an earlier estimate as the market drew new investors.
Andrei Marcu, President of the International Emissions Trading Association, said an official figure would be released next year but activity was likely to be above a $60 billion estimate made earlier this year.
"It is going to hit somewhere between 60 and 70 billion dollars, these are substantial numbers which I think shows the approach of the greenhouse gas market is a success," he told a news conference on the sidelines of U.N. talks about tackling climate change in Bali.
The vast majority of this comes from the European European Union's Emissions Trading Scheme (ETS), but the market for credits from the developing world is also expected to more than double, said Dirk Forrester from emissions and renewable energy asset management firm Natsource.
!ADVERTISEMENT!Under the Kyoto Protocol's Clean Development Mechanism (CDM), rich nation polluters can pay for clean-up schemes in poorer countries and earn credits to put towards their domestic quotas.
Last year alone around $5 billion worth of credits were traded, though developing countries and investors say the market needs to grow.
Both hope the market could get a boost from proposals to simplify CDM application systems and allow smaller projects to be bundled together into groups that are more attractive to investors looking to source large numbers of credits.
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The rise in the projected value of emissions trading came partly from more trading on the EU's ETS, partly from the expansion of the CDM scheme and the range of projects allowed, but also from an influx of funds into the increasingly popular market.
"So much capital is chasing projects that I think more projects are happening because more people are moving into the market," said IETA board member Lee Solsbery.
But he said uncertainty about the future of the market after the emissions targets laid out in Kyoto expire in 2012 would hinder future expansions.
"Growth can't go on forever until we have the direction we need post-2012," he told the conference.
"The market is really anticipating ... that acting on climate change is serious, the market is robust because they expect governments to act and if that expectation is doused, that would be a blow to the market," he added.
(Reporting by Emma Graham-Harrison, editing by Anthony Barker)
