LULUCF-based CDM : too much ado for...a small carbon market

The Bonn agreement reached in July at the sixth conference of the parties (COP) to the FCCC states "that for the first commitment period, the total of additions to and subtractions from the assigned amount of a party resulting from eligible LULUCF activities under Article 12 (i.e. CDM), shall not exceed 1% of base-year emissions of that party, times five". The most probable size of this LULUCF-CDM market is analyzed in light of each Annex I party's actual and projected emissions and policies. Results show that the market size would be only about 110 Mt CO 2 eq. for 2000-2012, representing a maximum global market value of about US$ 876 million.