This Friday, March 3, at Quito - Ecuador, key actors from the business and productive sector together with academia and service companies, convened for the launch of the Carbon Platform of Ecuador with a view to promoting comprehensive climate action that can facilitate investments and generate employment. The global market for carbon credits is expected to grow at a CAGR of nearly 31% through 2027.
Ecuador is advancing in dialogues to enable the return of its domestic private sector to the global carbon market, including the forestry and industry sectors considering its central role to mobilize finance that otherwise would not be able and channel funds to projects with a positive environmental impact.
Indeed, Ecuador maintained a prominent role in the previous decade with respect to the global carbon market. In particular, with projects through the Clean Development Mechanism linked to the Kyoto Protocol, which allowed access to financing for various hydroelectric, wind and electricity production from sugarcane residual biomass.
The different productive sectors of the country aspire to take advantage of the benefits of the carbon market to contribute to their decarbonization strategies, as well as access to international resources for the provision of services. In the case of Colombia, the carbon tax and compensation exchange system would finance up to 14% of the financing needs of climate action in that country.
Internationally, according to McKinsey, the voluntary carbon market that today mobilizes close to U5$2 billion annually is expected to grow to more than US$50 billion by 2030. The total value of the global regulated and voluntary carbon market amounts to more than USD 270 billion. The demand for credits has intensified due to the global goal of reaching net zero levels of emissions to stabilize the increase in global temperatures imposed by the Paris Agreement.
The impetus for Ecuador's return to the carbon market occurs in a post-political referendum context at the domestic level and at a time of high public scrutiny and weakened confidence in the cost-effectiveness of the instrument at the international level. Recent articles in international media such as The Guardian have raised serious concerns about certain projects and accreditation providers where reported reduced or removed emissions have been overestimated or have affected human rights.
This situation demands that the political decision to return to the carbon market be marked by effective decision-making based on science and in line with the best international practices for socio-environmental safeguards, in a framework of participatory dialogue with all sectors, including the private and the peoples and nationalities. The return of Ecuador must be marked by a regulatory framework that ensures high integrity and competitiveness that avoids and prevents the problems evidenced in other countries to guarantee that the impact on the environment is real and transparent.
El objetivo de la Plataforma Carbono de Ecuador es promover un Mercado de Carbono íntegro, creíble y alineado a las metas Net Zero. De esta forma, a través del trabajo conjunto con la sociedad civil, el sector privado, las comunidades de pueblos originarios, las comunidades locales y gobiernos; la Plataforma Carbono pretende contribuir a un mejor entendimiento del funcionamiento de estos mecanismos, al tiempo de proveer insumos para el desarrollo de una política pública coherente con la meta de transición ecológica y descarbonización del país. Los miembros fundadores de la Plataforma incluyen CEMDES, ASOTECA, AIMA, Centro de Desarrollo de Políticas Públicas de ESPOL, ESA, entre otros actores relevantes de la cadena de valor que guarda un alto potencial de generación de empleos y atracción de inversiones internacionales.
The objective of the Carbon Platform of Ecuador is to promote a high-integrity, trustworthy Carbon Market aligned with the Net Zero goals. In this way, through joint work with civil society, the private sector, indigenous peoples and local cornmunities, and government; Ecuador Carbon Platform intends to contribute to a better understanding of the functioning of these mechanisms, while providing inputs for the development of a public policy consistent with the goal of ecological transition and decarbonization of the country. The founding members of the Platform include CENADES, ASOTECA, AIMA, the Center for the Development of Public Policies of ESPOL, RAINFOREST ECUADOR, ESA, among other relevant actors in the value chain that has a high potential for job creation and attraction of international investment.
During its virtual launch event, Carlos Cordova - representative for Latin America and the Caribbean of the International Emissions Trading Association (IETA), shared the opportunities of the growing trend of the global market and the potential of the region. In addition, representatives of strategic partners such as Richard Kiy - President of the Institute of the Americas, and Francisco Donoso - Executive Director of ASOCARBONO Colombia, expressed their willingness to accompany the efforts of the Platform to contribute to the decarbonization goal of Ecuador. This initiative is based on the principle that the Carbon Bond Market represents a mechanism for the private sector to derive financial funds for the mitigation of climate change, the protection of nature and the support of sustainable practices; being today when more funding is needed for these causes. This characteristic is particularly relevant considering the fiscal weaknesses that Ecuador is going through. With an institutional framework that allows for a high-integrity Carbon Market, Ecuador's Carbon Platform founding member believe its full potential can be developed.
For more information:
Voceros
Inés Manzano
Telf: +593 98 336 3336
Verónica Arias
Telf: 099 944 2002
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