Korea joins ADB`s future carbon fund with US$20m commitment
The Republic of Korea has became the first Asian country to join the Asian Development Bank's (ADB) Future Carbon Fund with a $20 million commitment to acquire post-2012 carbon credits.
The partnership agreement, signed by Republic of Korea officials at ADB headquarters in Manila, comes just weeks ahead of international climate change talks in Copenhagen at which governments will negotiate a treaty to succeed the Kyoto Protocol, which expires in 2012.
'On the eve of the Copenhagen talks, the Republic of Korea's commitment to acquire carbon credits sends a clear signal to the international community that there will be a strong post-2012 framework to achieve a low-carbon economy,' said Xianbin Yao, Director General of ADB's Regional Sustainable Development Department.
Speaking on behalf of the Republic of Korea, Dr. Tae Yong Yoon, Deputy Director General with the Ministry of Strategy and Finance, said the country's participation in the Future Carbon Fund is consistent with the Korean Government's vision of 'Low Carbon, Green Growth.'
The Future Carbon Fund was approved by ADB's Board of Directors in July 2008 and became operational early this year. It is designed to help mitigate the effects of climate change by offering a mutually beneficial solution for both developing and developed member countries. This is achieved by helping governments, companies and institutions acquire Certified Emission Reductions (CERs) – or carbon credits – that are generated through ADB-financed projects in developing member countries.
For example, the Future Carbon Fund is currently pursuing an arrangement with a hydropower project in India that is being co-financed by ADB. The project is expected to generate approximately three million CERs, which the Future Carbon Fund plans to purchase upfront – by providing an advance payment for a substantial portion of the total volume of CERs – even though the credits themselves will only be generated after 2012.
The overall target size of the Future Carbon Fund is $100 million, but the team expects it to reach over $120 million in total commitments by the final closing date of 31 March 2010.
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