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ENVIRONMENT
NAREERAT WIRIYAPONG
The government's role is critical in raising awareness about carbon credit opportunities and helping to consolidate greenhouse gas emission reductions with Clean Development Mechanism (CDM) projects, say global experts on carbon trading.
Thailand still lags China and India in CDM development but attention is becoming more focused here, said Kunnigar Triyangkulsri, chief executive of Barclays Capital (Thailand), a leader in emission trading.
Thailand has 46 CDM projects in hand out of about 3,000 globally for about 2.2 billion CO2 reduction credits, compared to 1,300 in China and 1,100 in India.
There are small CDM projects scattered around Thailand and the government could probably help them to consolidate into one feasible CDM, said Mrs Kunnigar. By doing so, the government would enable them to have more access to sources of funding.
CDM is a concept that allows developing countries such as Thailand to sell carbon credits to industrialised nations that have emission reduction obligations under the Kyoto accord.
Carbon credits are an instrument used in emission trading schemes globally in forms of certified emission reduction credits (CERs).
Hashika Patel, Barclays Capital's director of global environmental markets business and product development, said further education was also critical to add momentum to CDM development.
"The Thai government has a key role to play in terms of promoting awareness of CDM and bringing transparency to the project application process," said Ms Patel. "CDM project developers would still benefit from further education on how to get CDM projects through the approval cycle of the United Nations in the most effective way, and about developments and price conditions on the demand side of the market."
Ms Patel also commented on Finance Minister Surapong Suebwonglee's idea to allow carbon credits to be traded on the local stock exchange. "The exchange market is a very good way to bring buyers and sellers together in a transparent environment," she said.
The European Climate Exchange is the most liquid exchange for carbon trading, although many other exchanges are being set up to serve the local market such as those in India and Singapore.
"Thailand still has a way to go in terms of developing these CDM projects before critical mass is reached to establish its own local exchange for carbon trading," Ms Patel acknowledged.
Phichit Akrathit, president of MFC Asset Management Plc, said uncertain government policy had held Thailand back in CDM development when compared to markets such as China. The government should support local investors with clear tax laws, he said.
"Thailand has to legalise CERs as securities and support more CDM fund establishment," added Mr Phichit.
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