South Korea invests $20m into post-2012 fund
18 November, 2009
South Korea has committed $20 million to the Future Carbon Fund, a vehicle launched by the Asian Development Bank (ADB) last year to buy carbon credits generated after 2012.
This is the first Asian country to invest in the fund – following a total of $60 million committed by Sweden, Finland and the Flemish region of Belgium. The investment comes as South Korea prepares to adopt an emissions cap as part of a post-2012 international climate deal, and this week announced its intent to cut its emissions by 4% below 2005 levels by 2020.
“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 the ADB’s regional sustainable development department.
The target size of the Future Carbon Fund is $100 million, but the ADB expects it to reach more than $120 million in total commitments by the final closing date of 31 March 2010.
The ADB said the fund is currently pursuing a deal with a hydropower project in India that is being co-financed by ADB and is expected to generate approximately 3 million certified emission reductions (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”.
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