First World Bank Pilot Auction Carbon Credits Redeemed

Last year, the World Bank’s Pilot Auction Facility for Methane and Climate Change Mitigation (PAF) conducted an online auction of put options, providing winning bidders the right to sell future carbon credits to the PAF at a price determined by the auction. GMI was privileged to provide the technical expertise and guidance to the Methane Finance Study Group—convened in late 2012 and facilitated by the World Bank—which spurred creation of this pilot auction program.

Last week, we were pleased to learn the first successful redemption of these carbon credits took place on 30 November. This innovative World Bank auction program has now resulted in the financing of more than $3 million in exchange for carbon credits representing the equivalent of 1.3 million metric tons of reduced carbon dioxide emissions. The $3 million in funds were disbursed for carbon credits derived from landfill methane recovery projects in Brazil, Malaysia and Thailand. “The World Bank Treasury is very pleased to see that the notes succeeded in achieving their intended purpose, to incentivize important carbon emission reduction results on the ground,” said Arunma Oteh, Vice President and Treasurer of the World Bank.

Already, the initial success of the pilot program has spurred greater interest among firms worldwide in PAF carbon credits; a second auction was held in May 2016 and a third auction is planned for January 2017. GMI congratulates the World Bank on its success in bringing innovative carbon/methane-mitigating capital instruments to the market, and stands ready to further support the PAF.

Read the entire story here from the World Bank.