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SINGAPORE : Industry watchers say Asia's renewable energy market will be worth some US$50-55 billion over the next 5 to 10 years.
And emission trading in the region could start to gain traction as policy makers focus on developing a definitive agreement to fight climate change.
The awareness around climate change and emissions reduction is building up. And experts say Asia holds a huge potential for the development of renewable energy projects.
Figures from the United Nations showed that as of July this year, there were 2,300 clean development projects globally, up 35 per cent on-year. Three quarters of the projects were in Asia.
Observers say this presents a huge potential for the development of a carbon credits market in the region.
A carbon credit is a value that has been assigned to a reduction or offset of greenhouse gas emissions. And they can be traded to help countries meet their emissions reduction targets.
Developed countries can buy credits to meet flexible reduction targets, while Asian countries can sell them to meet more aggressive reduction time frames.
Henry Derwent, president & CEO, International Emissions Trading Association, said: "We've seen total volumes of trading doubling from year to year, give or take a glitch from the global recession, which seems to be moving. I think we'll see that sort of growth pattern repeated in the future."
Observers also say that the strong demand for clean energy projects is unlikely to be affected by the outcome of the upcoming climate talks in Cancun, which are not expected to come up with a post-Kyoto commitment.
The Kyoto Protocol, which will expire in 2012, is an agreement aimed at fighting global warming.
As investor interest starts to gain traction, this could also create new trading hubs in Asia.
Edwin Khew, chairman, Sustainable Energy Association of Singapore, said: "If you look at the fact that 80 to 85 per cent of the world's carbon credit type projects actually hail from this region in Asia, then I think it makes good sense for Singapore, based in the middle of this region... (to) be a de facto carbon trading or emissions trading centre."
But challenges still remain in Asia, due to lack of market appetite for carbon trading. With 30 emissions trading companies already in Singapore, observers however say there is a good base for the market when it eventually picks up.
- CNA/al
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