My blog was meant to be a bit snarky as TerraPass has a long history of advocating for mandatory carbon markets.

My point was to just gently point out that voluntary carbon markets, while often criticized, should be celebrated for the incremental commitments they signal, while as you point out the mandatory carbon market is a cost abatement measure.

CDM allows industrialized countries to offset their emissions by funding emission reduction projects in developing countries. As our analysis points out:

1. The world cannot meet the emissions reduction target needed to avoid disastrous climate change unless both industrialized and developing countries reduce their emissions.
2. CDM is currently the only way that developing countries can participate in the carbon market because they don't have mandatory caps.
3. Since emissions reductions from CDM in developing countries are matched with increased emissions in industrialized countries, there is no net reduction in emissions – a fundamental flaw in the structure of CDM.

The paper goes on to suggest ways that CDM can be modified in the post-Kyoto framework to correct the structural problems.

Tom Arnold of TerraPass (a firm that sells voluntary offsets) wrote an article praising our analysis, but reached an odd conclusion – that "the voluntary carbon market is the only carbon market that matters."

It's true that voluntary carbon markets are rapidly growing, and voluntary offsets can jumpstart efforts to reduce emissions, but this alone is not enough. Voluntary reductions will remain far short of what's necessary to stop global warming. For the deeper reductions we need, only mandatory carbon markets can deliver the results. Most of the delegates here in Vienna would agree that we must extend mandatory caps and expand the carbon market to developing countries.

Consensus around mandatory carbon markets is building in America, as well. Leading members of the U.S. Congress have announced their intent to introduce new bipartisan legislation to place mandatory caps on America's greenhouse gas emissions. The carbon market created by this legislation – potentially the biggest in the world – will provide powerful incentive for participation by developing nations. That's an initiative that will be welcomed around the world.