PR — Point Carbon, a world-leading provider of independent analysis and consulting services for governments and companies in the global power, gas and carbon markets, predicts that the global carbon market will see 4.2 billion tons carbon emissions (CO2e) transacted during 2008, up 56 percent from last year. At today’s prices, that would make the market worth €63 billion (USD $92 billion).
The figures, published in a Point Carbon report “Carbon Market Analyst: Outlook for 2008,” see continued growth in the European Union Emissions Trading Scheme (EU ETS), which Point Carbon speculates will be worth some €46 billion (USD $68 billion) in 2008. Options and auctions contribute to the increased volume in the EU scheme this year.
“We anticipate growth for several reasons. Primarily, the tightness of the Phase 2 cap will increase the traded volume compared to 2007 simply because more players are short of allowances. The proposed EU climate and energy package of January 23 of this year further strengthens this tightness,” said Kjetil Røine, Manager of Point Carbon’s Carbon Market Research team.
Point Carbon’s figures also show that developing countries continue to deliver reductions. The Clean Development Mechanism (CDM) saw transactions of 947 metric tons in the primary and secondary markets in 2007, producing a combined value of €12 billion (USD $17 billion). While Point Carbon expects the primary CDM market to shrink in 2008, it believes that secondary transactions will continue to grow strongly. The forecast total volume of the CDM market in 2008 would be 1.2 billion tons CO2e, worth €15 billion (USD $22 billion) at current prices.
Point Carbon also presents volume forecasts for a number of new markets, including the US ten-state Regional Greenhouse Gas Initiative (RGGI), Kyoto country emission allowances (AAUs) and offset trades for future federal cap-and-trade schemes in the US, Australia and Canada. In total, carbon markets outside the EU ETS and CDM are predicted to see transactions worth €1.5 billion (USD $2.1 billion) in 2008.
“We now see new emissions trading schemes developing worldwide contributing to a significant momentum in the global carbon market in 2008,” Røine commented. “Worldwide policy decisions and signals could potentially change the actual traded volumes in 2008.”