Many traders and analysts said the agreement will do little for carbon prices which are at record lows, as the two main European Union and U.N.-backed markets are stricken by flagging investments, an oversupply of emissions permits and worries about an economic slowdown.
Analysis:Carbon markets still on life support after climate deal
Carbon markets are still on life support after a U.N. climate deal agreed in South Africa on Sunday put off some big decisions until next year and failed to deliver any hope for a needed boost in carbon permit demand.
A package of accords agreed after marathon U.N. talks in Durban extended the 1997 Kyoto Protocol, the only global pact enforcing carbon cuts, allowing five more years to finalize a wider deal which has so far eluded negotiators.
Kyoto’s first phase, which is due to expire at the end of next year but now will extend until 2017, imposed limits only on developed countries, not emerging giants like China and India. The United States never ratified it.
Many traders and analysts said the agreement will do little for carbon prices which are at record lows, as the two main European Union and U.N.-backed markets are stricken by flagging investments, an oversupply of emissions permits and worries about an economic slowdown.
“It’s a sedative situation, in which a sick market needs a cure and instead of deciding which cure to use, the doctors keep using pain relief to gain more time to make the final prognosis,” said Jacopo Visetti, carbon trader at AitherCO2. (Reuters)
