Up 4 percent on 2010, helped by a surge in trading activity as record low carbon prices stoked volatility
Carbon markets across the world were valued at 96 billion euros ($122.28 billion) last year, up 4 percent on 2010, helped by a surge in trading activity as record low carbon prices stoked volatility, an analyst report said on Tuesday.
The value of the EU Emissions Trading System (ETS), the world’s biggest carbon market, grew by 6 percent to an estimated 76 billion euros, said analysts at Thomson Reuters Point Carbon.
Overall traded volume in so-called EU Allowances (EUAs), including options and auctions, reached around 6 billion last year, a 17-percent increase on 2010.
“The growth in value was relatively smaller than the volume growth due to lower prices,” the report said, noting the average weighted EUA price in 2011 was more than a euro below the price in 2010, due to economic concerns and a glut in permit supply.
Benchmark EUA prices collapsed to a record low 6.30 euros a ton on December 14, and prices ended 2011 around half of their value from the start of the year.
The ETS, the 27-nation bloc’s main policy instrument to fight global warming, caps carbon dioxide (CO2) emissions on over 10,000 power and industrial plants. It covers around half of the bloc’s emissions of the greenhouse gas.
The EU carbon market is also the biggest buyer of carbon credits issued under the Kyoto Protocol’s Clean Development Mechanism (CDM), which awards rich country investments in emissions-reduction projects in the developing world.
But the CDM market last year was beset by a record issuance of credits, which weighed on prices in the world’s second biggest carbon scheme. (Reuters)