Global Carbon Market Worth $59 Billion

July 8, 2008
A total of 1.8 Gt CO2e was traded globally in the first half of this year, worth some $59 billion, compared to $62 billion for all of 2007.

The global carbon market has generated almost as much money in the first half of this year as it did throughout the whole of 2007, according to Point Carbon, a provider of market intelligence for the energy and environmental markets. A total of 1.8 Gt CO2e was traded globally in the first half of this year, worth some $59 billion, compared to $62 billion for all of 2007.

The aggregate worth of transactions in the first half of this year is already a full 94% of the value for all transactions in 2007. This is due to several factors, notably a higher average carbon price of $32 per tonne CO2e, up from $21 over the same period last year.

Of this 1.8 Gt CO2e, a massive 1.3 billion was traded within the EU's Emissions Trading Scheme (EU ETS), representing 70% of total trade so far this year, compared to 61% over the same period last year. Trades within the EU ETS generated $47 billion over the first six months of this year, up 161% on the first half of 2007.

In the Clean Development Mechanism (CDM) market, some 502 Mt CO2e was traded in the first half of this year, worth $12 billion. This is up 27% and 20%, respectively, on the first half of last year.

In addition, several new markets and market segments have been introduced, including the Regional Greenhouse Gas Initiative in the U.S., the trading scheme in Alberta, Canada, and the upcoming Australian federal Emissions Trading Scheme.

The figures and conclusions, taken from Point Carbon's "Carbon Market Monitors Mid Year Review," show that global carbon markets are growing strongly, despite a global economic downturn. According to Endre Tvinnereim, Senior Analyst at Point Carbon said, "for all of Kyoto's shortcomings, the carbon market owes pretty much everything to the Kyoto Protocol. The market is no longer immature and precocious, but rather advancing on many fronts, both geographically and in terms of financial sophistication. Indeed, unlike other economic sectors hit by a global downturn this year, the global carbon market is in rude health."

Important developments are also in store for the remainder of 2008 including the issuing of EUAs by all participating governments. This will again make a real spot market in EUAs possible, similar to the spot market that was generated during the first phase of the EU ETS.

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