The world’s carbon markets are estimated to rise in value by two-thirds in 2014

Value of world CO2 markets is going to rise two-thirds in 2014 to 64 billion euros ($87.5 billion). This will be the first growth since 2011.

The rise will be mainly fuelled by a jump in European carbon prices triggered by market intervention efforts. Specifically, EU lawmakers will withdraw 900 million units from the ETS between 2014 and 2016, under a plan that is due to start next month, to prop up depressed carbon prices. We have to remind that carbon prices in markets worldwide have crashed in the past few years due to a chronic oversupply of permits fuelled by the global economic slowdown and a lack of political will to commit to reducing greenhouse gas emissions.

Also, traded volumes in the European Union’s Emissions Trading System (ETS) are expected to climb to 8.3 billion tonnes this year from 8 billion in 2013. And global trading volumes are also expected to rise by 3 percent to 9.6 billion tonnes of carbon dioxide equivalent this year, 10.3 billion in 2015 and 10.9 in 2016.

For its part, North America’s two largest regional schemes the Western Climate Initiative and the Regional Greenhouse Gas Initiative – are forecast to grow in value by 22 percent to a combined 2.7 billion euros. Some analyst say that North America’s carbon trading will become the world’s second largest market by both volume and value, overtaking CDM, which will fall to 236 million euros from 275 million, amid a widening of the scheme’s coverage to include emissions from transportation and other fuels.

Meanwhile, China’s seven nascent regional trading schemes could see total volumes top 24 million tonnes this year, before growing tenfold to around 227 million tonnes in 2015.

ALLCOT