Emission trading coming home
Point Carbon’s ourth annual Carbon Market Survey ran rom 20 January to 15 February 2009.
The survey garnered 3,319responses rom 116 countries.
Price expectations are down or 2010, but remain strong or 2020.
Among our survey respondents, 45 percent expect an EUAprice o €35 or higher in 2020, compared to 46 percent in last year’s survey. By contrast, only 13 percent o respondents expect a2010 EUA price above €25, against 39 percent in 2008.
Falling emissions in the EU ETS produce more companies with surpluses, ewer with defcits.
The share o respondentsreporting that their companies need to buy EUAs in addition to their ull credit limit has allen rom 37 percent last year to 31 percentthis year. Furthermore, the percentage reporting they have surplus EUAs to sell is up rom 15 percent to 24 percent.
The economic downturn is hitting carbon project investments and credit purchases.
Sixty percent o respondents romcompanies with carbon trading operations report having scaled down, delayed or cancelled carbon credit project investments as aconsequence o the economic slowdown.
By contrast, many oresee a rebound in CDM investment or 2009.
Among companies active in the CDM market, 41 percento respondents predict they will increase their carbon credit project investments in 2009, against 23 percent that expect theirinvestments to decrease or stop completely.
Post-2012 activity in the CER market is signifcantly up.
Twenty percent o respondents rom companies trading carbon reporthaving traded CER orwards or post-2012 delivery, while the share is 14 percent or post-2012 CER options. This is signicantly uprom eight and our percent, respectively, last year.
Most respondents expect a US ETS.
Ninety percent o US respondents -- albeit rom a sel-selected audience -- think the USwill introduce ederal mandatory cap-and-trade by 2015. Among respondents in general, the share is up rom 71 percent last yearto 81 percent this year.
Top US oset standards are CDM and CCAR.
Respondents in the US nd these two the most likely to be accepted under a utureUS ederal mandatory cap-and-trade system.
Fewer respondents expect Copenhagen to produce a global climate agreement.
Fity-nine percent o our respondentsexpect an agreement to be reached by the COP in December 2009, against 71 percent in both 2007 and 2008. Slow progress in thepost-2012 negotiations, and the global economic slowdown, may constitute the main explanations or this decline.
Seventy-two percent o respondents expect a global carbon price in 2020.
This is virtually unchanged rom last year, andindicates stable expectations or the long-term health o the carbon market even as the short term looks more insecure.
TO THE POINT
This report was published at Point Carbon’s 5th annual conference, Carbon Market Insights 2009 inCopenhagen 17 - 19 March 2009. For more information, see www.pointcarbon.com