DBLM Solutions

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

DBLM Solutions Carbon Update

Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at 4.02. Carbon dropped below 4.00 briefly yesterday as auction demand failed to push prices higher as witnessed in the recent past, prompting traders to take profits. The energy complex has also shedded some value with Brent shedding $1.30 since June 7. This may be shortlived as Gas demand is set to increase while supply is forecast to remain flat. The Obama administration looks to be gearing up for some positive action on climate change. A inter agency task force was set up to evaluate the cost of carbon on the public. The new estimates are up 66% on previous estimates calculated in 2010. These figures will have serious effects on Government decisions about projects such as the proposed Keystone pipeline. The administrations new calculations places a price of $43 on each tonne of CO 2 emitted, i.e the cost incurred by the damage to society that a tonne of the GHG causes. The increase in cost is attributed to more advanced models developed by peer reviewed papers. The estimates are extremely cvomplex and many scientists agree that estimates will only grow as more information becomes available. The new research should influence a range of policy changes and see the US cooperate to a larger degree with global efforts.
Dec 13 EUA

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