July 10, 2008

Carbon Market Worth $59 Billion In H1 2008

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 total of 1.8 Gt CO2e was traded globally in the first half of this year, worth some $59 billion, compared to $63 billion for all of 2007. The aggregate worth of transactions in the first half of this year is already a full 94 percent of the value for all transactions in 2007. This is due to several factors, notably a higher average carbon price of $32.5 per tonne CO2e, up from $21.06 over the same period last year. Healthy EUA and secondary CER volume growth has also contributed.

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

Although the EU ETS dominates and is set to grow further with the inclusion of emissions from aviation from 2012, carbon trading activity has not been limited to the EU during the first six months of this year. In the Clean Development Mechanism market, some 502 Mt CO2e was traded in the first half of this year, worth $11.9 billion. This is up 27 percent and 20 percent, respectively, on the first half of last year.

Important developments are 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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