Carbon Forecast Slashed; UN Seeks CDM Improvements
The analyst said price levels could drop to as little as €10/t between 2013 and 2015, before rising again in the 2018-2020 period, reaching €16/t in 2020.
The €12/t forecast is a little over a third of what Point Carbon predicted at this time last year.
Commercial manager Anne Kat Brevik said the main reason for the forecast cut is the global economic situation, including the European sovereign debt crisis, and governments’ resulting resistance to taking climate action.
She said that only four months ago the EU seemed likely to adopt a 25 percent emissions reduction target for 2020, but now Point Carbon is making its forecast based on a 20 percent emissions reduction scenario.
Senior carbon analyst Marcus Ferdinand described Point Carbon’s predictions as “gloomy” but said the analyst does not expect prices to fall further in the short term.
In other carbon market news, last week the UN Framework Convention on Climate Change said it was starting a year-long study on potential improvements to the Clean Development Mechanism, Bloomberg reported.
The CDM’s future is in doubt because of the Kyoto treaty’s looming expiration date, in 2012. The Chinese lead negotiator at UN climate negotiations in Durban, Su Wei, said that there is no reason to keep CDM going if the Kyoto emissions limits end.
More news from the Durban negotiations can be found in today’s executive policy briefing.
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