UN Emission Credits Surge 38%
Emission credits issued by the United Nations increased 38 percent this month, Bloomberg reports.
The surge came amid speculation that developers are buying up the contracts â€” which are sold by the UN in a bid to encourage investment in climate-friendly projects â€” to meet commitments with buyers to deliver offsets.
Certified Emission Reductions reached a 12-week high of 43 European cents ($0.56) in London on Monday but the contracts are still down 91 percent from a year ago due to an oversupply, Bloomberg says.
In October,Â carbon-trading companyÂ Orbeo warned thatÂ prices for United Nations emission credits couldÂ drop to almost zero. At the time, investors wereÂ dumping Certified Emission Reductions, Bloomberg reported.
According to analysis byÂ Orbeo senior manager Dorothy Denis, CER pricesÂ could rise to between $13 and $26 a metric ton after 2015 if some carbon markets are linked as part of a global agreement.
The volume of carbon traded globally will grow by 14 percent this year, reaching 12 gigatons of carbon dioxide equivalent despite depressed prices, according to analysis released in March by market intelligence firm Thomson Reuters Point Carbon.
Most of this yearâ€™s growth in volume will come from the 10 billion EU Allowances that will change hands this year, up 40 percent from 7 billion last year, according to Point Carbon.Â Current price volatility is also driving persistently high levels of speculative trading.
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