The Carbon Markets Have Spoken: No Treaty In Copenhagen
The European carbon markets have declared a verdict on the Copenhagen climate summit: there will be no meaningful treaty.
Reuters reports that prices for permits under the EU’s Emissions Trading Scheme (ETS) have remained stable, at prices between 12 euros ($17.98) and 15.50 euros ($23.22) a tonne, for the last six months.
Prices will likely go up when and if a new deal is reached on greenhouse gas emissions.
Permits were trading at 13.60 euros on Wednesday and are likely to remain in that range, analysts say, because companies have decided on their permit needs in advance of Copenhagen.
Deutsche Bank’s Mark C. Lewis said:
“Expectations are low for Copenhagen. Unless there is a very big failure, it will not have a negative impact on prices.”
But, given the economic downturn and the decreased demand for products such as steel and cement, companies will likely sell off their permits in the next few months causing the price to drop to about 8 euros.
The pessimism on Copenhagen is settling in despite Independent Sen. Joseph Lieberman’s claims that he, Democratic Sen. John Kerry and Republican Sen. Lindsey Graham, will be able to establish a viable framework for a climate change bill before the Danish summit.
