The NY Times has the story: In Europe, Paid Permits for Pollution Are Fizzling
"More important, though, than lost jobs and diminished payouts for traders and bankers, the penny ante price of carbon credits means the market is not doing its job: pushing polluters to reduce carbon emissions, which most climate scientists believe contribute to global warming.
"The market for these credits, officially called European Union Allowances, or E.U.A.’s, has been both unstable and under sharp downward pressure this year because of a huge oversupply and a stream of bad political and economic news. On April 16, for instance, after the European Parliament voted down the proposed reduction in the number of credits, prices dropped about 50 percent, to 2.63 euros from nearly 5, in 10 minutes.
“No one was going to buy” on the way down, said Fred Payne, a trader with CF Partners.
"Europe’s troubled experience with carbon trading has also discouraged efforts to establish large-scale carbon trading systems in other countries, including the United States, although California and a group of Northeastern states have set up smaller regional markets.
"Traders do not mind big price swings in any market — in fact, they can make a lot of money if they play them right.
"But over time, the declining prices for the credits have sapped the European market of value, legitimacy and liquidity — the ease with which the allowances can be traded — making it less attractive for financial professionals."
Sunday, April 28, 2013
Subscribe to:
Post Comments (Atom)
Posts
1 comment:
"the penny ante price of carbon credits means the market is not doing its job"
I thought it meant that the market had in fact done its job; it's pushed companies to develop efficient ways of getting emissions below the levels that were stipulated. If stipulated levels were too high, that would seem to be something else.
Post a Comment