Carbon Market to be worth $100 billion dollars

The global carbon market will be worth €63 billion (A$100 billion) this year, while traded volume will amount to 4.2 billion tonnes of CO2-e, up 56% on 2007, according to a report compiled by Point Carbon. Outlook for 2008 reported that the market for allowances in the EU ETS will be worth around €46 billion in 2008, with options and auctioning contributing to the increased volume. In the market for carbon credits generated by emissions reduction projects in developing countries through the Kyoto Protocol, Point Carbon estimated that the size of the market would grow to €12 billion this year, although the share of the primary market in this figure is likely to shrink, while the value of secondary transactions will grow strongly.

Point Carbon’s Carbon Market Research Team Manager Kjetil Roine, said there were several reasons why the global carbon market would grow this year. “Most importantly, the tightness of the phase two cap [of the EU ETS] is expected to increase the traded volume compared to 2007, simply because more players are short of allowances. The proposed EU climate and energy package of 23 January this year further strengthens this tightness,” Roine said. In total, carbon markets outside the EU ETS and CDM are predicted to see transactions worth €1.5 billion in 2008, the report predicted. These markets include among other the Kyoto Protocol’s JI mechanism as well as Kyoto’s governmental credits and the emerging RGGI in the US.