EU Policy Makers Determined to Reform Carbon Market

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Jan. 08 (Bloomberg) -- Bloomberg’s Konrad Hanschmidt reports on the outlook for carbon markets in 2014. He speaks on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

Drop in the overall global market trading and only 40 billion euros of carbon credits changed hands.

That is less than half of the peak in 2011 when the trading value was about 100 billion and about a third less than it was in 2012. the main reason for that is a big drop-off in prices in key markets.

If you look at the queue to offset markets, prices collapsed to nearly zero.

If you look at the european market, the price was about 10 euros per ton to five euros per ton.

Some of that, the loss was limited by an increase in trading volumes which was a positive side to the market.

2014, any better?

Europe will be taking all the weight on.

It will be the main market.

Policymakers are determined to reform the markets and they will probably take on a decision today to significantly cut the supply.

That will increase prices again by approximately 50% this year.

As a result, we will see an increase in the global market value up to around 46 billion next year and potentially a bit more in the subsequent years.

So things are improving but only a little bit.

What will it take for this story to really take off, to get back to the idea we first started with?

I think climate policy overall has to be picking up.

It might happen more on a country level than a global level.

We are seeing markets in asia, south korea will launch its heart and market next year.

North america is making progress as well.

We need to see a more bottom-up carbon market initiatives and more credibility to the market as well.

Europe is reforming its carbon market, making it more credible, decreasing the supply and also making it more flexible to the overall economic system.

If we get more bottom-up systems

This text has been automatically generated. It may not be 100% accurate.

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