Global Carbon Markets to Reach Record Volumes By 2016 from Business Spectator. Carbon markets need a different measure than volume for success. Article cites a point carbon analyst expecting EU-ETS market value to increase by two thirds to 7.5 Euro per ton. Increasing value drives increasing volume, but what does it mean? Permits are rising again off the back of the enactment of back loading measures and the release of a clear schedule for withholding permits from auctions. The price increase is indicative of nothing more than irrational exuberance betting on irrational exuberance. With the EU-ETS still more than 1 billion permits long, the fundamentals for a real appreciation aren’t there. The real value of these permits remains near zero. Optimists might argue that this represents a first step by the EU and that the next step is that backloaded permits will be cancelled, or further permits will be withheld from the system. Given the two-year fight over pulling out less than half of the long permits out of the system, holding permits in hope of another policy breakthrough is bound to be a bad bet. Also, more is now riding on the permits than the EU-ETS. Europe has staked out 40% reductions for its 2030 targets. As Greenpeace has pointed out, 2.3 billion banked permits in the system means that only 33% reductions are required to meet that target. Would the Commission have settled on 40% rather than the less ambitions 30% or 35% targets in play if the escape valve of banked permits weren’t present? Perhaps they would have, but as this blog has pointed out before, bells-and-whistles climate policy has a way of making it easy for countries to take strong positions in name only.
U.S. Coal Exports Jump Three-fold Since 2005 from Oil Price. This is the entirely predictable result of falling coal consumption due to the shale gas boom. This announced just a day after a kerfuffle about Norway’s Store Norske opening a coal mine in its artic regions even as its sovereign wealth fund bans investment in coal companies. Robbing Peter to pay Paul is a nice way to appear current in sovereign carbon cutting; unfortunately given the global nature of carbon emissions, the collector will soon come around for us all.