Hopes for $2 trillion global carbon market fade

According to Reuters, “Investors are becoming less convinced that a global carbon market, estimated to be worth about $2 trillion by the end of the decade, can be established as uncertainty over global climate policy persists.

The absence of legally binding global climate deal and a federal emissions trading scheme in the United States are standing in the way of the market in global emissions trading growing to achieve yearly turnover of $2 trillion by 2020.

“There will only be a $2 trillion market if the U.S. gets on board,” Trevor Sikorski, head of carbon research at Barclays Capital, told Reuters at a carbon conference in Amsterdam.

The market for carbon credits was worth around $136 billion last year, according to analysts Point Carbon.

Highlighting these fading hopes, a Point Carbon survey on Wednesday showed 61 percent of respondents said they expected a U.S. emissions trading scheme by 2015, down from 90 percent last year. They also predict a lower global carbon price of 31 euros ($41.92) a tonne in 2020, compared to 35 euros.

Carbon markets allow polluters to buy and emit carbon dioxide, blamed for global warming. Under such “cap-and-trade” schemes, companies or countries face a carbon limit. If they exceed that limit they can buy allowances from others.”

To read more, source: Reuters