Carbon prices predicted to sharp rise next year

       

Further reading

• State of the Carbon Market 2007 (57)
• The World Bank - State and Trends of the Carbon Market 2007 (45)

Now that prices are less than one € per ton, some are saying the ETS has collapsed. It is, however, too early to tell since there will be a new period beginning 2008 ending 2012 and the World Bank predicts a rise to 12€ per tonne in its annual report on Carbon Markets.

The project-based market is growing fast with a doubling to US$ 5 Billion in 2006, which is a doubling in one year. It is in the shadow of this market that the "Carbon Cowboys" operate.

The higher prices are necessary to boost the energy efficiency improvements that is, after all, the most necessary and valuable instrument to reduce the emissions. The IPCC report that was delivered today should be very explicit on just energy efficiency technologies and measures.

However, the type of projects, especially on CDM, still show a shortage of energy efficiency, which is not only a pity but a real problem if the renewable fuel projects instead are feeding an inflated demand. The IEA head Claude Mandil only recently said that a successful GHG-abatement depended to 78% (!) on energy efficiency improvements.