Carbon Prices No Likee Copenhagen Result
Not only world leaders, United Nations delegates and environmentalists were disappointed in the weak accord reached in the 11th hour of the Copenhagen climate talks — the markets for carbon allowances didn’t like the deal either. Bloomberg is reporting that on the first day of trading since the accord announcement, European and UN carbon prices have seen their biggest drop since February because of the vague and unsubstantial outcome. Businesses and investors — which showed up in unusual force over the two weeks of the convention — were looking for more aggressive, if not legally binding, agreements that would provide clarity for the carbon markets, help put a solid price on carbon and give support for clean energy-related business plans.
Bloomberg says the European Union carbon-dioxide allowances declined as much as 8.7 percent on the European Climate Exchange in London, and the UN’s Certified Emission Reductions credits fell as much 7 percent, the most since Feb. 20. Henry Derwent, president of the International Emissions Trading Association called Copenhagen “a step backward” for signals that will support carbon prices, says Bloomberg.
The Wall Street Journal put it more bluntly. The intro to their piece:
The agreement achieved at the Copenhagen climate summit leaves business leaders around the world close to where they began, facing uncertainty about how environmental policy will affect their costs and decisions about investments.
As David Blood, the lesser known partner that makes up the “Blood and Gore” of investment management group Generation Investment, said early on at the Copenhagen summit, a strong treaty could have limited uncertainty for the business community, unleashed capital and innovation, and provided long term goals for a sustainable economy. The role of private capital in fighting climate change will be massive: Many estimate that three fourths of the trillions of dollars needed to remake the world’s energy infrastructure will come from the private sector.
But as Shai Agassi, founder and CEO of electric vehicle infrastructure company Better Place, told me at the sidelines of the Copenhagen event last week, businesses have been investing in clean energy and energy efficiency without that clarity before the conference and will continue to do so even with a weak accord. And now that there is an agreement that falls short business leaders are pointing for the need for stronger domestic policies to make up for the lack of international clarity. Lew Hay, chairman and CEO of FPL Group, points to the potential of the EPA endangerment ruling: “The Environmental Protection Agency is going to regulate greenhouse gas emissions whether there’s an international agreement or not.”
Image courtesy of UN Climate Talks Flickr Creative Commons.
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Not a very appropriate title for an otherwise good article
I’m guessing you guys at Earth2Tech don’t understand the racial undertones of your headline. That’s offensive to Asian-American people, just so you know. It’s making fun of the way Asian immigrants speak. I’d change it quickly if I were you.
The drop in EU carbon prices is a foretaste of what’s to come following the failure of Copenhagen. Unless individual countries set emissions standards to promote cap-and-trade policies, carbon emissions will rise and alternative energy projects will fail.
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