EU carbon price tumbles to new low

The only way is down…

As if the European financial crisis wasn’t bad enough. Not only is GFC Mark II just around the corner, courtesy of a US debt of over $15 trillion, the sound financial management of Greece, Italy, Ireland, Spain, Portugal, etc etc, but also, thanks to Julia Gillard’s pointless carbon tax (AU$23 per tonne, rising each year thereafter), Australia’s competitiveness at a very difficult time will be severely compromised in the global economy, as European carbon prices enter free fall:

European Union carbon permits and U.N.-backed credits collapsed to record lows on Thursday, extending this week’s sharp price slide as fears of a slowing economy sapped demand in the markets that are heavily supplied with emissions units.

It was also a signal that market participants are losing confidence in the flagging EU carbon market, the world’s biggest cap-trade scheme, traders and analysts said.

This latest crash could not have come at a worse time. In just a few days a U.N. climate summit in South Africa will resume work on a new globally binding pact to cut emissions.

Investors are already nervous about the future of carbon markets, given the uncertainty around when a new climate pact will emerge and what trading mechanisms will operate under it.

“Confidence is at an absolute minimum. It’s the macro-economic picture and the whole sentiment is not too good,” said a carbon trader at a financial institution.

Front-year carbon permits called EU Allowances (EUAs) closed 6.6 percent lower at 7.91 euros ($10.54) a tonne, after touching an all-time low of 7.80 euros earlier.

“There’s room to go down to 7 euros,” said Matteo Mazzoni, carbon analyst at Nomisma Energia in Italy, adding that 7.70 euros could be the next support level.

Some 11,000 power generators and industrial plants from 30 European countries take part in the region’s emissions trading scheme. It covers around half of the bloc’s carbon emissions.

Benchmark U.N.-issued carbon credits, which come from accredited emission reduction projects in developing countries, closed down almost 8 percent at 5.43 euros, after hitting a new record low of 5.30 euros.

FREEFALL

Carbon prices have shed more than half their value since June, as the euro zone’s worsening debt crisis choked demand for emissions permits.

The EU carbon market is also oversupplied with hundreds of millions of permits, and some analysts don’t expect demand to outpace supply until 2020.

“The oversupply seems to be overwhelming,” the trader said. (source)

Demand won’t outpace supply until 2020 – meaning that if the carbon tax survives that long (highly unlikely), Australians will suffer at least three years of a fixed carbon price far greater than that in the EU, and then a market-based trading scheme which will have a price floor of $15 from day one.

Hello? Julia and Greg? Are you receiving any of this? This Labor government sure know how to screw a country. Their own.

Comments

  1. Aaron James Duff via Facebook says:

    Does anyone realize every plant on this planet needs Carbon Dioxide to survive?

  2. Does anyone realize this Carbon Tax to save our planet is a Governmental con job?…. :P

    • Graham Richards says:

      It’s not just this government!!
      World wide it is the socialists/communists/marxists that are trying to impose this strangle hold on the world’s free markets.
      I don’t think anyone quite realizes how dangerous the Labor/Socialist party is. They will for ever damage this countries economy in the name of ‘redistribution of wealth’.
      What happens when there is no longer any wealth to ‘redistribute’??

  3. Good thing Goldman Sachs can resell them here for a nice little profit.. Thanks Juliar! Also hope they like the extra Super contribution we are forced to loose… ;) That extra 2% is fiated out 100%+ into the market casino for them to play with…

  4. Glen Balmer via Facebook says:

    As long as you’re not in an Industry “Union secretly controlled and no-checks allowed” Super Fund — ie, the non-industry funds will blow your money on the stock market, the industry funds blow your money on god-only-knows.

  5. Lee Lakai via Facebook says:

    Does anyone realize humans need Carbon Dioxide to survive? Hypocapnia (CO2 deficiency) and Hyperoxia (oxygen toxicity)!

  6. I await the day when someone foolish, suspends rational thought, and tries out the argument that Europe must be doing well with its “transition to a low carbon economy” because, supply outstrips demand for carbon credits… who will be first, I wonder, Bob Brown, or Sarah Hanson-Young, or maybe the PM. I’m guessing it won’t be Tim “take the money and run” Flannery because he seems to have gone suspiciously quiet, and I don’t think even he is that silly…

  7. @lee indeed…alarmists dont know this because they have been fooled in to “believing” co2 is pollution. co2 actually regulates breathing…and alarmists need to understand what is happening to someone who uses a bag to breathe in and out of without refreshing the air in the bag… in studies using brain scans of childrem on an oxygen rich supply had elevated areas of brain activity that left unchecked would damage the brain. researchs found that adding similarly small amounts of co2 to the air oxygen rish supply restored to normal activity these areas in the brain…

  8. @lee indeed…alarmists dont know this because they have been fooled in to “believing” co2 is pollution. co2 actually regulates breathing…and alarmists need to understand what is happening to someone who uses a bag to breathe in and out …of without refreshing the air in the bag… in studies using brain scans of childrem on an oxygen rich supply had elevated areas of brain activity that left unchecked would damage the brain. researchs found that adding similarly small amounts of co2 to the oxygen rish supply restored to normal activity these areas in the brain…

  9. Is it not only the price that is going down, it is also the trading volume that is heading down. Now the volume is just a few percent of what it used to be a year ago.

    http://www.bluenext.eu/statistics/graphs.html

  10. 0073.txt Phil Jones sends email to UEA staff about carbon trading:

    http://www.ecowho.com/foia.php?file=0073.txt&search=carbon+trading

    How is this not conflict of interest?

    http://blogs.nature.com/news/2011/11/european_carbon_market_plummet_1.html

    If you’re a scientist, not a market trader, you might hope this will have little direct effect on research. But if today’s low prices persist for a few more months, they will slash billions of euros from a European fund dedicated to clean energy projects. That’s because the fund, named NER300, is about to raise its cash by selling 300 million carbon credits on the ETS. Eight carbon capture projects and 34 renewables projects were set to benefit from the money. But at current prices, the sale would raise only €2.1 billion, instead of the €4.5 billion hoped for when the fund was proposed. Sales of the first 200 million carbon credits are due to start in December, and continue for the next 10 months, says Stig Schjølset, head of EU carbon analysis for the consultancy firm Thomson Reuters Point Carbon.

  11. Brian Freeman says:

    I am not a business person or an economist, so I feel something of a whoosh as all of the above rushes by up on high. However, I am not an idiot either and it seems to me with only wits to go on that carbon trading is such an artificial thing as to be laughable. It is a sandcastle built on a house of cards. When the tide comes in it will all disintegrate into a soggy mess.

  12. Climategate 2.0: New E-Mails Rock The Global Warming Debate

    A new batch of 5,000 emails among scientists central to the assertion that humans are causing a global warming crisis were anonymously released to the public yesterday, igniting a new firestorm of controversy nearly two years to the day after similar emails ignited the Climategate scandal.

    Three themes are emerging from the newly released emails: (1) prominent scientists central to the global warming debate are taking measures to conceal rather than disseminate underlying data and discussions; (2) these scientists view global warming as a political “cause” rather than a balanced scientific inquiry and (3) many of these scientists frankly admit to each other that much of the science is weak and dependent on deliberate manipulation of facts and data.

  13. Abner Yokum via Facebook says:

    Carbon market, carbon prices, carbon taxes, carbon credits? Stop it! You’re suffocating us! What’s next, an oxygen tax?…. Joe Schaller USA

  14. The EU carbon price shouldn’t take long to reach the last Chicago Carbon Exchange price of 5 cents. Gillard will soldier stupidly onwards though.

  15. Bumper sticker seen recently:

    If Julia is the answer how stupid was the question?

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