There’s a less-than-jubilant atmosphere at the carbon market conference under way in Amsterdam this week, at least judging from the tone of some of the reports.
The conference, run by independent research firm Point Carbon, was no doubt scheduled with Copenhagen in mind – it comes some 10 weeks after the climate change meeting finished. Whether such a grim backdrop was expected back then is anyone’s guess. Not only did Copenhagen fail to get a binding agreement, but the US this week looks further than ever away from legislating for a cap-and-trade system that was once the great hope of the carbon market.
Point Carbon’s own annual survey* shows how much sentiment has changed in the past year:
Among our respondents, 37 percent expect a global deal in Cancun, against 59 percent for Copenhagen in last year’s survey. The lowered outlook is linked to the general dissatisfaction with COP-15, as 70 percent reported being were either “very dissatisfied” or “dissatisfied” with the Copenhagen outcome.
However, despite the change of tone there was little evidence that carbon mitigation efforts were going backwards – particularly in the Clean Development Mechanism (CDM), a Kyoto protocol scheme used to generate carbon offsets, often in the developing world.
Firstly, a majority of the 368 respondents from companies covered by the EU ETS said the regime had already caused emissions reductions in their company – the number was up to 54 per cent compared to high 40s for the past three years. And reports of explicit carbon leakage continued to be low, with 84 per cent of those same respondents saying that moving operations offshore to avoid carbon pricing wasn’t even considered.
Secondly, even though there was a marked increase in pessimism over the question of demand for CERs (the units generated by CDM projects) after 2012, most respondents from companies involved in the EU ETS, CDM, JI and RGGI markets said they planned to keep (46 per cent) or expand (29 per cent) the number of staff involved in carbon trading. That was barely changed from last year.
So, the industry as it stands now – mostly, the EU ETS and existing offset approval schemes – isn’t exactly in crisis. It’s just that the hoped-for boom has failed to materialise.
Related links:
Hopes for $2tn carbon market fade (Reuters)
Carbon emissions without cap-and-trade (FT Energy Source)
Cap-and-trade: Perennially unpopular (FT Energy Source)
*We should point out that the broad set polled for this particular question was not a controlled group; the 4,767 respondents were either invited to join or opted in via Point Carbon’s own website. Subsequent questions we referred to were limited to subsets of survey respondents.
