Carbon market to be worth €63 billion in 2008 – Point Carbon
London, 28 February: Oslo-based analysis company Point Carbon predicts that the global carbon market will grow by 56% this year compared with 2007, with 4.2 billion tonnes of carbon credits traded. Based on current prices, this will value the market at €63 billion ($95.1 billion).

The EU Emissions Trading Scheme (ETS) will again account for the largest share of the market, and could be worth €46 billion by the end of the year. Increased allowance auctions and a surge in the options market will help boost volumes in this market, said Point Carbon. The EU ETS accounted for €28 billion in trading in 2007, the firm estimates.

The market for Kyoto Protocol projects will be worth €15.4 billion, with €15 billion – equating to 1.2 billion tonnes – from the Clean Development Mechanism (CDM). This is up from 947 million tonnes in 2007, with a value of €12 billion. But Point Carbon expects the number of credits bought directly from CDM projects to shrink, while secondary transactions of CDM credits will grow this year.

The Joint Implementation market will account for the remaining €400 million, with expected volumes of 50-57 million tonnes, based on current prices of €7-8/tonne.

Other markets, such as the emerging Regional Greenhouse Gas Initiative in the north-east US, that for Kyoto Protocol Assigned Amount Units and the trading of offsets in the US, Canada and Australia will amount to some €1.5 billion this year, said Point Carbon.

The figures, derived from a mixture of publicly available data and Point Carbon’s proprietary data, appear in the firm’s Outlook for 2008 report.