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Trading Carbon : December - January 2011
Is it fair to say it has not been a good year for carbon trading? Carbon prices in the EU hover at about ¤10 ($13.5) a tonne of carbon dioxide -- down from about ¤15/t a year ago -- on the back of declining economic figures and an oversupplied market. And analysts continue to slash their forward price predictions. The start of the year saw the EU Emissions Trading Scheme hit by yet another scandal, as millions of euros worth of allowances were stolen from registry accounts. This added to value-added-tax fraud from the previous year has provided detractors of emissions trading with valuable ammunition. More recently, the Carbon Markets & Investors Association changed its name to the Climate Market & Investors Association. The main reason given for the change of title was the lack of progress on the policy front for carbon cap-and- trade schemes. At the UN-level, we are no nearer a new global deal to combat climate change than we have been for the last 10 years. And this year's high-level meeting in Durban is not likely to change that scenario. As 2012 approaches -- the final year of the Kyoto Protocol's first commitment period and EU ETS's second trading period -- carbon markets are certainly not where we would have hoped they would be by now. In an ideal world, we would be preparing for the start of a global scheme agreed at the UN climate change negotiations Of course, that is not to be. But perhaps the picture is not quite as bleak as some people have made out. Australia has just passed legislation that will result in an ETS from 2015 and California recently finalised its cap-and-trade rules for a 2013 start. Add to that, the possibility of South Korea in 2015, a wider Western Climate Initiative market in North America, possibly from 2013, pilot schemes in China, and World Bank money prompting action in several other developing countries, things do start to look a little brighter for carbon trading. Experience from the EU ETS and from proposals that have fallen away, such as for a Federal cap-and-trade scheme in the US, will temper too much optimism until other scheme's get up and r unning, however. Whatever happens in the future, this editor will endeavour to cover any new market developments in a timely manner and keep up with activities in existing markets. l Managing editor Andrew Allan Editor Robin Lancaster Deputy editor Susanna Twidale Commercial manager Michelle Thorby Art editor Matt Hadfeld Contributors Rory Carroll and Michael Szabo Editorial enquiries T +44 (0)1943 605279 T +44 (0)20 7017 2884 Sales Michelle Thorby email@example.com T +44 (0)20 7017 2875 Trading Carbon Thomson Reuters Point Carbon Second Floor 102--108 Clerkenwell Road London, EC1M 5SA United Kingdom T +44 (0)20 7017 2875 F +44 (0)20 7253 7856 Cover illustration Reuters A Thomson Reuters Point Carbon publication copyright © 2011 All rights reserved. No portion of this publication may be photocopied, reproduced, scanned into an electronic retrieval system, copied to a database, retransmitted, forwarded or otherwise redistributed without prior written authorisation from Thomson Reuters Point Carbon. Breach of these terms is illegal and punishable by fnes of up to €50,000 per violation. See Thomson Reuters Point Carbon's "Terms and Conditions" at www.pointcarbon.com. ISSN 1756-1655 Trading Carbon is printed on recycled paper editorial Robin Lancaster, Editor firstname.lastname@example.org 01 COMMENT Dec 2011/Jan 2012