Friday, August 15, 2008

Carbon Credits Undervalued For Phase II - IDEAcarbon's Global Carbon Report Shows Carbon Price At Odds With Market Drivers

Deutsche Bank said something similar in "You're Not Buying Enough Carbon Credits" Deutsche Bank".
From MondoVisione:

Latest figures from the summer issue of the Global Carbon Report, researched and published by leading market intelligence provider IDEAcarbon, suggest that carbon is currently undervalued in light of changing market fundamentals. July 2008 saw a dramatic fall in the price of carbon. The December 2008 price of European Union Allowances (EUAs) - credits allocated to installations in the EU covered by the EU Emissions Trading Scheme - fell by 25% from a high on July 1 of €29.33 to a low on August 4 of €21.21. The price of secondary CERs - credits produced by Clean Development Mechanism (CDM) projects in developing countries - fell by almost 20% over the same period.

However, IDEAcarbon's Global Carbon Report suggests that, although a correction was necessary, this low price is at odds with other factors at work in the market, such as supply and demand.

Firstly, little has changed in terms of the supply pipeline since the last market review. In March IDEAcarbon estimated that the CDM would produce 1.6 billion credits (1.6 GTCO2e) by the end of 2012, with Joint Implementation (JI) projects adding a further 90 million tonnes to the supply.

It is unlikely that the entire 1.69 billion credits will be offered to the market during the 2008 - 2012 period. Investors are likely to bank a portion of the credits in order to sell in the post-2012 market if they feel this offers better prospects....MORE

Sir Nicholas Stern, who made an appearance in the post below, "Not "After Gutenberg": Nooooo" is vice-chairman of IDEAcarbon's parent, IDEAglobal. We had some links in

Yee haw!
Sir Nick is vice-chairman of IDEAcarbon's parent, IDEAglobal*.
From Research Recap:

IDEA Carbon today launches The Carbon Ratings Agency, “the world’s first independent carbon credit ratings service.”>>>MORE