Isra-Mart srl:Point Carbon: Global market inches up one per cent in 2010

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The global carbon market grew just one per cent last year to €92bn (£77.4bn), according to new figures from Point Carbon that reveal how the sector was hit by the failure of the US Congress to pass emissions trading legislation.

The latest report from the analyst confirms that higher average prices for carbon credits of €13.10 per tonne allowed the global market to expand, despite total transaction volumes which fell 12 per cent year on year.

The EU's emissions trading scheme (ETS) continued to dominate the sector, with the value of the market increasing four per cent to €72bn despite total trading volumes falling four per cent to 5.2 gigatonnes.

The value of the UN-backed Clean Development Mechanism carbon offset scheme similarly climbed three per cent to €18bn despite contracting volumes that were down five per cent.

However, gains were offset by the collapse of the US-based Regional Greenhouse Gas Initiative (RGGI) regional emission trading scheme, where traded volumes fell 76 per cent during 2010 as participants realised that the failure of the proposed climate bill last summer meant it will not be able to integrate with a national cap-and-trade scheme in the near future.

"What affected market volume the most in 2010 was a non-event, as US cap and trade was put on ice," said Endre Tvinnereim, senior analyst and author of the report. "This removed a lot of interest in the RGGI market, which accounted for 10 per cent of total volume in 2009."

However, he insisted that the long-term trends for the sector remain promising. "The global 2010 volume is nine times that seen in 2005, when the first phase of the EU ETS began, and 43 per cent higher than in 2008, the first commitment year under the Kyoto Protocol," he said.