The volume of carbon dioxide (CO2) traded globally this year will increase by 20%, but the global carbon market’s value will drop by 32%.
According to Reuters, which has gained information from research group Point Carbon, 5.9bn metric tons of CO2 will be traded in 2009, compared to 4.9bn in 2008.
However, due to falling prices of carbon emissions, the global carbon market, which stood at €92bn last year, is expected to drop to €62.6bn.
The price of carbon permits, known as European Allowances, have lost over two thirds of their value since July 2008, and have almost halved in price since 1st January 2009, as participants have monetised assets in the economic downturn.
The European Union’s emissions trading scheme will continue to dominate the global market, with volume rising 24% to 3.8bn metric tons over the past year, mostly due to increased spot trade.
However, Point Carbon forecast its value will shrink by 33% to €45.2bn in 2009.
It’s report says that the US market is still expected to grow.
The Regional Greenhouse Gas Initiative, a group of 10 states in the US Northeast and mid-Atlantic which formed a cap-and-trade market, will take a 6% share of the global carbon market by the end of the year, as auctioning volume and secondary market activity grow.
Its second carbon permit auction in December pulled in nearly $107mn for clean energy projects.