State of the Voluntary Carbon Markets 2010 The year of 2009 was a tumultuous one for the voluntary carbon markets. First, the economic recession had a marked impact on the number of companies offsetting greenhouse gas (GHG) emissions. At the same time, unfolding new climate legislation in the United States led the actors in engaged in the voluntary carbon markets up with an interest in generating credits viable under new compliance programs through highs and lows.
The Coalition offers its alternative to the CPRS, but it needs to come up with something better The Coalition’s direct-action climate policy claims to achieve a 5% reduction in emissions by 2020 at a fraction of the cost of the government’s CPRS. This conclusion however appears to be based on flawed analysis. Our figures show that the CPRS would actually be more cost-effective than the Coalition’s proposals, costing less than A$1.5bn over the first four years in contrast with A$3.4bn under the Coalition’s plan.
US MAC curve: A fresh look at the costs of reducing US carbon emissions New analysis from Bloomberg New Energy Finance on the cost of reducing CO2 emissions in the US shows that some previous estimates of abatement costs have probably been too optimistic. To achieve a 17% reduction on 2005 levels by 2020 entirely within the US would make use of some “early wins” in energy efficiency and land-based measures, but would then require more fundamental changes to the power and transport sectors. Overall however, the costs should be affordable and can further be reduced by the use of international offsets.
Impact of the EU ETS on power sector investments - a survey of European utilities Several studies have shown that the EU ETS is affecting daily operating decisions of European power companies, encouraging them to run a cleaner fleet. The acid test however is whether the scheme is able to affect long term investment decisions. The results from our survey of the largest EU power companies show that the EU ETS is indeed starting to change capital investment decisions in the European power industry.
Utilities alone do not have the risk appetite to underwrite the EU ETS One theory for the recent price rally is that utilities are buying up surplus EUAs to take advantage of low prices and to bank them into Phase III when they will be faced with having to buy their allowances in auction. The analysis in this Note shows that whilst forward hedging is a normal activity for utilities there is little evidence of over-hedging, and that they are unlikely to have sufficient risk appetite to warrant further price increases.
Global Carbon Quarterly Q3 2009 With the worst of the financial crisis now firmly in the past, politicians may be forgiven for believing that life will get a little easier. Many however are finding that managing an economy out of recession was less taxing than the decisions they now face on how to tackle climate change – commitments to reduce emissions made in the next year will have profound and long lasting effects on their economies. In spite of the difficulties, governments are showing some signs of wanting to come to an agreement, but with such high stakes they are being very cautious and taking their time.
Voluntary Carbon Index, March-April 2009 The voluntary carbon market continues to struggle this year, both in terms of prices and trading activity. This is largely due to a demand glut as a result of the global economic recession and an oversupply of voluntary credits caused by the bureaucratic delays that plague the Clean Development Mechanism (CDM) approval process. New Carbon Finance’s Voluntary Carbon Index decreased by 6% from Jan/Feb price levels (from $5.2/t to $4.9/t). Prices do, however, seem to have stabilised after their precipitous decline earlier in the year.
State of the Voluntary Carbon Markets 2009: Fortifying the Foundation The first State of the Voluntary Carbon Markets report was launched in 2007 with the goal of “shining a small light into the black hole” of information surrounding the voluntary carbon markets. Three years later, we are pleased to present this ongoing bird’s eye of view of the voluntary carbon markets landscape with more data to report, a greater percentage of the market captured, and a refined methodology. The aim of the report is to answer fundamental questions about transaction volumes, prices, project types, players, and—now with several years of data in hand—to elucidate trends in the marketplace over time.
Carbon market volume up 37% in Q1 2009 The latest analysis by New Carbon Finance shows that in spite of the global recession the volume of trading in the global carbon market in the first quarter of 2009 grew by 37% compared to Q4 2008. This was driven by increased volatility in the European allowance market coupled with the physical link up of allowance registries enabling the EU spot market to function. In terms of value however the market shrunk by 16% compared to the previous quarter due to the substantially lower prices seen across all carbon products.
Voluntary Carbon Index Jan-Feb 2009 The downward trend of voluntary carbon prices and transacted volumes during January and February indicates that the global economic recession has now also spread to the voluntary carbon market. Our New Carbon Finance Voluntary Carbon Index (VCI), which tracks over-the-counter (OTC) transactions on the wholesale market, decreased by 29% from Nov/Dec price levels.
Green Investing: Towards a Clean Energy Infrastructure The World Economic Forum released the Green Investing: Towards a Clean Energy Infrastructure report. The report outlines the scale of the investments needed to develop a clean energy infrastructure and move to towards a low-carbon economy.
New Energy Finance, which collaborated with the World Economic Forum on the report, warns that unless at least US$ 515 billion per annum is invested in clean energy between now and 2030, carbon emissions will reach a level deemed unsustainable by scientists, causing temperatures to rise by two degrees globally.
New Carbon Finance's Voluntary Carbon Index, November and December 2008 Throughout most of 2008, the voluntary carbon market experienced continued growth amid the progressive deterioration of the international financial system. The Voluntary Carbon Index (VCI), which tracks over-the-counter (OTC) transactions on the wholesale market, increased by 19% from July/Aug price levels (from $6.3/t to $7.5/t). The continued price support for voluntary credits comes mainly from the US pre-compliance market. However, even the voluntary market has not been fully shielded from the economic crisis and experienced a 14% decline in Nov-Dec from its high values in the previous two months.
State of the Carbon Market - Q3 2008 Our Q3 2008 analysis of the global carbon market shows that in spite of the global economic turmoil the carbon market has continued to grow. Although carbon prices have come off the highs in May 2008, liquidity remains strong and substantially above the levels seen in 2007. Meanwhile, although nine new funds have been created since the start of the year, total investment flows into the carbon market have substantially declined since 2007 in the face of uncertainty about post 2012.
The impact of auctioning on European wholesale electricity prices post-2012 This report has been prepared by New Carbon Finance for WWF to investigate how the introduction of auctioning in the EU ETS post 2012 is likely to affect power prices in four key European countries, Germany, Poland, Czech Republic and Hungary. Overall we conclude that the auctioning of allowances in the EU ETS market in 2013 and beyond is unlikely to
have a material impact on power prices.
Voluntary Carbon Index, July and August 2008 We are pleased to announce the launch of the first-ever price index for the over-the-counter (OTC) voluntary market: the NCF Voluntary Carbon Index (VCI). The VCI conveys prices at the project origination and wholesale distribution levels for offsets varying by standard and type. The VCI and the report forms part of our subscriber service dedicated to the developments in the North American carbon markets.
"Forging a Frontier: State of the Voluntary Carbon Market 2008" Over the past two years, numerous writers and analysts have likened the voluntary carbon markets to the “wild west.” In 2007 market trends highlight that this frontier has become a settlement zone. Customers are increasingly savvy about the opportunities and pitfalls in the carbon offset domain and stakeholders are aggressively working to forge the rules of the game and structures to enable smooth transactions. This second annual report gives a full picture of the status of the voluntary market in 2007 and is based on transaction data collected from 150 organizations, including project developers, wholesalers, brokers and retailers, selling carbon credits to voluntary buyers. It also includes transaction data gleaned from several carbon credit registries in the OTC market.
State of the Voluntary Carbon Market 2007: Picking Up Steam In the course of 2006 and 2007, interest in climate change, carbon offsets and the
voluntary carbon markets accelerated dramatically. And yet despite this interest, and the
fact that voluntary carbon markets have effectively been operating since 1989, quantitative
data surrounding this market has been sorely lacking. Because of this situation Ecosystem
Marketplace and New Carbon Finance teamed up to undertake the most comprehensive
analysis to date of the voluntary carbon market. The research has involved a wide ranging
survey with responses from over 70 organizations involved all stages of the supply chain
from developers, aggregators, developers and retailers, and covering five continents.
EU ETS Trading Decisions This report presents the results of a survey conducted by New Carbon Finance and CO2e.com in September 2006 on the trading behaviour of participants in the EU Emission Trading Scheme (EU ETS). The purpose of the survey was to better understand how the market is functioning in practice, with a view to anticipating how trading behaviour may affect allowance prices for the remainder of Phase I.
Carbon Funds Report New Carbon Finance publishes its inaugural report on Carbon Funds. This report provides a unique view of where and how money is flowing into the sector as well as the emerging opportunities and threats facing investors. Our analysis starts in 1999 with the creation of the World Bank Prototype Carbon Fund through to the more speculative funds supported with €billions of private capital. On the basis of this analysis we draw the following key conclusions:
