Analyst: World carbon market doubles in 2008

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Further evidence emerged today backing up predictions that the carbon market will shrug off the worst of the economic downturn, as Point Carbon became the latest analyst firm to confirm that the global carbon market enjoyed record growth throughout 2008.

According to the latest figures from the company, the global carbon market doubled in size to €92bn (US$125bn) last year, while traded volumes soared 83 per cent year-on-year to 4.9 giga tonnes of carbon.

The release of the research comes just days after rival analyst firm New Carbon Finance reported that the global carbon market almost doubled to $118bn last year. It also predicted that the market would still enjoy a growth rate of 27 per cent this year, despite the slowing global economy.

The new Point Carbon study did not offer predictions for the scale of the market in 2009, but Endre Tvinnereim, senior analyst and author of the report, said that there were encouraging signs during the fourth quarter of the year that the sector could resist the worst impacts of the global recession.

“There was steady growth in traded volumes throughout 2008, with brisk EUA trading in the fourth quarter and high activity in the secondary CER market,” he said.

Veronique Bugnion, managing director of trading, analytics and research at Point Carbon, added that the rapid growth expected from new cap-and-trade schemes such as the recently launched RGGI scheme in the US meant that the outlook for the sector remained upbeat, despite the recent slide in carbon prices experienced by the EU emissions trading scheme. ”

“The fact that global carbon markets have now broken the 100 billion dollar mark is more than symbolic,” she said. “It represents a market that has doubled in size in an otherwise depressed environment. It is all the more remarkable since the prices of European Union Allowances have in fact dropped significantly in the past months.”