After finding some of the pros and cons of cap and trade carbon schemes in the US, several studies were recently published on the carbon market’s global bottomline: How much should energy-intensive industries pay for compliance?
According to market analyst Point Carbon, global carbon markets could be worth almost €2 trillion (USD $3.1 trillion), with total transaction volume forecast at 38 billion tonnes carbon dioxide equivalent (Gt CO2e) per year by 2020.
Around 67% would be traded within a US emissions trading scheme (ETS), said Point Carbon, while the second largest ETS, the EU scheme, would occupy 23% of the global market.
World Bank reported the global carbon market more than doubled last year to a whopping US$64 billion (€47 billion). The value of EU ETS last year was said to have doubled as well to around $50 billion. World Bank, however, noted that the market is said to be lagging from its full potential because of projects leveling off in developing countries.
In a study by Carnegie Mellon researchers, the short-term effects of implementing a $35/ton of carbon dioxide could cut as much as 10% of emission levels.
“Our findings indicate that significant reductions in CO2 can and would be observed in the near-term, even before more efficient power generation technologies are deployed on a wide scale.”
Don Dears of the George C. Marshall Institute is stating otherwise. He said that cap & trade legislation for CO2 emissions will be the largest hidden tax increase ever passed by Congress.
According to him:
“What would happen to the markets where billions of dollars in CO2 credits are being traded when it becomes apparent that CO2 emissions can’t be significantly cut? Think ENRON on a massive scale.”