Carbon market takes a hit after summit
TEXT OF STORY
Bill Radke: European markets have been reacting to the outcome of last week’s climate change summit in Copenhagen. As Marketplace’s Stephen Beard tells us now, the so-called “carbon market” is taking a hit.
Stephen Beard: The market trades in carbon allowances and is supposed to be a key weapon in the fight against climate change. European Governments have capped the level of carbon that many companies can emit. If some companies want to emit more, they have to buy allowances from other firms that don’t need them.
When governments get really tough on carbon, those allowances will get a lot more expensive. This morning, they got a lot cheaper. They fell in early trading by 8 percent, having fallen by 6 percent at the end of last week.
Trevor Sikorski is a carbon analyst with Barclays Capital. He says the market has decided the Copemhagen Summit was a failure:
Trevor Sikorski: The accord is very weak. It doesn’t have any detail. It’s only two pages long. You know, it’s almost nothing.
He says any hopes that the price of carbon allowances would rise sharply in the short term making it more expensive to pollute, those hopes have have been dashed after Copenhagen.
In London, this is Stephen Beard for Marketplace.
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