1 / 13

Alexandre Kossoy Philippe Ambrosi

Alexandre Kossoy Philippe Ambrosi. 2010: Overall market stalls. (in billion US$). 144. 142. 135. 63. 31. 11. 0.7. A global market driven by the EU ETS. CDM market value halved again. CDM activity declined markedly reduced compliance needs due to slow economic recovery

corin
Download Presentation

Alexandre Kossoy Philippe Ambrosi

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Alexandre Kossoy Philippe Ambrosi

  2. 2010: Overall market stalls (in billionUS$) 144 142 135 63 31 11 0.7

  3. A global market driven by the EU ETS

  4. CDM market value halved again CDM activity declined markedly reduced compliance needs due to slow economic recovery uncertainty re: post-2012 rules less origination activity as buyers seek predictable credits and less projects competition with AAUs and secondary CERs Following lower demand by EU ETS Segmentation due to qualitative restrictions (ban of CERs from industrial gases) Risk allocation reflects buyers’ market Catalytic role of CDM & JI disappears without post-2012 clarity CDM value(US$ billion -12% -59% -46%

  5. Balanced market: 2008-12 2,525 MtCO2e Residual demand of 136 MtCO2e, mostly from EU governments AAU • Demand: 1.39 billion tCO2e until 2012 • Supply: 1.33 billion tCO2e contracted • 1.09 billion CERs & ERUs contracted (risk-adjusted) • 245 million AAUs contracted • Residual demand of only136 MtCO2e • Aggregate picture; not all buyers contracted the volume they need 1,392 MtCO2e 1,330 MtCO2e CDM & JI AAU CDM & JI Contracted (nominal) Contracted (risk-adjusted) KM Demand2008-12

  6. Supply Demand until 2012 (data in the S&T report) Most offsets w/ priv. sec.

  7. Market projections indicateconstrained demand over 2013-20 MtCO2e Maximum demand (conservative scenarios) Low High *Including Iceland, Liechtenstein, Norway, and Switzerland ** Australia, New Zealand and United States

  8. Potential supply 2013-20 (data in the S&T report)

  9. Potential demand 2013-20(data in the S&T report) (1.7-750+800) (2.2-750+1.1)

  10. A complex regulatory and policy scenario is affecting the market 2010 saw regulatory ups: Progresses in Cancun & EU commitments until 2050 And downs… EU ETS loopholes & oversight, security issues Politically, a number of opportunities were missed: U.S., Japan, Australia, Republic of Korea While others gained traction: California, developing countries such as Brazil, Chile, China, India and Mexico. New initiatives signal that solutions to the climate challenge will emerge.

  11. Still, let’s step back and look outside the box Cumulative CDM credits transacted of 2.3 bln tons CERs in 2002-2010 … … which is the annual size of the EU ETS (40% of EU emissions) today … and 75% of Kyoto’s total ER targets (~3 bln tCO2e over 2008-12) … resulting in US$27 bln (and benefiting to more than US$100 bln in low-carbon investments - mostly private sector) … … which is in the same level of magnitude of the Green Climate Fund pledged by Parties in Cancun … at long-term average price of $10-$15 per ton … … which is much lower than the marginal abatement cost for developed countries to reduce emissions through domestic measures only Depending on ambition of collective action, carbon flow to developing countries by 2020 could, at prices of US$20-30, can reach US$30-50 bln … … vs. all RE investments to developing countries of US$77 bln in 2010 (US$143 bln in total and up 12-fold since 2004)

  12. Full report available atwww.carbonfinance.org Thank you

  13. 2011: Recent developments in the C-mkt “2011 is turning out to be a very noisy year“ for commodity markets: Political turmoil in the Middle East, Japanese earthquake and nuclear crisis at Fukushima, Phase-out of the German nuclear capacity (closure of 8.4 Gw), European Union (EU) sovereign debt crisis (double-dip recession?), The US credit downgrade. Translating into a very nervous carbon markets: Secondary market: July: record options contracted (i.e., high volatility), August volumes at second highest monthly levels ever ~800MtCO2e (180Mt CERs), August prices close to historic all-time low of February 2009. Primary market (post-2012): Development of deals previously originated; few new origination, Strong conditionality clauses (right of first refusal ?), Preference for floating prices (at 70-95% sCER at delivery); Fewer fixed-price deals in the 5-8 Euro range (most below 7.5 Euros), Illiquid market leads to lack of transparency and wider range of prices.

More Related