U.S. President Barack Obama said the climate-change accord he reached with China and most of the 193 attending nations on Dec. 18 was an “unprecedented” first step to slow global warming. Environmental groups such as Friends of the Earth called it a failure…
And the market says?
European and United Nations carbon prices fell the most since February after the Copenhagen climate accord didn’t set targets that would boost demand for permits.
European Union carbon-dioxide allowances for delivery in December 2010 declined 8.3 percent to close at 12.45 euros ($17.82) on the European Climate Exchange in London. Today was the first day of trading since the summit concluded Dec. 19.
The agreed targets in the Copenhagen deal amount to a “bunch of negotiation ranges” that investors had already factored in, Trevor Sikorski, an emissions analysts for Barclays Capital, said in a phone interview after returning to London from the Danish capital. “It seems to be below even our modest expectations.”
Both quotes from Bloomberg. Hat tip to Tyler in Nicaragua.
An important battle has been won. But the war against UN-sponsored evil will continue. To understand what happened in Copenhagen from a Gordon Tullock perspective read
http://volokh.com/2009/12/19/copenhagen-as-un-politics-not-climate-change-substance/
http://volokh.com/2009/12/21/the-climate-coalition-of-the-willing/
Rather than this global charade, could it be easier to sign one-on-one agreements with nations? At least those can be made more binding and enforceable….
Was any of the drop related to programs to verify the amount of CO2 reduction.
Knock offs decline in price if there are inspectors.
Don’t know. Just curious.
Funny to see those big “capitalist” getting pissed because we aren’t having enough carbon taxes for their taste. JP Morgan and Rockefller supported Trotsky and the Bolshevik revolution and now the same people are pushing global carbon taxes.
anon:
But economic theory predicts that bubbles will not exist, no matter how they may be created (and that includes government). If a government had facilitated the bubble, a rational market would have shorted it in 2000 in the form of CDS, MBS, etc., driving the price back to roughly today’s levels, despite government involvement. The only explanation for bubbles is that markets are not efficient.
I wonder how articles like How do I know China wrecked the Copenhagen deal? I was in the room will affect markets further.
In government consultant speak, this is “optics”
libert, your calculations look correct but I don’t know the details of the RGGI allowance program.
You folks might be interested in “”Carbon Futures Price A Cheese Danish” at http://www.aninvisiblehand.com…bottom line is the commons has to become quite tragic indeed before meaningful action will occur, and the markets know it.
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