Is carbon trading dying?

Just looking at the various carbon markets price action and they are all shitting the bed.CCA's, EUA's, LCFS, RGGI, and the voluntary market (CME: NGO, GEO) are all down in both price and volume.Looking for thought on the current state of the broad carbon markets.

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SkewYou

Just looking at the various carbon markets price action and they are all shitting the bed.CCA's, EUA's, LCFS, RGGI, and the voluntary market (CME: NGO, GEO) are all down in both price and volume.Looking for thought on the current state of the broad carbon markets.

energy security is above climate change policy. european countries have fired up coal power plants to supply power generation to grid. looking at this firms would ditch their net zero policies and thats affecting validity of carbon contract markets.

 
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My thoughts are this: a ton of shitty (literally) unecomonic renewable fuels projects were built based on the high trading prices of these credits they could monetize, these credits have a finite amount of obligated buyers so in a way demand is somewhat "capped" (until new regulations/standards are implemented as time goes on requiring more credits hence increasing demand) so now we have a ton of new projects online hence much higher supply of credits, simple economics means price of credits falls, then cycle begins as these uneconomic projects go defunct at low pricing markets, reducing supply and then prices come back up again. Low cost producers who can whether super low markets will be at a strong advantage if prices stay low, could be a lot of distressed projects needing rescue.  

could be completely wrong, just my thesis after 2 short years of some renewables banking. 

 

Do not equate “low prices” = “trading dying”. Yes while it is typically easier to trade and get volatility in a bull market plenty of people fight their way through bear markets.

EU crisis has made carbon credits less favorable there for now but it is an asset class as a whole that is still growing heavily, 

No one is rushing out to expand and build coal desks while every major bank/merchant has a renewables strategy and is looking at ways to improve carbon trading.

 

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