From The Economist's Buttonwood column (7/5) comes an update on the CO2 markets in Europe:
The price of traded carbon-dioxide emission allowances in Europe—permits to pollute, if you like—has increased fourfold since January, touching €29.35 ($34.90) on Monday July 4th, a record.
The amounts involved are small—less than 1m tonnes a day, on the exchanges—compared with the 2.2 billion tonnes a year in European permits issued. But they have grown surprisingly quickly since Europe launched its emissions-trading system for carbon dioxide—the biggest of the Kyoto treaty’s six greenhouse gases—in January.
The rest of the article contains an explanation of pollution trading, an analysis of the market forces leading to rising prices, and the problems that Europe faces as it tries to go it alone with Kyoto (with a gentle jab at the U.S.).
Thanks for the lead on this article to swapBLOGic's Making Markets post (don't miss the reference to the Environmental Economics blog in last line!).
