As per the Portuguese Esperanto Santo Investment Bank, reports “EUA carbon price will become 15 to 20 Euros by the end of the year”, if the new policies on restricting carbon permits is implemented.The new polices on carbon permits could raise the price of power, and profitability of hydro and nuclear plants, and it will also increase the chance of carbon credits rallying at higher rates. Currently, carbon credit is trading at 9 Euros as per benchmark EUA contracts, and according to analyst Lawson Steele, the price is set to reach a high by the End of the year.
EU politicians backed the proposal to provide an unspecified number of permits from 2013 and this will create the way for the EU to take part in the market, which will reduce the price – mainly caused by oversupply. The change in carbon price will be at least more than 5 Euros. Currently, EU permits are priced at €8.50 or $10.50 and the Australian carbon price has been fixed by the government at AUD 23 or $23.40.
The changing face of Voluntary carbon markets
The current government of UK hopes to reduce emissions by more than 10% by 2020 and it is believed that if the real targets are met, the government may further add new targets. In the UK, on April 2010, the government introduced the Carbon Reduction Commitment (CRC), which enforces companies to report and pay for emissions, and the target of CRC is 5,000 public and private organizations, which are held for at least 10% of the total emissions in the UK.
As per the current law, companies should manage and report their CO2 emissions, and if accurate reports are not delivered by the companies before 1 April each year, a penalty will be charged where the offender will have to pay £40 for one tonne of emissions. On 15 Feb. 2012, Exxon Mobil was charged a penalty of £2.7m for not reporting emissions as per the guidelines of European Union’s Emissions Trading Scheme (ETS).
In the UK, the CO2 emissions policies are being rigorously implemented and this is sending organizations under European jurisdiction. To reduce the reporting errors, new accounting procedures are used, which involves less wastage on filling the spreadsheets and it also involves paying more attention to completing progressive tasks. There are many companies unaware of the multi-national emissions and national emission related laws and hence, the need for trading at voluntary market arose.
In the last few years, the governments are accepting the status of voluntary carbon markets and the trend is shifting from disapproving to accepting it, as a valid market governed by specific rules and regulations. The governments are relying on voluntary markets for outsourcing climate offset projects and these markets also offer projects to gain experience.
This article has been written under the guidance of expertise that has the vast knowledge in alternative investment
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