Washington, January 2012: Thomson Reuters Point Carbon

This year, the Western Climate Initiative (WCI) will overtake the Regional Greenhouse Gas Initiative (RGGI) as America’s largest carbon market and there will be a near doubling of carbon traded in the US, predicts Thomson Reuters Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets.

“For US carbon markets, 2012 will be an important year with several key policy decisions due and significantly increased volumes of trade expected as a result of two WCI allowance auctions and increased activity in the secondary market”, said the firm’s North American carbon market analyst Ashley Lawson.

Thomson Reuters Point Carbon thinks it likely that early auctions in California and Quebec will distribute some 24 million metric tons (Mt) of 2013 allowances in 2012 with the remainder of the approximately 180 Mt cap freely allocated to emitters or auctioned in 2013. “We foresee the primary market dominating WCI transactions in 2012, with a total market size of 28 Mt and a value of $392 million, up nearly tenfold from 2011 and overtaking RGGI as the biggest North American carbon market in value terms”, Lawson explained.

Thomson Reuters Point Carbon predicts that this year the total North American carbon market volume traded will be 179 Mt, with a value of $782 million, roughly double the 2011 volume and value. “The dramatic increase will be driven by the higher allowance prices in the WCI compared to RGGI’s”, Lawson underlined.

Lawson concluded “We do not expect North American federal governments to take up carbon market legislation as all eyes watch the November US presidential elections, but the regional programs will certainly push ahead”.

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