Global carbon market expanded 80% to $60 billion in 2007: survey+

COPENHAGEN - Kyodo— The global carbon market expanded 80 percent in 2007 from the previous year to $60 billion, with the total traded volume growing 64 percent to 2.7 billion tons, according to a market survey report released Tuesday.

The strong growth in both value and volume indicates that a greater number of market participants believe the carbon supply-demand situation will become tighter in the future due to a shortfall in the supply of carbon available for trading, Point Carbon said.

The Oslo-based leading provider of analysis and consulting services on the global power, gas and carbon markets, received more than 3,700 responses from market participants to its survey.

Combined with its additional analysis, it presented an overview of the carbon market in 2007, an outlook for 2008 and expectations for the remainder of the first Kyoto period and beyond during an annual conference, which opened in Copenhagen on Tuesday.

Survey respondents on average expect the price of carbon traded under the European Union greenhouse gas emission trading scheme to climb from around $10 per ton at present to $37 in 2010 and to $54 in 2020, the company said.

The EU-ETS was introduced as the biggest multi-country, multi-sector greenhouse gas emission trading scheme worldwide in January 2005.

The survey also shows more than 70 percent of respondents believing that a climate agreement for the post-2012 period will be agreed on before the end of the Kyoto Protocol period.

"In Point Carbon's view, getting the United States on board will be vital for a new agreement. Interestingly, survey respondents do not necessarily agree, with about 77 percent expecting an agreement to be reached regardless of whether or not the U.S. participates," the survey firm said.

"However, more than half of respondents expect that the U.S. will take on reduction commitments and participate in a new agreement," it added.