Did You Know That You Can Trade Carbon Emissions?

The recession brought with it a slowdown in industrial production, and that has translated into far fewer greenhouse gas emissions in 2009 than in previous years.

But behind the numbers there are some critical questions like: how should policymakers measure the effectiveness of the system in reducing emissions when so much of the decline last year was attributable to economic factors, rather to any changes in the way people generate or consume energy?

A more immediate question is how the downturn will affect the price of permits representing tons of carbon dioxide traded on markets like the European Climate Exchange in London and BlueNext in Paris.

Two sectors to watch closely on Thursday are steel and cement. Companies in both of these sectors already have huge amounts of surplus permits they did not need to use because of the downturn.

In particular, it was “unclear whether the relationship between production and emissions is the same in a growing industry sector as it is in a massively decreasing, in some cases even collapsing, one,” she said. “So from this perspective the verified data will provide a unique insight into the relationship between downturns and emissions.”

Filed Under: Environment