Carbon Credit Market Imploding: CCX now 10 cents a tonne

Obverse

We knew this was coming. Carbon Financial Instruments are now trading for 10 cents per metric tonne on the Chicago Climate Exchange. I wonder if the investors are reacting to the Hockey Stick Implosion news? As reported on WUWT, less than one month ago it was 25 cents a tonne, and a year ago it was over 1 dollar.  The all time high was May 2008 at over 7 dollars a tonne. Today: poof.

Looks like there was a big sell-off today. Carbon Investor confidence must be “unprecedented”.

The chart is only a sliver from rock bottom:

Anyone who was a founding member at 1 dollar has now lost 90% of their investment.

Tough noogies for them.

In other news, Zimbabwe dollars are still selling for higher value than CCX CFI’s  on Ebay.

I wonder if this fellow might have to drop his price for the domain name? Maybe he’d take a barter deal for some CCX instruments?

carbon_credit_review_domain

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67 thoughts on “Carbon Credit Market Imploding: CCX now 10 cents a tonne

  1. Anthony,

    While I agree that the Voluntary Emission Reduction (VER) market is quite problematic for a lot of reasons (dubious additionality, few reporting or auditing standards, etc.), you should realize that the CCX is a particular subset of the VER market and does not necessarily reflect the prevailing price of most carbon offsets. Long-standing market participants like Native Energy, for example, sell VERs for around $14 a ton, roughly the same price as a few years ago. The annual State of the Voluntary Carbon Market report is one of the few good sources of data on the overall market: http://ecosystemmarketplace.com/documents/cms_documents/StateOfTheVoluntaryCarbonMarkets_2009.pdf

    The CCX expanded dramatically in volume this year, and the current price collapse may be due largely to that particular part of the market being flooded. To wit: the CCX expanded from about 15% to close to 50% of the volume of the voluntary carbon market between 2008 and 2009 (with total volume nearly doubling from $350 million to $700 million).

    REPLY: Zeke no matter how you slice it or sell it, in my opinion and the opinion of many others, it’s still pointless speculation on untangible vaporware. – Anthony

  2. I have always said that carbon credit trading was the buying and selling of nothing… finally the price is reflecting this…. ahhh Tulip bulbs!!!

  3. Can I buy carbon credits and then sell them on the street for $5 a ton(ne). Here in Oregon I could sell them to motorist while they are having their gas pumped.

  4. Anybody who was founding member (and presumably had any market experience) would have sold off when it was $7/tonne. The only people who bought it $7 were marks, the same ones who ENRON just before the big fall, and tech stocks in early 2000.

    The founding members are people like Al Gore. They sold to the marks who watched AIT and bought the meme.

  5. Hi,

    I’m new here and also pretty new on the “subject” messing around with numbers in favor of climate change and the big sceme and crime wich is unfolding right now…

    I started wondering after hearing the news about our national weather institute the KNMI in the Netherlands, and their scam of putting in wrong data in temperature scores. I saw u posted this stuff on this amazing website and got interested since then.

    This carbon taxing wich is gonna be presented as the solution to the problem, (Problem, reaction, solution is what it sounds like..) will be accepted by the hypnotised televisionised human beings in numbers of as much as 90% or even larger.. They just follow the rest like they are suppost to..

    The only thing we can do is try to wake people up before it’s too late. This website makes a strong efford for that goal, on wich i want to make a compliment about.

    Belvedere

  6. The Money and Connections Behind Al Gore’s Carbon Crusade
    Deborah Corey Barnes

    10/03/2007
    Along with Gore, the co-founder of GIM is Treasury Secretary and former Goldman Sachs CEO Hank Paulson.
    Last September, Goldman Sachs bought 10% of CCX shares for $23 million. CCX owns half the ECX, so Goldman Sachs has a stake there as well.
    http://www.humanevents.com/article.php?id=22663

  7. In market terms, the product must become de listed. Empty cans and pop bottles have more value. Follow the money. I suspect Soros sold high and bought low. He does the same with foreign currencies. It has gotten him felony convictions in France and Hungary. Convicted felon Soros owns Climate progress and it is run by Joe Romm. Joes supervisor is leading the cahrge as a member on ACORN board. Another fraudulent enterprise.
    A side note. Look at the board of CCX. it includes Mayor Daley if I remember correctly and some scientists that have no tangible market tools and skills.

    http://www.chicagoclimatex.com/content.jsf?id=67

  8. As I wrote in my Carbon Credit Article back in 2008:

    Meanwhile, back at the financial dealing desks for Carbon Credits, another commodity is about to crash. But perhaps I should not use the term ‘commodity’, for Carbon Credits (CCs) are an abstract construct that have even less contact with the real world than our over-inflated monetary systems. If there was ever an emperor with no clothes, it is a carbon trader declaring that a CC is worth £30 or £20 or £10, or any other figure that he or she may invent. CCs are a new pyramid selling scheme, that only survives as long as someone is promoting it and as long as there are more gullible customers pilling into this new market. But there are not. A small element of science is beginning to doubt the Global Warming trends, fraud has destabilised the Carbon Trading market, and a global recession will flood this already unsteady market with millions of unwanted CCs. The price of a CC is about to fall through the floor, and I expect that the whole concept of a Carbon Trading market will fall over the cliff with it.

    It was all too easy to see – even before the present financial crash.

    .

  9. At this price I can offset all the carbon I am likely to produce for the rest of my life for only £200 quid or so. I’ll bet that the government will not take that into account when they tax me untill my pips squeek. There is no mechanism for avoiding tax by purchasing carbon offsets in this way.

  10. Notice the volume in September? Many days near or at zero. There is a spike in volume at the very end (as the price plummets more) which is likely someone dumping whatever they have at a big loss to folks who want wall paper.

    The basic problem here is that in order to get Cap and Tirade passed the Obama Admin promised enough free quatloos to big players to buy their silence that there is no longer anyone who needs to buy these things. Ergo zero value. Like all fiat money, the issuer issues a heck of a lot of them until the point where the “value” hits nothing (or near enough for all practical purposes).

    You see the same thing in stocks of bankrupt companies. They will trade long after the bankruptcy is announced for a few cents per share. Who buys them? Well, I once bought 100,000 shares of a bankrupt company for a small cost just to look at my stock account showing that I owned 100,000 shares of something. Yes, it “evaporated” in about 5 months… but I got more than my $100 worth out of looking at those statements! Heck, I almost managed to convince myself there was something real behind it…

    Quatloos, Quatloos! Get Your Quatloos here! Can’t place a carbon bet without your Quatloos!…

    (Frankly, I’m tempted to buy 1000 tons of carbon credits for $100 just to be able to tell radical green folks to go stuff it since I’ll never use 1000 tons of carbon fuels before I die… but I’ve already played that fantasy game with the other $100 toy… so maybe I’ll just fill the tank and go to StarBucks and a Movie instead ;-)

  11. Does anyone actually expect that someone can remove a ton of carbon from the atmosphere for 10 cents? If you purchase a service (any service) at 1/100th of what that service ought to cost, and you never actually see that service performed, do you honestly expect that it will happen? Anybody that buys this junk lives in Fantasyland.

  12. My guess it that most of the fools who invested in such an instrument are die-hard ecofundamentalists. Good to see them getting it right in the cojones!

  13. Doug,

    The CCX is almost exclusively limited to corporations buying and selling voluntary emission reductions. Prices of so-called “Over The Counter” (or OTC) carbon offsets that folks who watched Gore’s movie would be tempted to buy have remained relatively constant.

    Anthony,

    We may well disagree over how big a societal problem CO2 emissions are. However, assuming for a moment that CO2 mitigation is desirable, well-designed markets for carbon would surely be preferable to command-and-control emission standards (e.g. the recent EPA announcement). Discussing problems in the voluntary market from an economics perspective is interesting in its own right, independent of any climate science questions, and I’m pretty sure that recent CCX price changes are due to economic factors.

    Specifically, voluntary credits are largely worthless if the U.S. establishes a compliance market for carbon reductions, so long-term VER prices for companies are strongly impacted by the relative perceived probability of binding carbon markets being established in the next few years.

    I wrote an article a year or so ago on the various shortcomings of voluntary carbon markets in the U.S.: http://www.yaleclimatemediaforum.org/2008/09/the-us-voluntary-carbon-offset-market/ Unfortunately, few of these issues have been resolved in the interim, and the absence of serious standards for offset additionality in the currently proposed climate bills open the door to a whole host of future problems.

  14. So, will the British-Columbia Liberal Government reduce the carbon tax? Or even better, abolish it?

    One can only Dream with yahoos as politicians!

  15. Hmmm… Just as the big push for “climate reform” is happening in the U.S. congress CCX price falls off the cliff.

    Maybe someone is instigating the fall in order to snap up cheap Carbon Financial Instruments before Crap (sic) and Trade passes?

    Or maybe it has something to do with that pesky Canadian skunk at the CO2 garden party.

  16. Will someone please explain to me why he is spending 3.4 billion dollars of my money on carbon capture and storage (CCS)?

    Rockefeller has consistently pushed to make CCS technologies part of the solution in making the United States more energy independent. He fought to make sure funding for CCS technologies was part of the American Recovery and Reinvestment Act – and as a result, $3.4 billion was secured for low carbon coal and carbon sequestration projects.

    As discussions surrounding climate legislation move forward in the Senate, Rockefeller is fighting for even stronger investments in the technologies needed to secure a confident future for West Virginia coal.

    http://rockefeller.senate.gov/press/record.cfm?id=318456

  17. The problem with buying or selling air is there is lots of it … Hard to corner and manipulate the market.

    When do the lawsuits start? Someone self important has made a killing off of selling others on the scam.

  18. How much is CO2 worth on the open market?

    A 100,000 BTU natural gas CO2 generator will cost you C$840. It will generate 73,000 cubic feet of CO2 at 1200 ppm [1], or 87.6 cubic feet of pure CO2 per hour at STP.

    The price of natural gas is projected to be between C$3.5-C$4.0 per million BTU over this coming quarter. [2][3].

    1 Cubic foot of CO2 weighs 0.1144 pounds [4], therefore in one hour this CO2 generator produces 10 lbs of CO2. This at a cost of C$0.35-C$0.40. The cost of CO2 is therefore C$77 per tonne.

    Either I have made an error or $0.10 is too low. Of course, do these people actually have the goods to deliver?

    Therein lies the lie. There is no product to purchase. The natural price for something that doesn’t exist is zero.

    Actually, they want to take it away from you for 10c per tonne. I call that theft.

    This is all done in fun. I would be interested in hearing from anyone on the economics of greenhouse horticulture.

    1: http://www.vancouversun.com/business/asia-pacific/records+triple+digit+gain+central+bank+frets+about+rising+dollar/1997345/story.html

    2: http://www.vancouversun.com/business/asia-pacific/records+triple+digit+gain+central+bank+frets+about+rising+dollar/1997345/story.html

    3.http://www.canada.com/business/fp/Natural+prices+poised+plummet/2043909/story.html

    4.http://wiki.answers.com/Q/How_much_does_one_cubic_foot_of_carbon_dioxide_weigh

  19. Wow, 10 cents a share.
    Hey buddy, can you spare a dime?
    So, if the climate cools off and the carbon credit market crashes, can we call the credits “Frozen Assets”?

  20. Actually, they want to take it away from you for 10c per tonne. I call that theft.

    This example illustrates that the CO2 market is a phoney market. There is no commodity to trade. On any commodity market, even in the futures of that market, one is always purchasing a deliverable, which one might actually have to deliver at some point in the future. There is no deliverable in this phoney CO2 market; there are no CO2 tankers driving around delivering me the CO2 I want and need and paid for.

    There is no tradable good here.

    Personally, as a SCUBA diver, I am more interested in the price of Helium. Now, if someone has a solution to that issue…

  21. Wonder what the value will be after the impending fiasco in Copenhagen ?

    Maybe I’ll send Al Gore and David Suzuki an email letting them know that if thye pay me enough, I’ll take their credits off their hands.

    Gonna need something to burn in the fireplace this winter. I’m expecting it to start early, be brutal and linger on into late Spring.

  22. I’m thinking WV coal is in for a bit of trouble with Obama closing off the mountain top mining:

    http://online.wsj.com/article/SB125433443346253225.html

    That and the EPA ramping up things could make CO2 a better deal:

    http://online.wsj.com/article/SB125435259851954193.html

    Of course, humor is possible if they get sued and we find it’s illegal for the EPA to raise limits on pollutant releases.

    My suggestion is to fire up the cards and letters, visiting if you happen to be in DC, or go to the local congresscritter offices. Take article or make references to some of the recent posts here. I’m pretty sure they’re not paying attention, but it’s basically all we’ve got.

    Mike

  23. Reminds me of the Pet Rocks craze. An unbelievable number of people bought caged painted rocks till one day some Neanderthal in the group found out he could paint any old rock and call it his pet for free.

  24. The logic of the guvmint would go like this:

    The sagging market is ripe for a stimulus package. We need to be sending a LOT more CO2 into the air so that we can stimulate the companies that are geared to remove it! Yah. That’s it. That’s what we’re gonna do. Stimulate the production of CO2! Hell, it worked for cars din’t it?

  25. Robert Wood, I suspect the device you are talking about is a so-called “inert gas generator.” The output is not just CO2, but mostly nitrogen from the combustion air. To get pure CO2 from the discharge stream, you have to have a process unit to remove the CO2 from the mixed gas at low temperature and under significant pressure, and then regenerate the process stream to get the pure CO2 out of the absorbent. An ethanolamine scrubber is one device commonly used for this purpose. The ethanolamine is then sent to a regenerator where it is heated to release the CO2. Thus, you can’t get the cost of the product CO2 just from the price of the natural gas burned. Plus, if you want to ship it somewhere, you have to add the cost of compression. That is why the cost of power from a coal-fired power plant wherein the CO2 is separated and buried in the ground somewhere will be a lot higher than from one wherein the CO2 just goes out the chimney.

  26. Ray (16:14:31) :

    So, will the British-Columbia Liberal Government reduce the carbon tax? Or even better, abolish it?

    As a fellow British Columbian, I can assure you that our goverment will not remove the tax, they will most likely increase it in the wake of this news.

    Mark (15:30:18) :

    My guess it that most of the fools who invested in such an instrument are die-hard ecofundamentalists.

    If only that were true. My experience is that those people are the last ones to actually do such things. They demand that you do it, but they need all the cash they can get to attend world-wide rallies to protest our inaction.

  27. Does the S.E.C. regulate this market? Does any government agency regulate it?

    If not, maybe Zeke’s list of companies buying worthless CC’s should be considered for short sales.

  28. Just invert the curve when you do the reconstruction and you’ll get a nice temperature proxy w/requisite hockey stick.

  29. Ecotretas (14:40:43) :
    Can we short-sell them? If so, we can gain money as they fall!
    Ecotretas

    Yes, you can take a short position. However you won’t make any money because it can only go to 5 cents. (the minimum trade increment, and it can’t go to zero) You’ll make 5 cents, but you will pay 5 cents in trade fees, along with $250 to start up an account. So no matter what, you lose.

    Ten cents is probably the rock bottom price. Only folks who actually have a contract will be selling. (no one will be taking a short position at ten) If you owned a contract you could sell it at ten, pay the five cent fee, and get a tiny amount of money back. If you had a contract, and it dropped to five, why would you sell it at 5 cents if the trading fee was five? You might as well hang onto it and pray.

    You might have an “ask” at five, but there probably won’t be any sellers there so it should remain at ten. I’ve never seen a commodity at its lowest price. (this commodity can move only in 5 cent increments)

    For comparison purposes, imagine if corn was selling at half a penny per bushel. This is 56 pounds of corn! (about 25 kg for our metric friends)

    This price of ten cents is truly mind-boggling, and demonstrates that it is nothing but smoke and mirrors.

  30. I think I will buy 1 carbon credit hold it to expiration and take delivery.
    My soda went flat.

  31. Ecotretas (14:40:43) : Can we short-sell them?

    There would have been a nice profit from $7.00 to 10¢. Even 25¢ to 10¢ would have been good.

  32. Jim Stegman (20:46:10) : $250 to start up an account

    Why that much? There must be cheaper avenues.

    If we could have known about this drop over the past month and shorted maybe 100,000 shares of CCX when it was at 25¢ ! …Enough of ‘what ifs’.

  33. Smokey (20:17:43) : Does the S.E.C. regulate this market? Does any government agency regulate it?

    Regulation?? I think the regulations at this time are whatever those bankers with that $750 billion say they are.

  34. I recommend that people sell carbon dioxide and buy SO2. In a cyclical market like climate its best to get in first before all of the speculators in global cooling start piling in.
    BTW I love your blog!

  35. Any guess at the odds of this site folding within the next 12 months.

    “The World Carbon Database (WCD) is a non-profit open resource that indexes carbon offsets. WCD does not sell carbon offsets, and is an entirely free service, designed to promote the usage of carbon offsets and responsible ecological behavior.”

    http://www.worldcarbondatabase.org/welcome-to-the-wcd

  36. “Regulation?? I think the regulations at this time are whatever those bankers with that $750 billion say they are.”

    Al Gorito and the Climate Banditos say: “Reg-u-lationz? We don’ need no steenkin’ reg-u-lationz!!!!”

  37. I suppose it can’t apply to a futures market, but NASDAQ starts “delisting” procedures against companies whose stock value goes below $1.00, the intent being to get the moribund companies off the stock pages and keep the clutter down.

    In this case the “clutter” has more amusement value. I wonder if we can find out who bought futures at above $5.00.

    In a futures market, someone has to keep track of contracts and delivery of the product, though in this case no one drives up and dumps a truckload of coffee beans in your front yard. (I heard of some people who dabbled in coffee futures who decided instead of selling their contract at a loss to accept delivery and started a coffee business instead.)

    “Hey bud – I got 10 tonnes of CO2 for ya – where d’ya want it?”

  38. This whole carbon-trading scheme only works if rent-seeking corporations and scam artists can get the government to force people into purchasing carbon credits. It’s Enron++.

    In fact, Enron was a big proponent of carbon trading.

  39. This market needs a bailout. If it doesn’t some quickly and with a lot of money, we will have to trade carbon in back alleys and other dangerous places.

  40. When I deliver grain it is weighed on a scale. I expect that scale to be
    calibrated and accurate, the people running it to be honest, and I still look
    and judge for myself if things appear to be right.

    Where is the scale for all the green house gases?

    A fool and his money are soon parted.


  41. Zeke Hausfather (14:37:22) :

    Anthony,

    While I agree that the Voluntary Emission Reduction (VER) market is quite problematic for …

    Perhaps those REALLY looking at Voluntary Emission Reduction should check out the Chris McCandless option:


    en.wikipedia.org/wiki/Christopher_McCandless

    Summarized:

    A 1990 Emory University graduate who hiked into the Alaskan wilderness with little food and equipment, hoping to live an idyllic life in a quiet solitude … who was apparently bent on self-extermination because of a warped personal belief system and an over-estimated skill set (as evidenced by his actions, his squandering of those resources he did encounter) this was done by venturing into an unkown area without a means of navigating (/map, /compass) and subsequenctly found in his sleeping bag ~ four months later weighing an estimated 67 pounds (30 kg) DESPITE lifesaving resources just miles of where he was found.
    .
    .

  42. Super cheap carbon offsets makes it more affordable for AGWers to indulge in their hypocrisy by excusing their enormous carbon footprints.

  43. Sorry for a stupid question. But can’t you buy these indulgences for 10 cents a ton and sell them for 13 euro a ton at the European system, ETS?

    http://www.pointcarbon.com/

    Please, if someone earns some money, I don’t want any fee for a good idea, because I am not unethical to benefit from human stupidity, unless he or she earns at least USD 1 million in which case I want 10%. ;-)

  44. Ric Werme (05:28:10) : “Hey bud – I got 10 tonnes of CO2 for ya – where d’ya want it?”

    I got a friend who grows corn. Bring it on over!

  45. Remember the “LAW of IT” folks.
    Whatever IT is someone will find a way of making money out of IT.
    CARBON was IT but I guess ALBERT & CO will now have to find a new IT
    Hope they lock him up before that happens, and he gives his NOBEL back and apologizes, and maybe we should insist that from now on the UN IPCC can only use PROPER SCIENCE not the PSEUDO BOGUS PRETEND STUFF they have been using. I live in hope !

  46. Fred from Canuckistan . . . (17:29:17) : Gonna need something to burn in the fireplace this winter. I’m expecting it to start early, be brutal and linger on into late Spring.

    Send in a FOIA request to the UK, USA, and Canadian governments (assuming they all have a FOIA process) requesting a copy of the current budget. Oh, and all documents pertaining to AGW policy.

    Ought to get enough free paper for most of the winter…

  47. Everybody wants to make money out of every opportunity. VER market was started to create awareness among people and make them do whatever little they can to help environment. Now every body is Happy that price of CFI at CCX has fallen because they always said this thing will never work most of these people are actually those people who will not give $1 in charity but will be keep quite when they are taxed $ 100. They want to through stone on every body who is doing anything good because it make them realize that they are living a self centered life so easy way is pull down anybody who is doing something for others and tell everybody see we told you this was about to come. People are shameless and that is the way they will always will be. Stop comenting on others act and do something better if you can.

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