EU carbon trading in freefall

Looks just like what happened to the Chicago Carbon Exchange is about to repeat in Europe.

Source: http://www.barchart.com/charts/futures/CKZ11

By Thomson Reuters Point Carbon

LONDON | Wed Dec 14, 2011 12:01pm EST LONDON (Reuters) –

EU carbon prices fell to their lowest ever level on Wednesday …

The ICE ECX December 2011 EUA contract fell 73 cents to an all-time low of 6.30 euros, down 10.4 percent on Tuesday’s 7.03-euro settlement. By 16.30 GMT, the contract had recovered slightly to 6.41 euros on healthy turnover of around 15 million units.

The drop sends the contract into unchartered territory, falling well below its previous low of 6.77 euros on December 6 as market traders saw few signs of respite in the EU economy to boost demand for emission permits.

“I still don’t see any bottom to this market,” said one carbon trader, who said any positive sentiment from this weekend’s landmark U.N. climate summit in Durban was purely psychological as it brought no increase in demand for permits.</p>

Read the whole story

Jo Nova writes:

The low price, 6.3 Euro, is equivalent to about $8 Australian or US.

The Australian government signed us up to pay $23A with a floor at $15 (and they think that they are creating a “free” market.)

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Neil

The Australian government signed us up to pay $23A with a floor at $15 (and they think that they are creating a “free” market.)
The current Australian government’s definition of “free market” is vastly at odds with the definition used everywhere else. They have the same problem with the definitions of “integrity” and “honesty”.

No matter how much I squint my eyes when I look at that chart,
I can not make it look like an upside down hockey stick.
Maybe if I ran the numbers through Mann’s algorithm and then displayed it upside down, Mann/Tiljander style?
🙂

Leon Brozyna

At this rate, it’ll be below one Euro by spring. Who’s gonna be left holding the bag on this sad bet?

tokyoboy

Since this is in the public eye, I bet they cannot hide the decline.

Pingo

I blame capitalism for this market not working.

R. de Haan

They try to make it to 2013 but I think the EU can call it’s self lucky if they make it to through the end of this year.
http://www.zerohedge.com/news/australian-banks-given-one-week-prepare-european-meltdown

David Larsen

Bull market or cow sheeeeeeeeeeet?

Curiousgeorge

Tulips anyone?

DANEgerus

Selling valueless ‘credits’ to save the earth from plant food is the foulest sort of fraud. They should all lose everything for their attempts to steal from the poor.

AdderW

JohnWho says:
December 15, 2011 at 5:00 pm
No matter how much I squint my eyes when I look at that chart,
I can not make it look like an upside down hockey stick.
Maybe if I ran the numbers through Mann’s algorithm and then displayed it upside down, Mann/Tiljander style?
🙂

It will look much, much “better” if you just swivel it around the y-axis

Added to the Canadian pullout, this explains why the authorities need to start arresting people now.
When the real bosses lose real money, their underlings (sometimes called “governments”) feel the pain and start looking for even lower underlings to whip.

John M

Maybe it’s time for a reverse split.

The market is trying to find its true level, which is about -10 Euros.

TomRude

Thomson Reuters Point Carbon is the perfect illustration why this organization cannot be trusted on climate change issues. Their Trustee Sir Crispin Tickell is a stalwart of UNEP and involved in green alarmism as demonstrated by the Climategate 2.0 emails. Their newspaper in Canada, the Globe and Mail is a rabid warmist paper.

mpaul

Oh my, there go the BBC pensions — up in smoke, er, down in carbon.

But can: Europe, Australia, California and now Quebec be that wrong or that stupid?

This will get worse and unlike gilt edge stocks, you can’t sell them, just transfer them. Well with gilt edged stocks at least you earned interest, and could regain some of your capital expenditure,
by selling them by transfer. Happy Christmas everyone, and I am signing off now till the new\year

Methow Ken

Darn: Dummy me: Was thinking I should have shorted ICE ECX futures a while back; never took action. So it goes. . . .

On the bright side, climate delegate agree to keep getting paid.

davidmhoffer

Leon Brozyna says:
December 15, 2011 at 5:01 pm
At this rate, it’ll be below one Euro by spring. Who’s gonna be left holding the bag on this sad bet?>>>
There’s still going to be a Euro in the spring?

I think that should read “uncharted” territory. In any case, don’t you guys know that this would have never happened if independent thought hadn’t got in the way? The centralised planners know better, and if all their plans had gone to plan, the plan for the price of “carbon” trading above $15/tonne would have come to fruition.
Curses, foiled again!

AdderW says:
December 15, 2011 at 5:25 pm
JohnWho says:
December 15, 2011 at 5:00 pm
No matter how much I squint my eyes when I look at that chart,
I can not make it look like an upside down hockey stick.
Maybe if I ran the numbers through Mann’s algorithm and then displayed it upside down, Mann/Tiljander style?
🙂
It will look much, much “better” if you just swivel it around the y-axis

Would that be Mann’s “de-natured” trick?

Leon Brozyna

davidmhoffer says:
December 15, 2011 at 5:59 pm
…coffee spew…best one-liner of the day

By spring, you will be able to buy worthless carbon credits with worthless Euros.
Steamboat Jack (Jon Jewett’s evil twin)

ferdberple

The Australian government signed us up to pay $23A with a floor at $15 (and they think that they are creating a “free” market.). The low price, 6.3 Euro, is equivalent to about $8 Australian
Perfect. Buy EU carbon credits for $8 and sell them for $15 in Oz. $7 profit as fast as you can turn them over. Looks like everyone in Oz can simply quit their jobs and retire. Have their broker buy/sell more carbon credits any time the nest egg falls below $1 million.
Tulip mania anyone?

Interstellar Bill

Prop up the carbon exchange by adding to the ObamaCare mandate
a further mandate to buy carbon credits before you get to start your car.

Larry Hamlin

This outcome with further decreases to come reflects the failures of Copenhagen, Cancun and Durban despite how the worthless mainstream media try to portray these realities. The facts remain that nothing will happen concerning emissions reductions for a decade or more. The idiots who brought us this doomed from the start approach to try to create global wealth transfer schemes hidden by phony climate fear bs have failed. Great end result.

Jimmy Haigh

Leon Brozyna says:
December 15, 2011 at 6:09 pm
davidmhoffer says:
December 15, 2011 at 5:59 pm
coffee spew…best one-liner of the day
Agreed!

Roh234

Carbon trading is anything but a free market.

Caleb

RE: “mpaul says:
December 15, 2011 at 5:50 pm
Oh my, there go the BBC pensions — up in smoke, er, down in carbon.”
If you can’t stand the heat, don’t sell your soul to the devil.
Seriously, all you BBC employees ought be re-thinking your loyalties. Certain rich, fat-cat market manipulators (naming no names) promiced you that you’d be taken care of, and could retire at age fifty, if you played along. They likely sold out long ago, and may well have played you for chumps, for when they sold out your pension plan bought what they sold. Now it looks you won’t be able to retire until you are eighty. There is only one way to get even. Do what they fear most: REPORT THE TRUTH!

tokyoboy

The trend of atmospheric CO2 concentration:
http://junksciencearchive.com/MSU_Temps/MaunaLoaCO2.png
hasn’t changed at all since 2005, when the KP came into force and scammers worldwide began crying wolf.
Their sole target was controlling the CO2 time course, but NOTHING HAS HAPPENED, as is crystal clear even to the eye of kids.

Gordon Melville Ford

What else is new?

Mac the Knife

““I still don’t see any bottom to this market,” said one carbon trader.”
Not much of a ‘trader’, if he doesn’t know with certainty that any market has an absolute bottom at “0”.
Reducing your carbon footprints is as simple as wiping your feet before you come in the door!
It’s value is nontrivial… and your moms will thank you….
MtK

Marian

“Neil says:
December 15, 2011 at 4:57 pm
The current Australian government’s definition of “free market” is vastly at odds with the definition used everywhere else. They have the same problem with the definitions of “integrity” and “honesty”.
Same applies for the NZ Govt. Carbon is set a NZ$25.
NZ Govt’s over the years have been fairly zealous on the ‘freemarket’ economy principle.
It doesn’t apply to carbon pricing though.

G. Karst

Warm fuzzy feelings can get very expensive. GK

davidmhoffer

“I still don’t see any bottom to this market,” said one carbon trader>>>
I heard that more than one said that. But the media never reported the others because they were just carbon copies.

Where is Maurice Strong,the failed Canadian Pol, who started the IPCC?? Oh yes hiding out in China, being protected by the Chinese, as he counts his Oil for Food money from the Iraq scam. Guess he will have to live with those millions as his Carbon Credit scam seems to be going down in flames.

Fitzy

Yeah, Carbon is worth Minus 60,000 Zimbabwe Drachma’s. Or about 3.5 Euro-Cents, actually subtract the sales tax, its around (Minus) -1 U.S Treasury Bond, or about zero divided by 1 Goldman Sachs Shares (pre-bailout).
Lucky for us, many green thinking retirement funds are banking on this FIAT currency to top up the portfolio. Which equates to the value of 1.5 standard Euro Oranges on retirement – as long as you grow them yourself, in your own land, having paid a carbon tax for adding fruit trees to the diverse biological backdrop that is the modern industrial/urban landscape.
Cha-CHING!

davidmhoffer

…any positive sentiment from this weekend’s landmark U.N. climate summit in Durban was purely psychological >>>
Ouch. I was trying to come up with a witty sarcastic remark… and then I realized that the original quote actually IS a witty sarcastic remark.

Dennis Nikols says:
December 15, 2011 at 5:50 pm
But can: Europe, Australia, California and now Quebec be that wrong or that stupid?

Rhetorical question, I know, but it’s clear the historical and contemporary evidence says, “Fer damn shure!”

As for the mandated/hoped for/delusory “floor price” of $15, I seem to recall a UN analysis that said that the price had to be north of $45 to achieve any “mitigation”.
Oopsie! -har -hack -choke -snort!

Looks like a grade black ski slope – next stop the bottom!
To certain extent this was inevitable – there is no intrinsic value to back up what was being traded – it wasn’t even scarce, the darn stuff is freely available everywhere!
When they do get to zero – the credits will have some value – as fire lighters… Good riddance!

Jenn Oates

I was trying to explain the carbon markets to my students last week. It was extremely difficult to convince them that they are real because even to a knuckleheaded ninth grader it sounds like an overabundance of horse manure.

Justa Joe

It couldn’t have happened to a nicer bunch of guys. I hope the BBC pension fund takes a bath on this.

Photos here of what we are going to have to pay for under scammer Gillard’s #lunatic tax, our new power station is gas fired. http://pindanpost.com/2011/12/16/the-invisible-gas-and-media-propaganda/
Includes Matt Ridley’s item on gas vs wind and the usual media propaganda pic of emissions.

pat

this and more are now posted at Jonova’s site:
15 Dec: BBC: Firms say low carbon price threatens EU green targets
Some of Europe’s biggest energy and manufacturing firms say the EU must act to raise the price of carbon and ensure that CO2 emissions targets are met.
A letter to the European Commission from the industry group warns that the future of the EU’s Emissions Trading Scheme (ETS) is at stake.
The EU Corporate Leaders Group on Climate Change (EUCLG) includes Royal Dutch Shell, Enel, Alstom and Acciona…
***The EUCLG’s patron is Britain’s Prince Charles. The group’s letter called for permits to be withheld in Phase Three of the ETS, which begins in 2013…
The EUCLG Director, Sandrine Dixson-Decleve, told BBC News that “the ETS is no longer functioning as it should be functioning”.
“We’re in a financial crisis, and as we’re trying to look at the eurozone we need to look at the existing [carbon] market and make sure it’s functioning, so recalibrating the market to take into consideration the situation we’re in.”
She said the financial crisis had helped to reduce Europe’s CO2 emissions, because of the slump in industrial output…
The EUCLG wants the EU’s Energy Efficiency Directive to be aligned with the ETS, because it expects a 13.9% reduction in carbon prices if firms in the ETS increase their energy efficiency.
The letter says the EU must take account of the potential impact of the directive and other green energy policies on the carbon price, to ensure that the ETS remains viable.
http://www.bbc.co.uk/news/world-europe-16193954

James

Well I recall reading that the recession did more to drop emissions than anything else. If you think europe is heading for more recession (a very good bet imo), then I guess it makes sense that there will be more indulgences than sinners.
As someone hinted at above, the clearing price is zero if permits are in excess supply…
Look out below!

davidmhoffer

@ Pat
“She said the financial crisis had helped to reduce Europe’s CO2 emissions, because of the slump in industrial output…”
There is just no end to the humour as the whole facade crumbles. What she meant to say was:
“…the slump in industrial output is a crisis caused by the forced reduction in CO2 emissions…”

Steve Keohane

Looks like ‘Peak Carbon’ was in late June 2008, 3 months after the market opened.

James says:
December 15, 2011 at 8:37 pm
Well I recall reading that the recession did more to drop emissions than anything else.

To date, the ONLY thing that drops emissions. The hoped-for vicious spiral is CO2 controls→recession→lower emissions→support for more controls→depression→ban on emissions→total de-industrialization.