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.)
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
” Dennis Nikols says: December 15, 2011 at 5:50 pm
But can: Europe, Australia, California and now Quebec be that wrong or that stupid?”
Quebec has huge hydro and could easily supply most of the northeast USA if they got the contracts and developed James Bay 2, 3, 4 etc. You have no idea just how massive the amount of untapped hydro is in northern Quebec my friend. They obviously will go along with anything that gets them more sales.
I’ll let the Auzzies, Europeans and Left Coasters explain their angles. Quebec is purely a mercenarial move. Follow the money!
“At this rate, it’ll be below one Euro by spring. Who’s gonna be left holding the bag on this sad bet?”
Um that would be the European governments. But hey they are flush these days right?
Brian H says:
December 15, 2011 at 5:43 pm
The market is trying to find its true level, which is about -10 Euros.
===================================================
🙂 Brian, I’m sure you ‘thick’ fingered the keyboard and meant to type “0,00” Euro.
the smart money was shorting this market last summer or before…still it is not too late to short it into the dirt and buy incandescent bulbs with some of the profits.
The trade in a harmless trace gas and plant food is perhaps the most evil part of the CAGW fraud, it is stealing money from those least able to afford it and enriching those least in need and least deserving of it. Will we ever learn who got rich and how and more importantly will these profiteers ever be brought to justice?
It is the essence of criminality second only to the windmill/solar FiT fraud and it highlights perfectly how corrupt our political elites have become and how insulated from the consequences of their actions they now are. This political class elite can lie and cheat and deceive and manipulate and there are no consequences. Is it any wonder they have run wild?
It seems to be a case of the West in decline, a systemic failure and a blurring of the concept of right and wrong in those where that concept is vital for us all, where justice is no longer blind. Is this how civilisations end I wonder. When this carbon trading fraud fails and it will fail, when it fails what will happen to the fraudsters and the profiteers?
Oh, at the rate things are going it might be back up to Eu100 or so next year.
Of course, at that point we’ll be referring to it as the ‘Weimar Euro’ anyway.
That’s why the news presenters on the BBC look so glum this morning!
Actually I would get rid of any euros \asap!
Looks like AGW is really collapsing now from the various news stories now becoming mainstream re above the raid was probably caused by the free fall in carbon trading, just follow the money that would have really hurt the big wigs controlling police in uk and doj in \\\usa
I seem to remember reading some time ago that the BBC had its pension scheme mixed up in this sort of ‘market’. I don’t know the ins and outs or even if there is any truth in that but I would like to hear from anyone who is in the know.
@Galane
“…..I wouldn’t mind it a bit if the fallout blows apart the EU. That was just Germany and France trying to take over Europe again, economically rather than by force of arms….”
Yes, the Brits are going to have to stand alone again… I hope the US and Canada will be able to come to their help as before – it looks like Australia and maybe New Zealand and South Africa will sit this one out.
At the same time we have a corresponding Asian fight with India battling with China (rather than Japan)
Funny how history keeps repeating itself…..but where is the Churchill for the financial sector when you need him…?
tokyoboy says:
December 15, 2011 at 7:05 pm
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.
////////////////////////////////////////////////////////////////////////////////
See how linear the increase in CO2 is from the 1950s and yet manmade emissions of CO2 running from the same time are anything but linear.
That graph should always be superimposed with a plot of manmade emissions over the same time scale, and it would then be apparent that Mauna Loa is not plotting/recording/reflecting manmade emissions.
It was all bound to fail. The warmist scammers marketed the trading of CO2 as trading in carbon credits rather than carbon dioxide credits. In reality there is no such thing as carbon exchanges rather carbon dioxide exchanges. They lied to the public because as has been mentioned before, the ordinary public would be up in arms if they knew they were being forced to pay for carbon dioxide credits.
When it comes to fire in the home, which would you prefer, a carbon detector or carbon monoxide detector?
Nope. Did you miss the minus sign in front of the ’10’?
CO2 is a valuable resource. Emissions should be subsidized.
Bound to happen.
The Carbon Credit is a monetry currency, just like the dollar or euro, but with printing presses all over the world churning out credits. An oversupply of money devalues a currency – even a Carbon Credit currency. And a huge oversupply of money, means you put you money into another currency, to keep it safe.
I hope Lazy Teenager and Mr (Greg) Bin Laden bought loads and loads of CCs at the top of the market. Scientist can lie and hide a decline, but markets eventually catch up with financial lies and scams – ask Bernie Madoff how long you can cover up the hole in the accounts for. 😉
.
Not really on topic, not really off topic, but not worth a separate post:
Here in the US northeast, the last RGGI auction for the year sold 63% of the available CO2 allowances, a much greater percentage than I expected, which was less than the paltry 18% in the last quarter.
Buyers may have decided there will be no competition from speculators and no chance that all will be sold, so may be adopting a “just in time” buying practice.
I’ve updated http://wermenh.com/rggiwatch/index.html with that datum but have been a bit lax about tracking other RGGI news. It hasn’t been very interesting anyway.
One recent item – New Hampshire has made grants some projects with the expectation that RGGI funds would pay for them.
http://newhampshire.watchdog.org/9573/rggi-running-600k-deficit-in-new-hampshire/ says in part:
I raised the possibility of this shortfall in my testimony at statehouse hearings into a bill to have New Hampshire withdraw from RGGI.
Pingo says:
December 15, 2011 at 5:02 pm
“I blame capitalism for this market not working.”
I do too. Capitalism is all about letting the free market pick winners and losers. Carbon trading was obviously a LOSER…
TRM says:
I’ll let the Auzzies, Europeans and Left Coasters explain their angles. Quebec is purely a mercenarial move. Follow the money!
Well, out here on the Left Coast we don’t have an angle. We’re just committing eco-hari-kari along with our long plunge into economic ruin. Gov. just announced something like “Tax Beatings to continue until morale improves, or else… or else we’ll have to cut spending by $1 Billion” Which would be fine except that we are somewhere between $14 B and $40 B in the hole depending on which lies you believe. (Add in unfunded obligations it’s much higher…) And, of course, the economic base has packed up and left as fast as the taxes were raised and the regulatory choke chain was applied…
We do have a couple of old nuke plants, located on earthquake fault lines and next to the ocean (hey, we taught Fukushima everything they know!) and we’ve got about 10% hydro; but mostly we have decorative wind turbine tax dodges and buy our electricity from Arizona and Washington State at nice high prices… (but it keeps our ‘carbon footprint’ low and folks don’t need California Carbon Indulgences to build a plant out of state…)
SIgh…
Oh, and per the European Carbon ETS:
Say I’m a factory that burns 100,000 tons of coal a year to make steel. I can either pay $10/ton for the coal AND a projected $20/ton ‘carbon tax / permit’ or I can move to China. As it takes time to build a new steel mill, I start building one (about a decade ago…) when the economy is going great. (I can use both, then). When the economy slows down, I shut the more expesive EU plant and dump my carbon tax problem. IFF the economy ever improves, I’ll open my second plant in China.
In trading, this is called “Legging in” to a position… (or “legging out” of the EU.)
I’ve watched it happen to California for about a decade+ now…
That, btw, is why they are so desperate to make a GLOBAL straight jacket tax at IPCC.
As long as anyone is outside the scheme, it collapses. Slowly in good times, or much faster in downturns.
China knows this (and knew it), which is why the went along with Koyoto (where they got a free pass). Now that they have all the industry, their incentive is to just say “up yours” to a new deal and follow that with “If you want products, we have them, if you do not want them, you have no factories and no competitive position”.
Any attempt to revive the ETS / Carbon Price will just drive more stuff to China (as we’ve been saying here for years…)
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.
No, the trend appears to be pretty much linear, not even exponential. In fact, extrapolating the straight line best fit to the data, the curve reaches “zero” by sometime in May or June of next year, although there is a small additional negative trend clearly visible close to the end probably associated with the fact that Durban was a complete bust. If one extrapolates just this latter segment, the market could bottom at zero by around March or even sooner.
Of course the way markets really work is on confidence. The negative trend indicates a lack of confidence. At some point, even the most rosy cheeked optimists and true believers are going to be asking themselves whether or not they are about to lose whatever shirt they have tied up in carbon futures, and when that happens the market could fall the rest of the way to the ground in a day or two. That will be quite apparent if and when it happens, as the volume of trading will plummet as there are no takers at any price on an offer to sell. At the moment they are still finding buyers, as the canny investors seek to get out at a loss but with some of their investment intact, but there won’t be buyers for long if the curve continues its linear or better descent.
The interesting question is then — with Durban over, what could possibly restore confidence in carbon futures? Some government stepping in to buy them to prop them up? More laws mandating their use? How will either of these ever come to pass, given that “carbon emissions” have absolutely no real value and the entire market is artificial? What they are is “United Nations Bucks” — money issued by the UN, expected to be backed by its member nations, which is (IMO) the entire point of the IPCC and CAGW hysteria at the international level from the beginning. Durban’s “last minute success” was, after all, pretty much complete and abject failure, one that (one suspects) allows all of the inside traders and UN officials and participants in this entire debacle a small window in which to unload their holdings.
Is that what we are seeing? The small increase in slope over December could well be people such as Al Gore selling off their shares as the writing on the wall became clear. It could be other IPCC committee members selling theirs. We could be seeing the rats leaving the sinking ship, getting out while there are still suckers around who will buy the shares on the basis of the artificial “euro-phoria” of Durban, the illusion of a Kyoto-2 agreement and a huge trillion dollar bank that everybody knows will not ever happen. What happens when there are no longer rats willing to take the place of the ones leaving? What happens when the trickle of a leak becomes a flood, water running over the gunwales?
One good outcome will be that the complete collapse of this market will both defund a lot of the people who hoped to exploit this. It is probably too much to hope that they will be beggared and left out in the street to starve, but they ought to exit a lot poorer than they went in and hence less prone or able to create future trouble. Another is that this, like nothing else, will reveal the deep and intrinsic corruption of the entire process when fingers are being pointed and governments begin investigations into the whole thing.
I think it is fair to doubt that carbon futures or other UN funny money will ever again arise from the ashes of this particular phoenix. Deprived of all hope of “carbon taxes” or a “currency” of its own, with the international money and power removed from the CAGW equation and individual nations thrown back on sanely moving to alternative energy resources (such as solar) to the extent that they make economic sense (because they do, already, make sense in certain milieu and will make more sense in the near future as the costs per watt continue to descend) will rationality return to climate research? I suspect that it will. The vested interest, the possibility of profit thus removed, who will benefit from it? We will quickly see whether or not the real concern has been about flooded coastlines in 2100 or if it has been about the money and power all along.
I’m betting that it has been about the money and power. With the IPCC defanged, with its UN and international pushers no longer able to see any plausible chance of getting their hands on the hundreds of billions to trillions of dollars they were dreaming of, the unfunded and non-vested voices of reasonable doubters will very likely emerge, especially if the climate cooperates with global temperatures remaining more or less flat to slowly descending and (one hopes) our understanding of the physics of the system improves. True data and method transparency should also help a lot. In the future there will not be much of a window between the publication of an egregiously awful result (e.g. Steig) and the publication of refutations based on the same data and an exposure of weakness in the methods. We’re already seeing some of that now IN the case of Steig, where far less time elapsed than it did with, say, MBH before it was debunked, but expect more of the same, and more pressure (post Climategate 2) on e.g. the media and journals to present balanced treatments and be less egregious in their gatekeeping and CAGW-CBCPD (Catastrophic Anthropogenic Warming based on Confirmation-Biased, Cherry-Picked Data) editorial stance.
rgb
I noticed this a while ago.
http://chiefio.wordpress.com/2011/12/09/cameron-tells-angela-no-fourth-reich/
Has a rough summary of the way that Europe has repeatedly tried to reassemble the Central Europe Empire (Holy Roman Empire, Napoleon, Lesser German Reich, Greater German Reich, 3rd Reich, Austriia-Hungary, Frankish Empire, EMU) and through it all Britain has stood outside…
It really is a remarkable feature of history. How France and Germany take turns trying to own all of Europe… Only this time it looks more like a Joint Venture… I think it will end the same way, though… Seen this movie before…
Carbon will be using the traditional Telemark landing…
http://www.theaustralian.com.au/national-affairs/europes-287bn-carbon-waste-ubs-report/story-fn59niix-1226203068972
Who invaded and burned down Western Europe – only to see the communists siege all of Eastern Europe?
Who then executed all of the involved senior German management – expect from the scientists who later on brought them to the moon?
Who then used all their money fighting the same communists, that the Germans were close besiege before the invasion Western Europe. Now only to see the Muslims start a new fight, that had to be fought on deficit money, and funny enough fought in the same territories that was controlled by western European countries – before the invasion and burn down of Europe in 44-45’.
So who has been fu….. up the last 75 years of western civilization – spend all their money and 15 trillion§ more – and is now practically owned by Chinese banks?
If you don’t know the answer please ask Sarkozy and Merkel. They know and are desperately trying to mitigate. The Euro will stand.
Anyone know exactly how to short these? Is it possible?