There is much conversation about the "price of carbon." We thought it useful to list the varied prices that exist in the many markets around the world.
Environmental commodities (emission credits, carbon credits and renewable energy credits) are some of the most esoteric commodities traded on markets. Price discovery and liquidity is a luxury often not afforded to these markets, so pricing, buying and selling these commodities can often be difficult and confusing. It is for this reason that clients occasionally ask Dentons to provide pricing evaluations of these markets. Most recently, the implementation of the California and the China carbon markets has increased the interest in prices for environmental commodities across the board. The following is a snapshot of some key indexes currently trading in the markets.
Commodity | Description | Average Price | Notes |
EUA | European Union Allowance: The greenhouse gas credit traded under the Kyoto Protocol | US$5.75/ton | When Kyoto Protocol was at its most active, prices were around US$15. The dramatic drop came because a new phase of Kyoto was not approved. |
CER | Certified Emission Reduction: A greenhouse gas credit created by a reduction project under the Kyoto Protocol's Clean Development Mechanism (CDM) | US$0.15/ton | When Kyoto Protocol was at its most active, prices were around US$15. The dramatic drop came because a new phase of Kyoto was not approved. |
CCA | California Carbon Allowance: Greenhouse gas allowance credit under the AB-32 program | US$11.75/ton | Market sets a floor price of US$10. |
CCO | California Carbon Offset: A greenhouse gas project credit under CA's AB-32 program | US$10.00/ton | An offset historically trades at a discount to an allowance. |
CCER | China Certified Emission Reduction: Credits created by carbon reduction projects in one of the five regional Chinese carbon schemes | US$3.50/ton | Certain CERs from the CDM market can be transferred into this program. |
NJ SREC | New Jersey Solar Renewable Energy Credit | US$180/Mwh | Produced from solar projects that can sell the power into New Jersey. |
MA SREC | Massachusetts Solar Renewable Energy Credit | US$280/Mwh | Produced from solar projects that can sell the power into Massachusetts. |
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