North American carbon market volume to double in 2012, says Thomson Reuters Point Carbon

Washington (10 January 2012)

This year, the Western Climate Initiative (WCI) will overtake the Regional Greenhouse Gas Initiative (RGGI) as America’s largest carbon market and there will be a near doubling of carbon traded in the US, predicts Thomson Reuters Point Carbon, the leading provider of market intelligence, news, analysis, forecasting and advisory services for the energy and environmental markets.

“For US carbon markets, 2012 will be an important year with several key policy decisions due and significantly increased volumes of trade expected as a result of two WCI allowance auctions and increased activity in the secondary market”, said the firm’s North American carbon market analyst Ashley Lawson. 

Thomson Reuters Point Carbon thinks it likely that early auctions in California and Quebec will distribute some 24 million metric tons (Mt) of 2013 allowances in 2012 with the remainder of the approximately 180 Mt cap freely allocated to emitters or auctioned in 2013. “We foresee the primary market dominating WCI transactions in 2012, with a total market size of 28 Mt and a value of $392 million, up nearly tenfold from 2011 and overtaking RGGI as the biggest North American carbon market in value terms”, Lawson explained.

Thomson Reuters Point Carbon predicts that this year the total North American carbon market volume traded will be 179 Mt, with a value of $782 million, roughly double the 2011 volume and value. “The dramatic increase will be driven by the higher allowance prices in the WCI compared to RGGI’s”, Lawson underlined.
Lawson concluded “We do not expect North American federal governments to take up carbon market legislation as all eyes watch the November US presidential elections, but the regional programs will certainly push ahead”.
Note to editors

• The WCI is a collaboration of independent jurisdictions who commit to work together to identify, evaluate and implement policies to tackle climate change at a regional level. Five jurisdictions; California, British Columbia, Quebec, Ontario and Manitoba are considering implementing a cap-and-trade program as one policy to reduce their greenhouse gas emissions.
• California’s cap-and-trade program will initially cover only emissions from power generation and large industrial facilities. Compliance in these sectors will begin in 2013. Starting in 2015, the program will expand to cover emissions from the combustion of fuels, including transportation fuels.
• California Carbon Allowances (CCAs) are the tradable units under California’s greenhouse gas cap-and-trade program.
• RGGI is a mandatory cap-and-trade system covering the power sector in 9 Northeastern and mid-Atlantic US states that entered into force in 2009.


For further information, or to see a copy of the analysis, please contact:

Candida Jones
PR Manager, Thomson Reuters Point Carbon
Mob: +44 (0) 777 5754 763
E-mail: candida.jones@thomsonreuters.com

Ashley Lawson
Carbon Market Analyst, Thomson Reuters Point Carbon
Mob: + 1 202 460 5702
E-mail: ashley.lawson@thomsonreuters.com

Elizabeth (Lisa) Zelljadt
Thomson Reuters’ Regional Editor for North America
Mob: +1 413.210.8663
E-mail: elizabeth.zelljadt@thomsonreuters.com