Kyoto Carbon Credits Have Doubled as BRIC Countries Negotiate Hard on Paris

By Mathew Carr

April 12, 2021 — LONDON: Kyoto carbon credits have more than doubled since December, as emerging countries negotiate to protect the value of their early-emissions-cutting effort in global climate negotiations.

Prices are still very low compared with those being enjoyed by sellers in the EU carbon market, the world’s biggest.

Emerging countries are wanting at least a portion of Certified Emission Reductions created under the UN Clean Development Mechanism allowed for use to meet targets in the Paris era, which begins this year. The CDM was created under the Kyoto Protocol, a multilateral agreement that set targets only for wealthy countries.

I spoke with one person who was involved in a CER transaction Friday for about 60 euro cents a metric ton, citing supply that seemed to be waning. Contracts were less than 30 cents a ton last December.

EU carbon prices, meanwhile, are at record levels. Futures were up 1.9% on Monday to 44.47 euros per ton as of 4:15pm in London, according to ICE Futures Europe.

Countries are seeking to set rules for carbon markets under Paris during the next weeks and months. UN envoys are scheduled to meet in November in Glasgow for climate talks.

Some nations want to limit use of existing emission credits to prevent oversupply under Paris. Boosting the ambition of targets under Paris would be another way to deal with Kyoto-era supply.

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