Dear FT, the climate bathtub analogy + carbon market’s future seminar summary, Trafigura etc (2):

By Mathew Carr

Sept. 14, 2023 — The Financial Ttimes Future of Carbon Markets seminar on Thursday concluded that functioning co2 programs under a decent global system were still a couple of years off (as they always are, it seems).

They were meant to start in 2013, then they were put back to 2020. Now, it’s 2025, apparently.

Republishing this chart, below, today (originally published November). Yes, the bathtub came up in the seminar. Please make the chart your own, FT. There’s no copyright, as you can see below.

Plenty of iterations here, also:

Illustration Source: CarrZee

Everyone’s taking a big bath

The panel is worth a watch, for sure (not sure it will be for public consumption for free)

Trafigura’s Hauman said the carbon markets were already developing to be like the market for crude oil, with a main anchor price [perhaps the EU one for now?] and with other carbon assets priced as premia or discounts on that anchor.

The Paris climate deal target to keep heating below 1.5C is already effectively the cap in a global cap and trade system (the far edge of the bathtub).

The World Bank’s Srinivasan said nations will probably want to create and deal in their own carbon assets. A carbon market club is under development, but there’s some reluctance to embrace the EU market as the anchor. Meanwhile, we’ve almost run out of spare space under the cap — the bath is almost full.

Abaxx’s Greely said scooping water out of the bath (above) via carbon credits could become a nice business.

CDP’s DiPerna said Africa had its eye on this business [yet the capital aint flowing]. The world will potentially get real messy if a working global carbon market structure isn’t finalized within three years, she said.

The problem is, the public’s not on board, so neither are the politicians.

The folks who filled up the bath already are not owning the impending disaster they created. Putting a price on all emissions under a UN system would force them to own it. That still might happen.

FT’s Shephard said the newspaper might do something with the bathtub to help educate the public.

(Minor tweaks Friday, headline improvement; Adds to conclusion; More to come)

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