The first annual increase in carbon market trading since 2011 is set to occur in 2014, according to Bloomberg New Energy Finance.
It is forecasting that the value of the carbon market will reach €46 billion (£38 billion), which will be an increase of 15 per cent on 2013. However, it will be significantly down on the €98 billion value in 2011.
The primary driver of this year’s increase will be the plan to postpone or ‘backload’ auctions of European Union carbon allowances that would otherwise have taken place in 2014-16 into later years.
As a result of this, Bloomberg New Energy Finance expects carbon prices to rise to €7.5 per tonne this year, compared to €5 per tonne at present.
Bloomberg New Energy Finance head of the carbon analysis team Konrad Hanschmidt said: “World carbon markets have suffered some setbacks in recent years, notably with the recession-fuelled fall in European prices and efforts by the new Australian government to abolish that country’s carbon trading scheme.
“But new carbon-trading programmes are emerging in China and South Korea, and policy-makers in Europe are taking clear steps to ensure that carbon prices drive future emissions reductions.”