Carbon prices dropped sharply on Monday in response to disappointment at the outcome of the United Nations climate conference in Copenhagen, which ended with an agreement that fell well short of its goals for significant cuts in greenhouse gas emissions, reports FT.
European Union allowances for December 2010 delivery, the benchmark contract for pricing European carbon emissions, dropped 8.7 per cent to €12.40 a ton in early trading before recovering slightly to trade 5.7 per cent lower at €12.80 a ton.
UN-backed certified emissions reductions for December 2010 delivery fell 6.6 per cent to €11.05 a ton, their lowest level since June 23.
“The lack of a political framework is seen as bearish because a lot of hedge funds and financial institutions had pinned their hopes on quite a significant and important alternative to other commodities markets,” FT quoted Jean-François Cauvet at Paris-based carbon market broker COER2 as saying.
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