[Episode #76] – Carbon Clampdown
The European Emissions Trading System (EU-ETS) has famously been dysfunctional for most of the past decade, unable to support a carbon price that would be an effective tool for energy transition. But that’s about to change: the EU is embarking on a plan to fix its carbon trading market. But will this be enough? According to calculations by our guest in this episode, there is reason to hope that the emissions trading surplus will be removed by 2023 and carbon prices will rise back to a meaningful level, but that may still not be high enough to meet the goals of the Paris climate agreement. So what can be done about it? Will the prospect of Brexit ruin the EU-ETS market? Can carbon prices rise high enough to sustain carbon capture and sequestration technologies? Will we even need carbon prices in the future, given the falling costs of wind and solar? Are asset managers finally getting smart about understanding the risk of stranded fossil fuel assets in their portfolios? And are risk assessors finally beginning to grapple with climate risk?
Mark Lewis, now Head of Research and Managing Director at Carbon Tracker, returns in this episode to dig into details of European carbon market reform and explain what it all means…as well as outlining a fresh way of looking at services delivered by different energy sources, and the implications of this perspective for the oil sector in particular.
Geek rating: 8