Russia to Sit on $56 Billion of CO2 Credits, Awaiting Kyoto Successor Before Cashing In
Submitted by EnergyTechStocks.com
Russia reportedly plans to sit on $56 billion worth of carbon credits until after 2012 rather than sell them in the trading market created by the Kyoto global-warming treaty.
The implications of this are significant. It means there is less chance the market price of a carbon credit will implode during the global recession. In turn, this makes it more likely that carbon trading, although highly controversial, will be seen in 2009 as a financial success worthy of being extended beyond 2012 under a new international treaty still to be negotiated.
All this could have significant bearing on the deliberations in Washington expected to occur as soon as Barack Obama takes office over whether carbon should be reduced through trading or taxation. Obama personally favors trading but many environmental leaders want a carbon tax, arguing that trading doesn’t accomplish actual CO2 reductions. Meanwhile, many business interests can be expected to fight again both a tax and a trading system
The more successful carbon trading appears to have been in Europe, the more likely Wall Street will push for a national trading system in the U.S. Should Wall Street get its carbon trading market, profits of those investment firms that have survived the credit crisis could swell on trading and project origination fees.
