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Carbon Prices Buck the Recession

Geoff Riley

24th March 2009

The FT’s Lex column has a super piece today on what is happening to the price of carbon credits in the fledgling EU emissions trading scheme.

‘Cheap permits will give companies little incentive to invest in clean technologies in the near term. However, a drop in output should make it easier for countries to hit their long-term emissions targets’

Despite the descent of the Euro Area economy into recession and in particular a sharp decline in industrial production, the price of carbon credits has jumped higher from February 2009 lows. Prices are volatile and probably remain too low to give proper leverage to companies looking to invest in clean-energy technology. The column can be found here - good for supporting a topic that figures prominently on the OCR 2888 pre-release materials and also on the AQA unit 4 and 5 syllabus.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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