Analysis and consulting firm Point Carbon predicts that the global carbon market will see a more than 50% increase in trading volume for 2008.

Point Carbon forecasts 4.2 billion tons of carbon emissions will be traded during 2008, up 56% from last year. At today’s prices, that would make the
market worth 63 billion euros (US$92 billion), it says.

The European Union Emissions Trading Scheme is expected to remain the dominant market, predicted to be worth 46 billion euros (US$68 billion) in 2008. Options and auctions will contribute to the increased volume in the EU scheme this year, Point Carbon said.

“We anticipate growth for several reasons. Primarily, the tightness of the Phase 2 cap will increase the traded volume compared to 2007 simply because more players are short of allowances. The proposed EU climate and energy package of January 23 of this year further strengthens this tightness,” said Kjetil Røine, manager of Point Carbon’s carbon market research team, in a release.

Point Carbon also forecasts increased volume from a number of new markets, including the U.S. 10-state Regional Greenhouse Gas Initiative, Kyoto country emission allowances, and offset trades for future federal cap-and-trade schemes in the U.S., Australia and Canada. In total, carbon markets outside the EU ETS and CDM are predicted to see transactions worth 1.5 billion euros(US$2.1 billion) in 2008.

“We now see new emissions trading schemes developing worldwide contributing to a significant momentum in the global carbon market in 2008,” Røine commented. “Worldwide policy decisions and signals could potentially change the actual traded volumes in 2008.”