The global carbon market grew faster than expected in terms of volume and value during 2008, according to Oslo, Norway-based research firm Point Carbon.

Overall, 2008 saw 4.9 billion tonnes of carbon dioxide equivalent (CO2e) change hands, up 83% on 2007, according to a recent report.

“Even Point Carbon did not fully predict the extent of the dramatic expansion in global carbon trading. This overshoot of our original forecast is largely due to brisk EU allowance (EUA) trading in the fourth quarter and to high activity in the secondary CER market,” said Endre Tvinnereim, senior analyst and author of the report.

The carbon market’s total value for 2008 was estimated at 92 billion euros (US$125 billion), more than double the 40 billion euros it was worth in 2007. This results in a present weighted average, global carbon price of US$26 (19 euros) per ton of CO2e.

It reports that within the EU’s Emissions Trading Scheme, a total of 3.1 billion EUAs were bought and sold in 2008, double the 2007 figures and with a total value of 67 billion euros (US$90 billion). Over 350 million EUAs changed hands in October alone, according to Point Carbon. It notes that the EU ETS accounts for two-thirds of the total carbon market volume and three-quarters of its value.

“This is all the more remarkable since the prices of EUAs have in fact dropped significantly in the past months. Lower allowance prices also highlight the flexibility of a cap-and-trade scheme in automatically adjusting the price of carbon in the face of lower emissions,” said Veronique Bugnion, managing director of Trading Analytics and Research at Point Carbon.

The largest trading platform was still the over-the-counter market, which traded 49% of the volume, with the share of carbon deals traded by exchanges, such as Bluenext and the European Climate Exchange, up to 37%. In the final month of 2008, Paris-based Bluenext saw the majority of carbon deals, enabling it to overtake the European Climate Exchange as the world’s largest carbon exchange.

Within the Clean Development Market segment of the market, 1.6 Gt CO2e changed hands last year, worth 24 billion euros (US$32 billion). The secondary market in Certified Emissions Reductions totaled 1 Gt in 2008, corresponding to two-thirds of the total CER market volume. In all, the CER market is up 70% from 2007 and has doubled in value, the firm said.

Other markets saw 123 Mt CO2e change hands, valued at 481 million euros (US$640 million). The largest segment in this category was the Regional Greenhouse Gas Initiative, the first mandatory, market-based effort in the United States, where 70 Mt CO2e changed hands last year.

IE