DBLM Solutions

Luciano Magliocco +353 87 9051928 (Mobile) dblmluc (SKYPE) luc@dblmsolutions.com

DBLM Solutions Carbon Update

Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at 3.03. There hasn't been much movement since the big fall last Tuesday but negotiation continue behind the scenes. Yesterday, in Dublin, environmental ministers from each state meet to iron out the next move. Today, they will discuss policies for 2030 with National energy chiefs so soundbites may well give the market direction. It looks like any outcome will be purely political, Germany holds the key to any intervention and Merckel may wait to overrule her junior coalition partner until a more astute time, such as closer to the September elections. An interesting report has been published recently that sheds light on efforts to reduce global warming to 2 degrees Celsius and what is actually happening on the ground. Research by Carbon Tracker and the the Grantham Research Institute show that 200 major public listed companies have 762 billion tonnes of carbon dioxide held in their reserves of coal, oil and gas. In addition, the reserves basically underwrite a share value of $4 trillion and service $1.5 trillion of corporate debt. The study showed to comply with the 2 degree Celsius threshold agreed in Copenhagen, these companies would only be allowed to emit 125 billion to 275 billion tonnes of Carbon Dioxide. As you can see the numbers just don't add up. This situation has been labeled as the carbon bubble.
Dec 13 EUA

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