FINANCIAL TIMES 🔒| The EU decided long ago that if it was going to effectively cut pollution then it needed to put a price on carbon, and over time that price had to rise. Some of the world’s biggest oil traders and hedge fund managers now appear to believe it.
In the past four months, the price of European carbon allowances — tradable securities that dictate how much it costs power stations and industry in Europe to emit a tonne of carbon dioxide — have soared to a near record high above €30. In turn they have raised the cost of polluting for businesses such as electricity utilities and will soon do so for manufacturers of products like cement and steel.
To veterans of the niche carbon trading industry, which was established 15 years ago, the price rise made little sense. Coronavirus lockdowns and the resulting deep global recession have cut emissions across Europe as factories have slowed and power demand has fallen. Prices should, they argue, be going down not up.
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