Static emissions price “does not reflect fundamentals”

The European emissions trading market, with its static price over the last four to five weeks, “is not a good market,” and does not reflect fundamentals, said Chris Rowland, managing director of utilities research at Dresdner Kleinwort Wasserstein.

The price of an emissions credit, which permits a company to produce 1 metric ton of CO2, has been just under 8 euros since October, despite huge fundamental changes which should have impacted price that month, such as Russia’s signing up to the Kyoto Protocol and the European Commission’s approval of a further 8 countries’ National Allocation Plans.

Under the Kyoto Protocol, Europe has a target of reducing carbon emissions by 8% from 1990 levels by 2012, and the National Allocation Plans