How should a company go about forecasting prices of Carbon Emission Rights (CERs)? If this was a traditional commodities market, such as coffee or oil, there would be lots of past data one could use, along with experience about the factors likely to influence demand and supply, and hence market prices. For many [...]

The Economist today has an article (subscription required) about Britain’s carbon emissions policy. The Labour Government committed to 20% reduction in greenhouse gas emissions between 1990 and 2010, well above the 12.5% required by the Kyoto Treaty. Although they fell initially, emissions since 1999 have fluctuated around the same level, even rising slightly [...]

The Financial Times reported here (posted online 2005-11-17, in print edition 2005-11-18, subscription may be required) that wholesale gas prices have risen dramatically in Britain:
“Wholesale gas prices have almost doubled in the past week, with the cold snap stoking fears about Britain’s gas supply this winter.
Gas for delivery the next day touched 80p a [...]