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Would the demand for Emissions would go up or down or stand as it is?

The Wall Street guys would like to think they are centre of the Universe,market up/down if you don’t sell shares its all a bit academic,in fact some good buying any time soon.
Carbon Markets will build as governments around the world take on new responsibilities

The demand can go down as the manufacturers have to cut down their productions due to lack of demand for the produced goods in the market. Many of them even will shut down due to liquidity crunch and unavailability of ready credit. Overall, the demand for carbon will decline..

Carbon markets can include Renewable Energy Certificates, Abatement Certificates, Financial Rebates, etc… The markets for these may vary depending on whether a firm is more established or a start-up. However to the extent that some carbon credits will result in a net lower cost; the global recession will increase interest. The tougher times are the more organizations are focused on the bottom line and need to squeeze every penny of benefit available.

Analyst firm New Carbon Finance predicts a soar in carbon credit prices in the next several years and beyond, especially in regulated markets. The potential price hike is attributed to reduction in the emission caps imposed upon those companies operating in emissions trading systems (like the European Union Emission Trading System or Regional Greenhouse Gas Initiative). Additionally, New Carbon Finance analysts predict demand for credits will increase as it becomes more and more expensive for companies to cut their own GHG emissions.
In the voluntary carbon market, green branding and the image of companies doing their part to counteract climate change is important and relatively cheap to achieve, and therefore voluntary carbon offsetting is probably not going to be impacted in the early stages of the financial crisis.
A tighter economy could dent funding for carbon reduction projects or shift investment into sustainable energy such as windfarms, which is less vulnerable to volatility swings.
A Senior Consultant at EcoSecurities notes that a reduction in investment capital would mostly affect large offsetting projects that require more investment at the outset.

In regards of the demand for carbon credits the recession will have a negative impact on electricity consumption both as a result of less industrial production but also more effort companies will perform to reduce their cost. It should be notice that even if the electricity prices went slightly down, they are still at a very high level in regards of long term trends. The reduction of electricity demand will in turn reduce the demand for marginal electricity which is usually produced with gas turbine or coal plant. The result will thus be a reduction in regulated carbon credit demands.
The second consequence will be a lack of funding from banks and much more difficulties for new green projects (PV, wind) to be funded. Also those companies will not have an easy access to fund rising on the stock markets. The consequence will thus also be a reduction in CER’s supply for south american markets.
For what’s about China which is still the first supplier of CER’s, they fortunately had +1200 billion $ in cash and thus might be able to suffer much more than the other zone.
Globally my perception is that the impact on prices in the short run will be negative.

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