Berenberg Bank
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Mar 24, 2022 | 15:00 GMT

  • Lawson Steele Berenberg Bank
EU's Safety Valve against Energy Prices?

Originally designed as an offset programme to punish heavy emitters and speed the green transition, the price of carbon recently fell dramatically. How could this happen whilst carbon remains such a threat to the planet?

The sell off occurred because politicians are hamstrung when it comes to controlling the price of oil, gas and commodities. They might be able to lessen the pain of steeply rising input prices by issuing credits to lower the cost of carbon and ease the enormous strain on European industry.

We are not facing an energy/commodity price shock, we are already living through a price shock, whose effects are only just starting to be felt.

Think of the carbon price acting as a safety valve on an energy pressure cooker where the lid is about to blow off and you start to get the picture.

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