Acting pricey,Why is a tonne of tradable carbon worth US $5 in India and US $27 in Europe?
Within the European Union, carbon is traded at US $26.7 per tonne of carbon dioxide equivalent. However, outside Europe CERs are being traded for a pittance. The only advertised price is by the World Bank, which pays about US$ 5. Other deals are being made in the range of US $5-10. It isn't clear why this price difference exists. Ishani Chattopadhyay, director of Ecosecurities, India, a UK-based carbon credit trader that buys CERs from India for sale in Annex I countries, says that there are risks operating in developing countries. CER are sold in deals where prices are not revealed, so a fair price is difficult to arrive at. "This is the old commodities problem again,' says Mukul Sanwal, special advisor, UNFCCC, referring to the situation where commodities like coffee are sold at subsistence levels in developing countries, yet earn huge windfalls for companies in the developed world. Clearly, non-transparency makes for an unfair market in the interest of the rich buyer.