What the CDM needs most is clarity, especially regarding a framework post 2012.

Q&A - Alexander Winzer, Managing Director, Climate Corporation Emissions Trading GmbH

What do you think will happen to carbon prices in the future. Do you expect a high carbon price scenario in phase II?
The phase II EU Allowance price will be influenced by fundamentals such as power and gas but even more by political decisions, with the EU's proposal for phase III of the EU ETS being released in January08, the progress being made with the Bali roadmap-negotiations (from April08) and random decisions from potentially large players like the US, Canada or Australia being some of the main price drivers. I expect the carbon market to continue being an extremely volatile market with EUA prices ranging from EUR 20 to EUR 35 over the second commitment period.

How do you see the outcome of the Bali meeting?
I am torn between the frustrations of the tediously slow process including the lack of defined targets and an enthusiasm that is spurred by the last minute compromise that could establish a basis for the world's biggest emitters to finally speak with one voice when it comes to tackling climate change. It remains to be seen though if this compromise will bear any fruit or if the whole process will get lost in details.

What do you think will be the impacts of the Bali meeting in regards to the CDM?
What the CDM needs most is clarity, especially regarding a framework post 2012. Bali has not been able to deliver this clarity which will reduce investments in the CDM and thus in clean energy technologies. With a global framework not being in place before the end of 2009 but demand for project based credits probably soaring from 2010 it might be difficult to bridge the arising supply-gap at the end of phase II and in early phase III.