The FT recently reported that 2011 is set to be the 10th hottest year on record (going back 160 years) and in fact, it is the hottest year in which there is a cooling La Nina weather pattern. This is based on the latest report by the Intergovernmental Panel on Climate Change, The UN body for reviewing research on climate change.
The Intergovernmental Panel on Climate Change has published a series of reports on the eve of the UN climate conference in Durban, showing that the human actions and green house gasses are responsible for rising temperatures. However, there are many skeptics, including the Global Warming Policy Foundation and the writers of freakonomics.
In the meantime, the price of carbon credits continues to fall, down from approximately 10 Euros in August 2011 to less than 7 Euros in November 2011. By way of comparison, most analysts estimate the price of carbon needs to be>$40 by 2020 to result in a meaningful decline in carbon emissions. Are these low prices for carbon a sign of a dis-functional market?
Perhaps once the science regarding GHG and global warming is sorted out, we need to make some structural changes to cap and trade or use another mechanism, like a carbon tax.
Some useful links: