Goldman Sees Historic Tipping Point Hitting Carbon Market

By Frances Schwartzkopff
Bloomberg Green
August 5, 2024
Category: Finance & Economics
Region: International

The cost of emitting carbon dioxide into the atmosphere is set to decouple from gas prices in the European Union, marking an historic shift in the dynamic between the two markets, according to the EMEA head of natural resources research at Goldman Sachs Group. The EU is facing “a complete break from the historical relationship where lower gas always meant lower carbon,” Goldman’s Michele Della Vigna said. The development reflects the changing dynamics affecting the carbon market, including shrinking emissions caps, with industry replacing power producers as the biggest buyers of permits to pollute and “a complete change in the gas market,” he said. Russia’s invasion of Ukraine triggered a new wave of energy investment in Europe. …Goldman predicts that infrastructure investments will drive up global liquid natural gas supplies by 50% in the next five years, leading to a halving of gas prices over the period.

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