Carbon market tremors
“History doesn’t repeat itself but it often rhymes”
-Mark Twain1
Financial markets often exhibit similar patterns in the event of a significant shock to market confidence - anticipating the potential effects, the impact and then the recovery.
Even if the cause and effects vary between market shocks how prices behave can tell us something about how the market may respond should it be buffeted a shock in the future.
With that in mind, could 2020 offer us a template for how the EU carbon market could recover from the shock of the Russian invasion of Ukraine and the subsequent market dislocation?