What impact would a recession have on the EU carbon market?
As fears grow that economic activity could slow sharply in the face of inflationary pressures, its natural to ask what impact a recession will have on the world’s largest carbon market.
There have been three notable economic events during the history of the EU ETS: The Great Financial Crisis (GFC) of 2008/09, the European sovereign debt crisis of 2011/12, and most recently, the global Coronavirus induced lockdowns of 2020. Each of them unique in their own right, but they hold valuable lessons for todays market.
What can we learn from past economic turmoil and what it might mean should recession strike again in 2022 or beyond?
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