[UPDATED: Correcting VCS average price to $5.70, not $7.60 as NCF originally stated]

The voluntary carbon market defied the global financial crisis during September and October but appears to have felt the impact in November, according to New Carbon Finance.

By the end of October the global crisis had impacted little on the voluntary market with prices and volumes for wholesale VERs both increasing, but the market has started to soften this month with evidence of lower prices emerging, Milo Sjardin, the head of NCF’s North America operation, told Carbon Positive.

The US and UK-based carbon market analysts found average prices for wholesale VERs in over-the-counter transactions rose to $8.70 in September-October from $6.30 in the previous two months. However, the rise was influenced by a couple of high-priced transactions going through during the period, NCF said.

A “flight to quality” continues in the market with VER project developers increasingly seeking to verify their emissions reductions to high standards. The Gold Standard and the California Climate Action Registry (CCAR) are the premium carbon verification standards, attracting the highest prices for VERs accredited to them.

These two standards accounted for almost 60 per cent of the 2.9 million tonnes of secondary VER transacted volumes identified by NCF during September-October, while the Voluntary Carbon Standard (VCS) accounted for 35 per cent.

While unable to confirm latest prices, Sjardin said the premium end of the market can be expected to fall furthest in the current downbeat economic climate. There have been reports in the market of Gold Standard VER prices slipping as much as €4 per tonne from the €15 ($19) enjoyed previously. MF Global puts Gold Standard issued credits at €11 and unissued primary market prices at €7-8.

During the previous two months, CCAR prices dropped slightly to an average of $10.10 while VCS prices fell to $5.70 from $7.30, NCF found. The sizeable 22 per cent drop is attributed to a sell-off of VCS credits verified to an early version of the standard.

Prices for VERs from forestry projects rose from $5.20 to $5.80 while renewable energy credits jumped $4.60 to $10.80. It was in renewables that the high-priced transactions occurred – under the Gold Standard – pushing up  this sector by 60 per cent and impacting the overall market.

At odds with the prices rises seen in over-the-counter transactions, prices on the Chicago Climate Exchange have slumped. It’s been a volatile year for the CCX with prices traversing a range of $1 to $7.50 per tonne. The 2008 CFI vintage is currently trading at $1.45.

Prices rose in the lead up to the US Presidential election and anticipation of a future national emissions trading scheme, but questions over the quality of CCX carbon offsets, along with the general financial gloom, appear to have sent prices tumbling since. The market appears to have adjudged the CCX offsets program as not a good “pre-compliance” option, that is, one that offers a good dress rehearsal for the obligations companies might face under a future mandatory scheme.