Recent polls ahead of the UK General Election that takes place this weekend indicate that the Labour Party could return to power after 14 years of Conservative rule. The labourers are leading by a large margin reflecting widespread dissatisfaction of the British people with how the government has run the country.

According to Bloomberg, the party of Prime Minister Rishi Sunak is at 20,1% while the Labour is at 40,5%. The Reform UK party which is ruled by Nigel Farage, Brexit’s biggest cheerleader, holds a record 16,2% while the Liberal Democrats are at 11,4%.

The return to power of the Labour Party increases the possibility of linking the UK’s emissions trading scheme (UK ETS) with the EU ETS. “Both the Labour and Liberal Democrat parties have indicated they would seek closer alignment with the EU’s carbon market if elected,” writes ENDS Europe. Indeed, Labours have declared that they want to improve relations with the EU while Liberal Democrats have “a long-term ambition to rejoin the EU.”

Mark Lewis, the head of climate research at commodities hedge fund Andurand Capital Management, noted in an interview for OPIS, that “it makes political sense, and…it makes economic sense,” referring to the linkage between the two carbon markets. Lewis also added that  “this will be an interesting narrative in the second half of the year.”

Furthermore, experts quoted by Carbon Pulse predicted that the merge with the EU ETS could take place within a few years, “pushing UK prices up to parity as soon as the intention is signaled.” 

Meanwhile, the rebound in carbon prices continued yesterday, with EUAs having four consecutive days of gains. “Rumors of a potential link between the EU ETS and the UK ETS are bullish for the carbon market,“ said Monna Dimitrova, at Homaio, quoted by Montel News.