There are different parts of the global carbon market. The EU emissions trading system is one part. I believe that Aldyen Donnelly, in her initial remarks, was referring to the so-called “hot air” credits that in theory are available to be traded under Kyoto.
I might have time to elaborate in a later response to a later question, but on the specific question of the EU market, first of all, the EU market is essentially in a pilot phase currently between 2005 and 2007. Governments in fact didn't have all the data they needed to make allocations of permits or any other equivalently set targets for the first phase, and that led to a price correction when the data became clearer.
Having said that, the price of units that are being traded for the second phase of the EU system, that is to say the Kyoto phase 2008 to 2012, remained quite high. I believe it stayed at or around €20 a tonne. I don't think a market that's trading at €20 a tonne is a market that is fatally oversupplied. Furthermore, the European Commission has been very clear--in fact, this has been reported on in the media recently--that for the second phase it's going to be very tough in requiring countries to allocate fewer permits so that we can be sure the market is actually short and producing real reductions.