Carbon markets


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I am developing this presentation on Carbon Markets despite the recent downturn in their development. The lack of clarity relayed from the Copenhagen Accord has really hurt the development of these ecosystem service markets.

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  • Insert graphic!£ = British Pounds€ = EurosAn explanation of the spot market comes a little later. We should view this as a learning curve. Mistakes will be made as implementing this cap onto an economy that was built upon the cheap, available, fossil fuel beneath us.
  • Delete unimportant (most) dates along x-axis. This represents Phase I & Phase II of the EU ETS. Allowances were fully bankable WITHIN each phase. They were not bankable between phases. This is what led to the drop in EUA 2007 volumes/prices. The worldwide economic recession can be seen between the July 2008 and March 2009 periods. This happens simply because individuals and businesses have less cash flow, and require less power. Less power generation creates lower emissions and reduces the demand for carbon credits.
  • Where’s Norway?United States – Russia – India – Indonesia – Braizil –
  • Simple illustration of how command and control from the EPA or Supreme Court would compare to cap & trade. Flexibility for firms to find the lower MAC is what separates the market mechanism of emissions trading. Strong internationally? Offset there and meet your requirement here in the US.
  • Since the inception of the CDM there have been 290 million CERs issued. Point Carbon anticipates 1.78 billion CERs issued by the end of 2012.Consternation: Economic downturn and subsequent credit crunch hurting financing of projects CDM EB regulatory delays and transaction costs Lack of solid worldwide post 2012 policy.
  • In the US - EPA assessment tells us there is probably only going to be less than 500 million tonnes of domestic offsets available in the next 30 yearsThe UN issued just 1.5 million carbon credits last week, as delays continued to clog the pipeline.. You can see CLEARLY, that the standard of registration has increased over the last 4 years.This could be viewed as a response to those quick to dismiss the CDM as a “right to pollute”. Ok, picture this. The US offset market could require billions of tonnes of offsets. If domestic offsets are insufficient (they WILL be) then the demand for international offsets could be as much as 1.5 billion tonnes. With increasing scrutiny by the CDM (as as stand in for the international standard) there could be a serious bidding-up of offset projects around the world. This will only be increased as other countries mandate a carbon cap on their economies, creating THEIR OWN demand for domestic (international to us) and international offsets. Will there be enough to go around? Will they be fungible? Will they truly be additional? Will the increasingly onerous standards for project development make that 2.5 billion tonne allowance strategic reserve inevitable?If the strategic reserve is enacted repeatedly, will the planet suffer? Will it limit the effectiveness of HR2454 even further than environmental alarmists worry?
  • Carbon markets

    1. 1. What’s All the fuss about Carbon?<br />Explaining the emissions market<br />
    2. 2. World Carbon Markets<br />
    3. 3. Misconceptions About Carbon Markets<br />Existing carbon is not traded.<br />The reduction of carbon emissions into the atmosphere are traded.<br />Primary markets trade between firms in allowances issued by regulatory bodies. e.g. the auctioning of allowances. <br />Secondary markets involve the re-sale for profit or loss of carbon derivatives. <br />
    4. 4. Some Background<br />EU ETS allowance market is 75% of the total world carbon market<br />The average value of a single carbon trade is £50,000 (~75,000 USD)<br />In the first half of 2009 €8billion (~11.8 billion USD) worth of allowances were traded<br />¼ of these trades were on the spot market<br />
    5. 5. EU ETS History<br />
    6. 6.
    7. 7. States or companies can achieve their reduction targets without reducing their own emissions. Acquired emissions certificates can be traded.<br />Flexible mechanisms<br />There are a broad range of offset projects that could be specifically targeted to improve brand image or competitiveness. <br />Example: Duke Energy companies sponsoring local dairies for methane digesters plus solar on roves of their facilities. <br />
    8. 8. Long Delays Halve the Prospects of 2012 CER Deliveries<br />The CDM has been working through the same problems facing the many US protocols.<br />That is….how to make the program climate friendly without making it too onerous.<br />Under HR2454 two billion tons of offsets would allowed to meet emission reduction goals..split evenly between domestic & international sources. <br />
    9. 9. Increased Scrutiny by the CDM EB at Registration<br />
    10. 10. World Carbon Markets<br />