Support
International Emissions Trading Association (IETA)
IETA has about 170 member companies.... It was the largest non-government delegation at the COP15 conference in Copenhagen in December 2009.
http://www.marketswiki.com/mwiki/International_Emissions_Trading_Association#Membership
Its members include :-
BP, Conoco Philips, Shell, E.ON , EDF, Gazprom , Goldman Sachs, Barclays, JP Morgan Chase, Morgan Stanley..
http://www.ieta.org/index.php?option=com_content&view=article&catid=19%3Adefault&id=168%3Aour-members&Itemid=82
http://www.marketswiki.com/mwiki/International_Emissions_Trading_Association#Membership
Their aim
The establishment of effective market-based trading systems for greenhouse gas emissions by businesses that are demonstrably fair, open, efficient, accountable and consistent across national boundaries; and maintaining societal equity and environmental integrity while establishing these systems.
Friends of the Earth on IETA
The IETA is extremely active in the international climate negotiations, carrying out lobby activities and side events aimed at promoting the uptake and expansion of carbon trading globally.
Carbon trading is a false solution to the climate crisis. All existing and planned carbon trading schemes are based on offsetting – an escape hatch for industrialised countries and polluting industries from the deep and urgent emissions reductions that are needed to stop the climate crisis getting worse.
BP calls for ratification of Kyoto Protocol
The multinational BP has challenged
the Australian Government to ratify the Kyoto Protocol on
climate change. BP's South Australia and Australasia president,
Greg Bourne, has said that Australia's economy will suffer if
the nation doesn't commit to ratifying the protocol which
regulates greenhouse gas emissions.
http://www.abc.net.au/pm/stories/s410744.htm
Shell Canada
The debate about climate change is over and we need to take action," says Ertel, Shell Canada's climate change expert.
Europe Can Lift UN Carbon Market From Cancun Gridlock, Gazprom Says
Europe needs to reinvigorate the world’s second-biggest emissions market as global climate talks to reduce greenhouse gases stall, the head of a carbon-trading unit of Russia’s OAO Gazprom said.
United Nations carbon offsets for delivery in a year fell 4 percent last week amid signals that differences between 190 developing and industrial nations may preclude a binding treaty at the climate meeting that started Nov. 29 in Cancun, Mexico.
The $2.7 billion UN Clean Development Mechanism is an offspring of the 1997 Kyoto Protocol, which expires in 2012 unless governments decide to extend it. Carbon offsets generated by the CDM may be used for compliance in the European Union’s emissions-trading system, the world’s largest cap-and-trade program, also known as the EU ETS.
Finance
Carbon trading could be worth twice that of oil in next decade
The carbon market could become double the size of the vast oil market, according to the new breed of City players who trade greenhouse gas emissions through the EU's emissions trading scheme.
The ETS market may see $3tn (£1.8tn) worth of transactions a year in the next decade or two, according to Andrew Ager, head of emissions trading at Bache Commodities in London, with it even being used as a hedge against falling equities or rising inflation. "It is still a relatively new industry with annual trades of around €300bn every year. But this could grow to around $3tn compared to the $1.5tn market there is for oil," says Ager, who used to be a foreign currencies trader.
The speed of that growth will depend on whether the Copenhagen summit gives a go-ahead for a low-carbon economy, but Ager says whatever happens schemes such as the ETS will expand around the globe.
http://www.guardian.co.uk/environment/2009/nov/29/carbon-trading-market-copenhagen-summit
Carbon Trading May Dwarf That of Crude Oil
“I’m estimating carbon markets could be worth $2 trillion in transaction value – money changing hands – within five years of trading (starting),” says Bart Chilton, a Commodity Futures Trading Commission (CFTC) commissioner, who's also chairman of its energy and environmental markets advisory committee. “That would make it the largest physically traded commodity in the US, surpassing even oil.”
http://www.cnbc.com/id/32540966
Paven Sukhdev, a career banker for Deutsche Bank who now works on the issue for the UN and EU, argues that at least 65% of reductions must be made within developed countries. That means firms such as AEP may still be limited in how much they can invest in projects abroad. Firms in developing countries may not have to buy credits at all. That has led to worries in the City that there won't be enough money to buy all the forest carbon. London's financial centre is the main home to the incipient global carbon market. Prof Heal believes that in a decade, the trade could be worth trillions of dollars.
http://news.bbc.co.uk/1/hi/business/8359397.stm
Carbon Derivatives
Carbon Capitalists Warming to Climate
Market Using Derivatives
As a young London banker in the early 1990s, Blythe Masters of JPMorgan Chase was part of JPMorgan’s team developing ideas for transferring risk to third parties. She went on to manage credit risk for JPMorgan’s investment bank.
Among the credit derivatives that grew from the bank’s early efforts was the credit-default swap. A CDS is a contract that functions like insurance by protecting debt holders against default. In 2008, after U.S. home prices plunged, the cost of protection against subprime-mortgage bond defaults jumped. Insurer American International Group Inc., which had sold billions in CDSs, was forced into government ownership, roiling markets and helping trigger the worst global recession since the 1930s.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aXRBOxU5KT5M
Could Cap and Trade Cause Another Market Meltdown?
You've heard of credit
default swaps and subprime mortgages. Are carbon default swaps
and subprime offsets next? If the Waxman-Markey
climate bill is
signed into law, it will generate, almost as an afterthought, a
new market for carbon derivatives. That market will be vast,
complicated, and dauntingly difficult to monitor. And if
Washington doesn't get the rules right, it will be vulnerable to
speculation and manipulation by the very same players who
brought us the financial
meltdown.
Cap and trade would create what Commodity Futures Trading commissioner Bart Chilton anticipates as a $2 trillion market, "the biggest of any [commodities] derivatives product in the next five years."
http://www.motherjones.com/politics/2009/06/could-cap-and-trade-cause-another-market-meltdown?page=1
Michelle Chan, a senior policy analyst in San Francisco for Friends of the Earth, isn’t convinced.
“Should we really create a new $2 trillion market when we haven’t yet finished the job of revamping and testing new financial regulation?” she asks. Chan says that, given their recent history, the banks’ ability to turn climate change into a new commodities market should be curbed.
“What we have just been woken up to in the credit crisis -- to a jarring and shocking degree -- is what happens in the real world,” she says.
Even George Soros, the billionaire hedge fund operator, says money managers would find ways to manipulate cap-and-trade markets. “The system can be gamed,” Soros, 79, remarked at a London School of Economics seminar in July. “That’s why financial types like me like it -- because there are financial opportunities.”
Masters says U.S. carbon markets should be transparent and regulated by the Commodity Futures Trading Commission. Standardized derivatives contracts -- securities that can be bought and sold by anyone -- should be traded on exchanges or centrally cleared, she says. The British-born Masters, who has an economics degree from Cambridge University, took over JPMorgan’s commodities business in 2007
http://www.bloomberg.com/apps/news?pid=20601086&sid=aXRBOxU5KT5M