Carbon trading and market oversight issues
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Transcript of Carbon trading and market oversight issues
CARBON TRADING AND
MARKET OVERSIGHT ISSUES
Carbon Trade Ex, Chicago, ILSeptember 28, 2010
The Panel
• Jason Patrick, BAML
• Lenny Hochschild, Evolution Markets
• Randy Lack, Element Markets
• Jane Lloyd, Markit
• Moderator, Jeffrey Fort, Sonnenschein Nath & Rosenthal LLP; (SNR-Denton, US, LLP effective September 30, 2010)
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GHG Markets and Regulatory Oversight
Carbon Trade Ex – Carbon Trading and Market Oversight Panel
Chicago – September, 2010
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Evolution Markets Inc. – Proprietary & Confidential
Evolution Markets is a market leading commodities brokerage firm focused on all environmental and clean energy markets
Award Winning Brokerage Platform
• Carbon Credits & Allowances• Renewable Energy Credits • SO2 Emissions Allowances• NOX Emissions Allowances
o Houston/Galveston NOX
o RECLAIM (L.A. NOX & SO2)• Weather Derivatives
• Green Power Transactions• Biofuelso Ethanolo Biodiesel
• OTC Physical Coal• OTC Coal Derivatives• Natural Gas• Nuclear Fuels
ENERGY MARKETSENVIRONMENTAL MARKETS
Evolution Markets has pioneered many of the first carbon transactions in the various global carbon markets inclusive of the first EUA, Indexed CER, CER option and AAU transactions
Evolution Markets Inc. – Proprietary & Confidential
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Magazine Customer Survey
Top SO2 Allowance Broker
Top NOx Allowance Broker
Top EU GHG Allowance Broker
Top U.S. GHG Credit Broker
Top U.S. Renewables Broker
Top RECLAIM NOx Allowance Broker
Top U.S. Emission Reduction Credit Broker
Top Kyoto Credits Broker
Top Weather Derivatives Broker
*category runner-up
Best Broker, US Physical Forwards (Coal)
Best Broker, Europe ETS Carbon Credits
Best Broker, U.S. Environmental Products
Best Broker, Western U.S. Nat Gas Short-term
Best Broker, Western U.S. Nat Gas Long-term
Best Broker, U.S. Weather Swaps Brokerage
Best Broker, European Weather Derivatives Brokerage *
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2000 2001 2002 2003 2004 20072005 2006
Best Specialist Broker (‘08)
House of the Year:
European Emissions (‘07)
Weather / Emissions (‘04)
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2008
Carbon Market Awards 2005: Best Broker
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Leadership in the Markets We Serve
Evolution Markets Inc. – Proprietary & Confidential
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Magazine Customer Survey
Best Broker, Options
Best Broker, Secondary Market (i.e. issued CERS/ERUs)
Best Broker, North American Mandatory Markets (e.g. RGGI)
Best Broker, Offsets
Best Broker, SO2
Best Broker, NOx (Reclaim)
Best Broker ERCs
Best Broker, Renewable Energy Markets
Best Broker, Weather Risk Management, North America
Best Broker, Catastrophe Risk
Best Broker, NOx
Best Broker, Weather Risk Management, Europe
Best Broker, Weather Risk Management, Asia
*category runner-up
Best Broker, U.S. Coal
Best Broker, U.S. Renewable Energy Certificates
Best Broker, CERs , Primary
Best Broker, CERs, Secondary
Best Broker, U.S. Voluntary Emission Reductions
Best Broker, U.S. Weather Derivatives
Leadership in the Markets We Serve
2009
Specialist Broker of the Year (2008)
House of the Year: European Emissions (2007)
House of the Year: Weather / Emissions (2004)
Since Evolution Markets was founded in 2000, we have received 109 awards for excellence in brokerage from Environmental Finance and Energy Risk Magazines. Below you will find a sample of our most recent awards from 2009. For the full list our awards, please visit www.evomarkets.com
2009
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Magazine Annual Ranking
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Carbon Market Awards 2005: Best Broker
ELEMENT MARKETS US Emissions House of the Year - 2010
Launched in 2005, Element Markets has become the largest integrated project development and environmental credit marketing company in North America
Element Markets Business Units
Greenhouse Gas (GHG) and Emissions Services
Credit MarketingGHG Offset Projects
• Asset Management
• Credit Aggregation
• Credit Monetization
• Methane (Landfills, Coal Mines, Agriculture)
• Solar
• Wind
Renewable Energy Group
Credit MarketingWind/Solar/Biomass
Marketing Compliance SolutionsProject Types
• Experienced in developing wind, solar, and methane projects
• Current renewable pipeline represents >17,000 MMBtus / day of methane and ~100 MWs of solar PV (rooftop and utility scale)
• Partnered with International Power to advance Texas and Midwest wind assets
• Manage 18 projects on Climate Action Reserve, including the first listed Organic Waste project
GREENHOUSE GAS AND EMISSIONS GROUP
GHG and Emissions Marketing
Awards and Distinctions
Development Projects
• All North American GHG Markets
• All Regional and federal emissions markets
GHG and Emissions Markets
• Methane (Landfills, Organic Waste)
• Composting and Organic Waste Digestion
• Coal Mine Methane
• Other GHG Mitigation
• #1 Mandatory GHG Credit Dealer (2009) - Energy Risk
• #1 Voluntary GHG Credit Dealer (2008, 2009) – Energy Risk
• Runner-Up, Best Trading Company, N.A. Mandatory GHG (2009) – Env. Finance
• Top 5 Developer, North American Voluntary Greenhouse Gas Markets (2009) – Point Carbon
• #1 SO2 Dealer (2009) – Energy Risk
• #1 NOx Dealer (2009) – Energy Risk
• Best Trading Company, SO2 Emissions Credits (2008, 2009) – Environmental Finance
EM Project Pipeline Locations
RENEWABLE ENERGY GROUP
Renewable Energy Marketing
• All compliance and voluntary markets
• All Energy Efficiency markets
• Transacted ~19 million RECs to date
State RPS and Goals
Awards and Distinctions
• #1 US Renewable Energy Credit Dealer (2008, 2009) – Energy Risk
• Best Trading Company, North American RECs (2009) – Environmental Finance
• # 2 Best Solar Power Investor (2009) - Energy Risk
• # 3 Best Wind Power Investor (2009) – Energy Risk
Project Development
• Solar Photovoltaic
• Biomethane to Energy
• Wind
EM Project Pipeline
Randy Lack, Chief Marketing OfficerElement Markets, LLC
3555 Timmons Lane, Suite 900Houston, TX 77027
Office: 281-207-7213Fax: 281-207-7211
CONTACT INFORMATION
EMA Activities
• Market Oversight committee formed
• Outreach to EMA members and others: webinar held on July 7, featuring EMA members, IETA member and 2 Senate Ag Committee staffers
• Recording available on-line at www.environmentalmarkets.org/
• Added representatives from IETA, CERP and ABA to Committee
• Outreach to CFTC staff• Dialog on regulatory issues• Expect to be a resource for section 750 inter-agency report on carbon markets
• Submitted comments on ANPR by CFTC and SEC on Dodd-Frank bill and follow-on definitions of what constituted a SWAP [copy available]
• Allowances, RECs and offsets addressed• Not a “security”• Not, in and of themselves, a SWAP• Support for “end-user exemption”
• Oversight Committee open for further participation.
• Further information available by contacting [email protected] or at Sonnenschein exhibit area
The Issues for the Panel
• What has been the EU experience with respect to volatility and efficiency of carbon markets?
• What will role of auctioning be on rice discovery?
• How does further market oversight play a role? Will WCI criteria impede or advance CFTC rules?
• Will new US and EU provisions eliminate carbon trading or just push everything onto exchanges?
• Are the likely volumes efficiently put onto exchanges?
• How will international offsets trade in relation to domestic offsets? Will REDD offsets be at a premium, or a discount?
Conclusion
• “Markets” viewed with suspicion – by right and left• Any better alternative?• Tax grants and lobby?• Command and control?
• Many activities now underway in Congress
• Become engaged and participate