Carbon trading and strategy
Posted by Administrator on 12/16/2008
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A one day training example
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Climate change actually first captured the public’s imagination in 2007, as a major report prepared by the Intergovernmental Panel on Climate Change (IPCC), a Nobel Peace Prize and the launch in Bali of the negotiation process for a post-2012 climate change regime, contributed to making climate change a key part of the global economic and environmental debate. January 1, 2008 also marked the formal start of the compliance period of the Kyoto Protocol and of Phase II of the European Union Emission Trading Scheme (EU ETS).

The carbon market has the potential to become the greatest but also most complex commodity market the world has seen. Last year alone, permits worth more than USD 60 billion were traded on the world’s carbon markets. But future trading volumes will probably dwarf these.

Carbon trading schemes originate from the Kyoto protocol on climate change agreed under the auspices of the United Nations in 1997. Governments adhering to Kyoto accept limits on the CO2 their countries can emit. To meet their pledges, they put caps on the carbon outputs of domestic companies, which have to buy annual permits to exceed them.

Several emissions trading schemes are up and running around the world. Europe’s Emissions Trading Scheme, founded in 2005, is the biggest. But others are following in Australia, the US and even China. Permits are bought from governments or from carbon traders. The sector that already employs thousands of people seems to offer very good future perspectives.

In this course Kasper Walet one of the global leading experts will take you through the challenges and opportunities for you and your company of these very interesting markets.

Who must attend

Key decision makers within financial and energy companies who are:

• Relatively new to the carbon trading concept
• Building a carbon strategy
• Looking into the opportunities of carbon trading and/or finance
• Willing to gain market share in this fast developing market
• Want to set up or extend a carbon desk

As well as industrial companies with potential CDM projects, regulators, consultants and lawyers.

Key Takeaways

• Gain insider knowledge from an industry expert.
• Shorten your learning curve by benefiting from the lessons learned in the already more advanced European carbon markets.
• Don’t allow the already advanced players in the carbon market to benefit from your current inexperience in this arena.
• Learn how to identify and benefit from the inefficiencies apparent in the carbon markets around the globe
• In this highly interactive workshop many practical real life case studies will be used to bring the theory alive.
• After the workshop you will be able to design your own business case, including a practical action-plan and kick start your entrance into this challenging market.

Tailor made training

This is just an example of a possible training. However, it will be my pleasure to discuss with you your requirements. This will allow us to make a tailor made training course that will exactly meet your demand.

The Program

Introduction

• Carbon trading is primarily policy driven. What are the latest developments in policy?
• What is going to happen after 2012 when the Kyoto Protocol ends? Are the signals long enough to be relevant to investment cycles?
• Compatibility of current international developments with the EU and Kyoto infrastructure
• Kyoto Flexibility Instruments
• Carbon: the missing link between different energy commodity markets - oil, gas, coal and power

State of the carbon markets

• Role of mandatory and voluntary markets
• Role of exchanges in the Carbon market: Europe, US and Asia
• Transparency of the carbon Markets: what are most abundant and well-managed sources of information?
• Managing carbon risk: what are the risks in the carbon market
• Products
  • Spot
  • Forwards and futures
• Other derivatives
• Price development

Legal Aspects

• Allocation of CO2 allowances
• Auctioning
• Covered sectors, companies
• Internal market
• Cross border aspects
• Master or standard agreements (IETA, EFET, ISDA)
• Linkage with ET systems
• Emissions
• Registries and transaction logs

EU ETS

• EU ETS, the major carbon market
• Is EU ETS Phase II Short?
• Assessment of EU ETS Phase II
• The new face of EU ETS in Phase II
• The road ahead to Phase II
• Analyzing market demand for the EU ETS in Phase II and Phase III together

Project Based Markets

• Primary versus secondary markets
• EU linking directive allows CERs, credits from CDM projects to be used in the EU ETS. How long will it remain that way?
• Who are the buyers?
  • How much more demand is likely?
• Who are the sellers?
• China dominates primary CER transactions
  • India, Brazil and Africa
  • Russia and Ukraine dominate potential JI supply
• Prices and contract terms
• Price differentiation
  • Country of Origin
  • CERs and ERUs
  • Issued CERs
  • Fixed forward pricing contracts
  • No guarantees in the primary market

The Carbon Market in Practice

• Participants and roles: overview of different roles and actors on the carbon market
• How did emissions trading work in 2008? What is the outlook into the future with regards to prices and volumes;
• Potential roles for companies on the carbon market
• Emissions trading strategies
  • On-site, off-site, multi-site
  • Carbon risk strategies, spot sales and futures purchase
  • Pooling

Develop Carbon Strategy

• How to prepare your organisation
  • Internal reductions
  • Buy and sell allowances
  • Make JI/ CDM investments
• Abatement curves
  • Decide what reduction opportunities exist within your company
  • What are abatement curves
• Analysis
  • Compare internal reduction costs to current allowance market price
  • Generate scenarios to analyse impact of futures emission price development

Last changed: 01/14/2009 at 10:04 am

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