The New Carbon Cycle

Global Food Transportation May Be Pulled Into EU Emissions Trading System

In a New York Times article entitled The Environmenta Costs of Shipping Groceries Around the World, the issue of the greenhouse gas emissions from shipping fruit, vegetables, fish, and other food products is discussed.  The article describes the move by the European Union to add air transportation to the EU Emissions Trading System (ETS) would put a cost on air transportation of food and manufactured items.  The EU is reviewing the addition of shipping emissions to the ETS as well.  Many of the countries that produce these food items complain that the charging of a carbon tariff or requiring the purchase of offsets or allowances for these food items is a form of trade protectionism.  As the debate over the transportation in this article, and production (including use of electricity from coal-fired power plants) continues, countries will find themselves debating over the emissions and costs to compensate for the potential impact on climate change and global warming. 

Fortis Predicts $400 Billion Carbon Credit Market Between 2012 and 2015

Fortis NV, a Belgian-Dutch bank/financial firm and significant player in the international carbon market, predicts the EU carbon market to be $100 billion in 2009, and the international market to rise to $400 billion by 2012 to 2015, depending on the timing of the entry of the United States into the carbon market.  The US would join the market through domestic legislation and entry into an international treaty to follow the Kyto Protocol.

Guest Column on EnergyLaw360

I recently published a guest column on EnergyLaw360 entitled Laws Set Stage for Carbon Trading Opportunities.  The article discusses the new federal greenhouse gas emissions reporting law that was enacted and how EPA must publish final rules by September 2009.  These rules will serve as the foundation for coming climate change legislation that will create a cap-and-trade system for regulating greenhouse gas emissions, and create significant opportunities in developing greenhouse gas emission reductions that can be monetized in the form of carbon credits.

Could Carbon Trading Become the Largest Global Commodity Market?

Many carbon traders are convinced that carbon trading could become the world's largest commodity market.  Is this possible?  While this may be an exaggeration, it is clear that if the United States enters the market with new federal legilsation and agreeing to enter the post-Kyoto Protocol treaty on climate change, carbon trading could become a vast market.

As story last year in the International Herald Tribune called Carbon Trading: Where Greed is Green, two leading carbon traders made incredible predictions.  Managing emissions is one of the fastest-growing segments in financial services, and companies are scrambling for talent. Their goal: a slice of a market now worth about $30 billion, but which could grow to $1 trillion within a decade.

"Carbon will be the world's biggest commodity market, and it could become the world's biggest market overall," said Louis Redshaw, the head of environmental markets at Barclays Capital.

Carbon could become "one of the fasting-growing markets ever, with volumes comparable to credit derivatives inside of a decade," said Chris Leeds, head of emissions trading at Merrill Lynch in London.

Time will tell, but these predictions suggest a huge market in the next five years as the United States moves into the market.

Carbon Credit Company AgCert Delists from London Stock Exchange in Attempt to Save Company

AgCert International, a company that had amassed numerous agricultural projects to generate carbon credits under the Kyoto Protocol, announced that the examiner appointed in its insolvency proceeding in Ireland has initiated the process of preparing proposals that may see the Company resolve its obligations and maintain an ongoing business.  In the absence of these proposals being approved by all parties and being successfully implemented, the company announced that there is no reasonable prospect that the company will be able to continue to operate a viable business.  The examiner has concluded that the continued listing of AgCert on the London Stock Exchange could jeopardize the successful completion of the proposals, and the company has therefore requested that the listing be canceled.