I will be out Monday and Tuesday to attend the CME Group’s Global Financial Leadership Conference and a unique chance to see T. Boone Pickens speak this week. I will be back on Wednesday. Rachel Koning Beals will take over the editor’s spot while I am away.

On the move

Aimee Barnes is now serving as a policy adviser in the Office of Climate Change (OCC) Strategy Team with the UK Department of Energy and Climate Change (DECC), After leaving EcoSecurities in September, she is now developing a future financial strategy for DECC to ensure that the UK stays on target in meeting its climate and energy objectives in a fiscally constrained environment.
If anyone would like to reach Aimee, please let me know and I’ll provide you with her contact information. Good Luck Aimee!
Also, if you or someone you know is changing jobs in this industry, please send me the announcement at jimkharouf@johnlothian.com and I’ll put it into the newsletter.

Also, below is an edited version of the MF Global Weekly Carbon Outlook. This is a nice synopsis of the week’s carbon markets in the US and Europe which we plan to run regularly.

MF Global Weekly Carbon Outlook

US Markets
US VCUs are offered around $5.50, with slightly improved supply over last week, exerting a bit of pressure on price levels.  CRTS remain popular and demand continues to exceed supply.  CRTs are $7/$8 bid/offered for 2009+ vintages. 
The Deco0 CCX CFI closed at .15 cents on Friday, +.05 cents on the week.  Large volumes exchanged hands this week although prices were only slightly improved.  A total of 2,015,800 tons traded.  Specs giving up on long term positions were responsible for the sales while bottom pickers took advantage of the low price to accumulate credits they hope will ultimately be worth more than .15 cents.  No significant news appeared to be behind the large volumes.   No privately negotiated transactions were reported this week. 
    US traded companies may have to disclose their exposure to financial risks relating to climate change under new US SEC rules. The new SEC guidance comes on the heels of a series of lawsuits against emissions intensive companies demanding that they reveal the potential impact of climate policies on their operations.
     Bluesource announced its plans to aggregate agricultural carbon credits with Simplot to help farmers earn income from future carbon markets.
    JP Morgan appears to have completed its purchase of Ecosecurities after taking over 80% of the stock. This would be the bank’s second carbon acquisition following the successful integration of Climate Care.
    US industrial industries will be awarded 16% fewer allowances under the Senate bill than they would have received under the House bill, according to lobbyists and Point Carbon analysts.
    The US airline lobby (ATA) has called for the US government to reject the international air passenger adaption levy, an international proposal to impose a fee on international air passengers.  The proposal is designed to raise funds to help developing countries deal with climate change.
    APX Inc. announced that is has launched the Michigan Renewable Energy Certification System (MIRECS), which will issue, track and retire Michigan RECs (RECs), Advanced Cleaner Energy Credits(ACECs), Michigan Incentive Renewable Energy Credits (IRECs) and Energy Optimization Credits (EOCs), under the states Clean, Renewable and Efficient Energy Act.
Senate Environment and Public Works Committee Chair, Barbara Boxer, said late on Thursday that she wants to hold drafting sessions as early as Tuesday on the climate change bill pending before her committee, however the meetings could be delayed by Republican stalling tactics. Ranking Republicans (on the panel) have indicated they may lean towards a boycott of next week’s work sessions, citing a need for further analysis of the legislation from the EPA.  Republicans have voiced concern that the bill favors certain regions of the country over others and they deny claims the bill will create millions of alternative energy jobs.  EPA head Lisa Jackson told the committee on Thursday that her agency relied heavily on its economic analysis of the House passed versions of the bill in writing its analysis of the Boxer-Kerry Senate bill. Jackson said they were similar enough not to require a repeat of the full analysis the Republicans are requesting and which would take a number of weeks to complete.           
Canadian emitters will not be able to meet their emissions reduction targets without the ability to use international offsets. Speaking at an industry event in DC this week, regulatory affairs manager of Royal Dutch Shell, Gerry Ertel said “Canada does not have enough domestic offsets making international offsets in a compliance program necessary”. Last June the Canadian government released their offsets guidelines saying only offsets from Canadian projects started after Jan 2006 could be used.  Canadian regulations are currently stalled however as the government has been waiting on the US to pass legislation before they move their own forward. 
The fledgling recovery in the Voluntary markets has continued with increased levels of deal activity. Prices have largely remained unchanged from the previous week, with exotic VCUs at $4/5.50 bid/offered at the upper end of the scale while pure VCUs trundle along at low $2.00 levels. Gold Standard VER prices are unchanged with spot credits at 7euros and forwards 5/6euros bid/offered. Activity is increasing slowly from a quiet base. There is bid interest for small volumes of African credits paying 3euros premiums, however supply is tight.
Tougher EU emissions standards for light commercial vehicles of 175g/km are to be phased in from 2014 to 2016. Legislation aims for a long term commitment of 135g/km by 2020 with limits set by weight of vehicle. Manufactures that miss targets will face rising penalty charges. The proposal is designed to align the 27 bloc’s CO2 emission vehicle performance standards. 

EU leaders on Friday reached agreement on an international climate adaptation fund for developing nations. The bloc agreed that 100 billion euros would be required by developing nations per year by 2020 and that up to half of this would be required from rich country governments. Allocations from individual EU member states have yet to be agreed and are proving contentious. Funding remains a core issue in determing wider agreement at the Copenhagen climate talks.

Jim Kharouf

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