Carbon Market Analysis – August 2010

This report includes carbon market developments globally. There are four articles covered in detail: 1. Regional Greenhouse Gas Initiative – The Potential Solution for the US Carbon Market Rapid growth in economic activity has had a negative impact on the fragile ecosystem. Carbon emissions have impacted the environment and global warming is one of the key manifestations of this.. In order to prevent global warming by controlling carbon emissions, politicians across the globe are implementing various measures. The Regional Greenhouse Gas Initiative (RGGI) is one of the initiatives pioneered by the Northeastern and Mid-Atlantic states in the US. This initiative has yielded favorable results in terms of reducing the carbon emissions in the ratified states. The success of RGGI has also triggered the debate to replicate a similar scheme at the federal level. 2. New Zealand Climate Change Response Amendment of 2009 The New Zealand Emissions Trading Scheme (NZ ETS) was legislated in September 2008 under the Climate Change Response Act (2002). This law, amended in November 2009, became the first mandatory emissions trading scheme outside Europe. The liquidity in the New Zealand emissions market increased in June with the trading of around 1.5 million NZUs as companies responded to the inclusion of three new sectors in the trading scheme. Due to this, the supply is expected to increase in the second half of 2010. The fixed price of the emissions unit and limited supply initially would not create much market movement at first within the NZ ETS. It is expected that participants can prioritize buying the NZUs at a fixed price of NZ$25 from the government rather than buying spot permits presently being traded at around NZ$18– NZ$18.50. 3. Kyoto Carbon Market Balance: Demand and Supply Scenario, 2008–2012 The economic downturn in 2008 caused a decline in investments in the carbon sector. In addition, the two international climate change talks in Copenhagen and Bonn were not able to produce concrete results favoring the global carbon market. Against this backdrop, the players in this market have become much more conservative. Also, the recent delay of regional carbon bills across the globe has impacted the expected supplies of emission units in the trading market. Delays in the US’s and Japan’s carbon bills as well as Australia’s Carbon Pollution Reduction Scheme (CPRS) have resulted in uncertain market conditions, thereby impacting the decisions of Parties involved in the Kyoto Protocol. In this context, the demand-supply scenario of the Kyoto market suggests that the Kyoto projects pipeline could continue to shrink as investors are reluctant to make long-term investments due to the uncertain post-2012 scenario. 4. Moving Towards Zero – Sony’s Perspective Sony Corporation announced its “Road to Zero” global environmental plan. The plan includes a long-term goal of achieving a zero environmental footprint by 2050. The mid-targets will be implemented globally across the Sony Group beginning in the fiscal year 2011 (April 2011), and will extend through to the end of the fiscal year 2015 (March 2016), at which time new targets for the following five years will be set.

Scope

Its scope includes –

Featured Articles: Analytical articles related to the impact of major carbon markets on the future growth of the emissions trading market.

1. Regional Greenhouse Gas Initiative – The Potential Solution for the US Carbon Market

· Overview – Regional Greenhouse Gas Initiative

· The US Carbon Emissions

· RGGI – Two Pronged Approach

2. New Zealand Climate Change Response Amendment of 2009

· NZ ETS Scheme to Regulate Emissions across all Sectors of the Economy

· Emissions Trading Parameters Under the Scheme

· NZUs Allocation to Firms and Transition Assistance Package

· Cost Control Measures for NZ ETS Participants

· Forestry Sector Included in NZ ETS

· Effect of NZ ETS on New Zealand’s Carbon Market·

3. Kyoto Carbon Market Balance: Demand and Supply Scenario, 2008–2012

· Fall in Potential Demand in the Government Sector

· Fall in the Kyoto Market Demand in the Private Sector

· Supply Dynamics of the Kyoto Assets

· Demand—Supply Scenario of the Kyoto Market, Until 2012

4. Moving Towards Zero – Sony’s Perspective

· Road to Zero – Midterm Targets, 2015

· Forerunners of the Concept

· Importance of Sony’s Road to Zero Initiative

Reasons to buy

The “Carbon Market Analysis” provides in depth study of the major emissions reduction market developments across the globe. It gives market updates for the global carbon market which can help the individual/company frame their business strategies while developing sustainability initiatives.

Analyze the impact of changing carbon market on the company business

1. Regional Greenhouse Gas Initiative – The Potential Solution for the US Carbon Market – Provides insightful data on the developments in the emissions trading market of the United States

2. New Zealand Climate Change Response Amendment of 2009 – To identify the upcoming regional emissions trading market schemes and its impact on the global carbon market

3. Kyoto Carbon Market Balance: Demand and Supply Scenario, 2008–2012 – To identify the demand-supply scenario of the Kyoto Market and its impact on the international talks under UNFCCC

4. Moving Towards Zero – Sony’s Perspective – Provides major long-term initiatives taken by Sony for controlling their emissions.

Develop strategy based on the upcoming trends in the global carbon market

Identify target markets by looking at the trend of emissions trading across the globe

Understand the impact of Kyoto Demand – Supply scenario on the international carbon talks

Table of Contents

1 Table of Contents

1.1 List of Tables

1.2 List of Figures

2 Regional Greenhouse Gas Initiative – The Potential Solution for the US Carbon Market

2.1 Regional Greenhouse Gas Initiative

2.2 US Carbon Emissions

2.3 Two Pronged Approach

2.4 Conclusion

3 New Zealand Climate Change Response Amendment of 2009

3.1 NZ ETS Scheme to Regulate Emissions across all Sectors of the Economy

3.2 Emissions Trading Under the Scheme

3.3 NZUs Allocation to Firms and Transition Assistance Package

3.4 Cost Control Measures for NZ ETS Participants

3.5 Forestry Sector Included in NZ ETS

3.6 Effect of NZ ETS on New Zealand’s Carbon Market

4 Kyoto Carbon Market Balance: Demand and Supply Scenario, 2008–2012

4.1 Potential Demand has fallen in the Government Sector

4.2 Private Sector Demand is also affected

4.3 Supply Dynamics of the Kyoto Assets: CERs and ERUs Decline While AAUs Rise

4.4 Demand—Supply Scenario of the Kyoto Market, Until 2012

5 Moving Towards Zero – Sony’s Perspective

5.1 Summary

5.2 Road to Zero – Midterm Targets, 2015

5.3 Forerunners of the Concept

6 Appendix

6.1 Methodology

6.2 Contact Us

6.3 Disclaimer

List of Tables

Table 1: Carbon Emissions, US, 2005–2009

Table 2: Price Vs Quantity, RGGI, Auction 1- 8

Table 3: Unit Surrender Obligation Start Dates

Table 4: Kyoto Demand—Supply Market Scenario, Until 2012

Table 5: Projections For EU ETS Until 2020

Table 6: CERs Supply: Million CERs Issued

Table 7: Potential Demand, Contracted Supply and Residual Demand, Until 2012

List of Figures

Figure 1: Carbon Emissions in RGGI States, 2000–2009, CO2 Million Tons

Figure 2: Percentage Change in Carbon Emissions of RGGI States Vs the US (Includes RGGI States) , 2005–2009, CO2 Million Tons

Figure 3: Price Vs Quantity, RGGI, Auction 1- 8

Figure 4: Auction Proceeds, RGGI, Auction 1- 8, $M

Figure 5: Global CERs Supply: Million CERs Issued, 2010

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