[mr.x]

Let's make Vancouver a carbon-trading centre

Miro Cernetig, Vancouver Sun
Published: Wednesday, October 24, 2007

Since he's taking us down the green road, promising to make British Columbia a world leader in fighting global warming, here's an idea. Why not make Vancouver a major centre for carbon trading?

Carbon trading is already a $30 billion a year market, as companies and governments buy and sell credits to help them meet CO2 emission limits. According to the World Bank, this emerging market has tripled in dollar terms in a year. It's going to explode in the next few years, creating just the sort of high paying financial jobs Metro Vancouver needs.

Premier Gordon Campbell has a chance to push this idea in the next week, when he flies to Lisbon for a summit of European Union leaders.

Our premier is once again following the aggressive and unconventional script of California Gov. Arnold Schwarzenegger, who revived his political fortunes by taking on global warming.

Like the Terminator, who outflanked U.S. President George W Bush by striking climate change deals with other countries, Campbell is essentially going around Prime Minister Stephen Harper on the issue with this European visit.

In Lisbon, the premier wants to ensure the new carbon trading market that B.C.'s creating, joining California and a half dozen other Canadian provinces and U.S. states, will dovetail with the EU's system.

That's needed to ensure B.C.'s carbon credits, which will start to emerge once the province announces the greenhouse emission caps for specific industries and economic sectors, can be traded seamlessly within the EU, the global leader in carbon trading.

The climate change debate is dominated by the scary prospect of melting ice caps, mass extinctions or the arguments between global warming "believers" and "deniers." But it's also creating some new business opportunities, some of them in the financial sphere.

Most people overlook the fact carbon has become a commodity. CO2 credits are already being traded like pork bellies in Chicago.

Europe is the leader having decided a key way to fight global warming is to give green companies and green-minded governments CO2 credits to sell on the open market.

The customers are polluting companies or government entities who can buy these carbon credits, thus avoiding expensive government fines and penalties for creating too much CO2.

It's essentially the selling of indulgences, though the theory is polluters will eventually stop their environmental sins to avoid the heavy cost of the fines.

CO2 trading is turning into a profitable little niche market for futures traders, too. The World Bank notes the cost to buy a carbon credit to offset a tonne of CO2 soared by more than 50 per cent last year, to about $11 per credit. Prices vary, depending on the sectors of the economy, from a few cents to about $25 per tonne of CO2 credit.

Whether it will work here remains to be seen. The government has yet to say explicitly what its CO2 caps and penalties will be in upcoming legislation. But if -- a big if -- they're anything like Europe's, a carbon market will evolve.

It won't be easy to become the market's epicentre. Behind the scenes, California and the other western states are trying to make themselves trading centres, too.

But Premier Campbell could find a niche. If he moves fast, he might succeed in making Vancouver this country's carbon-trading hub.

Don't get too excited, though.

Carbon trading isn't likely to mean enough jobs to build a skyscraper downtown. It's a niche field. But since we're likely to spend billions of dollars on this provincial government's climate change initiatives in the years ahead, why not fight for every white-collar job the battle to save the planet will create?

mcernetig@png.canwest.com


© The Vancouver Sun 2007

[raggedy13]

Would be awesome, but unlikely. I could easily see us becoming the hub of CO2 trading in Canada however. If the whole west coast block takes off, BC will be well ahead of the rest of the country. On top of that we have a significant green tech sector which will only grow from here on out.

The only way we could become the North American hub is if we were to develop a better integrated provincial system than that of the individual west coast states, fund and support the growth of green businesses in BC, and aggressively put all our green policies into practice which could all help to develop a stronger international reputation as a green city and cause international markets to gravitate towards us as the North American green hub.

It would be quite tough and require a lot of luck though methinks.

[Canadian Mind]

we are about 5 years ahead me thinks, especially with such developments in the city of the olympic villiage and GM place office tower. While our province as a whole is a tad bit behind California in some aspects, ahead of it in others, no other city can match Van-city so far as far as green tech goes. thing is, we have to speed it up and quickly. if we can start to base a sizable part of our economy off of green technology, we could cause the boom we are currently riding to last another year or two because of demand for our expertise elsewhere. This would only solidify our current shaky position as everywhere else in north America busts.

[raggedy13]

From today's Vancouver Sun...

Vancouver set to host carbon trading registry

Miro Cernetig, Vancouver Sun
Published: Monday, March 10, 2008

We've all heard that wish list of careers our parents would choose for us when we grow up so we can rake in the bucks -- doctor, lawyer, banker, stockbroker.

Well, better add a new profession to the list: carbon trader.

The fight against global warming has sparked what can only be called a Green Rush. There's a vast pool of money floating around the climate-change battle and a lot of the action is going to centre around controlling and trading a brand new commodity: carbon.

We've been slow here to tap into this multibillion-dollar industry. But in the next few days, Vancouver just may be beginning to stake out its claim as Carbon City with the formation of a carbon trading registry.

It's the bold idea of John Wiebe, president of the Vancouver-based Globe Foundation, an organization known internationally for running the world's biggest conference and trade show on sustainable business. Its registry -- which hopes to capture at least 20 per cent of the global market in voluntary carbon credits -- could make Vancouver a big player in the burgeoning carbon trading industry.

Carbon, of course, isn't like the old commodities we're used to, such as gold or oil. With carbon, it's all backwards; you make money for not producing it and get paid for trading the resulting "carbon credits" to those that produce too much.

Here's how it works in the provincial microcosm: In B.C., in the government's latest budget, carbon is valued at $25 dollars a tonne. Once B.C. introduces its carbon-cap-and-trading system, that means if you can reduce one tonne of carbon, you theoretically create a $25 carbon credit. That can then be sold to a company (or a government) anywhere that is one tonne over its carbon cap, and thus in need of a carbon credit to offset its greenhouse gas emissions and thus avoid more expensive government penalties.

Carbon trading is new. It's unpredictable. The value of that $25-a-tonne credit will fluctuate, depending on market demand and the steepness of the penalties set by government. But it's already clear that the scale of the emerging carbon-trading business is simply enormous.

Again, just consider our own tiny carbon market.

The B.C. government wants to cut our province's current carbon footprint to about 45 million tonnes annually by 2020. Since the growing economy is expected to create about 85 million tonnes of carbon dioxide by that year, it means we're looking at cutting about 40 million tonnes by 2020. Now, if you calculate a carbon credit at $25 a tonne, as the government does, that adds up to about $1 billion on today's carbon market.

Of course, a carbon credit could be worth much more a dozen years from now, or much less. Nobody really knows. If the fears of climate change don't diminish, carbon credits may be as buoyant as the price of oil and make $25 a tonne look cheap. But if people start to think global warming isn't such a big deal, carbon credits could be near worthless.

What's for sure, though, is that carbon trading is already a booming business. The World Bank has estimated the 2006 global carbon trade, still primarily focused on Europe and only beginning elsewhere, tripled in size to $30 billion US in a single year.

A few weeks ago, while he was in Vancouver for the premiers' conference, Quebec Premier Jean Charest did an end-run around all the other premiers by announcing that Montreal will be the centre for Canada's carbon trading, indicating he's been working behind the scenes to get that piece of the carbon industry. Seeing the size of the industry, he essentially wants to make Montreal Canada's carbon-trading floor, dealing with all the carbon credits on registries like the one Vancouver will soon have.

That's why I've been arguing that the B.C. government should get involved, or at least be encouraging B.C.'s private sector, to make Vancouver Carbon City. Fighting climate change doesn't just mean applying all those new green sin taxes to taxpayers and business. There are high-paying jobs to be had, too, if you act quickly enough.

The Globe foundation's decision to create its carbon credit registry is a big step in that direction. While carbon credit registries already exist, this one is big news because it represents a major conceptual leap in scale. It will be a universal registry, listing and measuring all sorts of carbon credits, from everywhere.

The plan is that anyone in the world with a verifiable carbon credit -- right now there are at least a dozen competing methods of measuring carbon credits -- would list their credits on the Vancouver-based Globe Voluntary Carbon Registry. Each would be given a serial number, enabling anyone to find it and track it and who is using it. In essence, it's one-stop shopping for the world's carbon traders.

Wiebe, the former head of the Asia Pacific Foundation, says he began thinking of the registry about eight months ago. He got serious three months ago and started building the infrastructure. It won't fill a skyscraper with jobs :( , but he's already hired a handful of people and he'll start registering carbon credits by July.

So how big could this be, a career-searching parent might ask? Well, small at the start. In the long-run, potentially enormous. [ie. eventually capable of filling a skyscraper with jobs??:)]

Wiebe envisions a customer paying between a nickel and seven cents to register each carbon credit tonne. That would mean about $50,000 to $70,000 per million tonnes of carbon registered on the Vancouver exchange.

At the moment, there are about 15- to 20-million tonnes of unregistered voluntary carbon credits that will need a home. But that number is growing exponentially.

Wiebe knows Vancouver's registry won't get all of the world's carbon credits, of course. Other cities are going to be competing to be Carbon City. But Wiebe thinks he can initially capture about 20 per cent of the market. Perhaps much more. Asked what the potential of Vancouver's carbon registry is, he offered up one adjective: "Infinite."

Welcome to the Green Rush. There are carbon credits in those hills, and in today's warming world, they're as good as gold.

mcernetig@png.canwest.com


© The Vancouver Sun 2008

[spaceprobe]

Vancouver needs to move FASTER to set up an exchange if we want to be the Canada's Carbon Centre!




CARBON FUTURES
The Canadian Press

March 15, 2008

Trading in carbon futures emissions contracts will begin May 30 on the Montreal Climate Exchange, a joint venture of the Montreal Exchange and the Chicago Climate Exchange, subject to regulatory approval.

The Montreal Climate Exchange "is moving quickly to launch the first exchange-traded carbon futures contract in Canada," Luc Bertrand, president and chief executive officer of the Montreal Exchange and chairman of the carbon trading partnership, said yesterday. When the market opens, futures contracts for carbon dioxide equivalent units will be traded, allowing polluters to offset their emissions by buying carbon credits from other firms.

Richard Sandor, chairman and founder of the Chicago Climate Exchange, said the demand for environmental derivatives is growing worldwide "and the time is right to build a critical mass of trading activity in Canada."

Trading on public carbon markets around the world grew to $30-billion (U.S.) in 2006 and was twice that last year.