Carbon Price Direction: More Affected By Systemic Issues

Recently the market is moving higher due to other parts of the energy complex. The market is not rushing ahead in carbon however, as it can be seen to do in Oil. I am not so bullish on carbon as some are, to say for example that it will get to 35 or 40 in EUAs (which admittedly a lot of dealer surveys predict).

I think rather, that the systemic and policy issues of the UNFCCC and the European Commission will be the most confusing aspect, even if the price direction of energy seems clear. The issue of whether CERs and ERUs will be valid credits in the EU ETS after 2012 is a big issue and the EC does not want to import them if no one else in the world is going to participate willingly and actively in carbon trading. This makes sense, really. But it is a bit naive to think they will sign up to it easily.

Machismo in Green Sector Jobs

I have been a huge cynic of green jobs over the years. I believed that many or most jobs were small scale and only for bearded people from Seattle.

Now that Carbon Trading has been handed over to the financial market types, a bit more machismo has been added to it. Now these environmentalists are forced to wear suits and enjoy getting fat paycheques. I love it. One of my favorite expressions is "you only become conservative once you have something to conserve (such as family, job, and er.. fat paycheque).

Many people ask me about jobs in the sector and I try to lay out some lists. One great source is the Reuters Interactive community.

List of Green Jobs. Free sign up. A MUST if you are looking for jobs.


--And there is this article about the sector:

'Green' job market bucks credit crunch gloom

By Michael Szabo

LONDON, June 9 (Reuters) - The 'Green' job market is thriving despite lay-offs across the financial and property sectors caused by the global credit crunch, environmental recruiters said on Friday.

With concerns over global warming climbing the corporate agenda, the number of climate change specific roles has near tripled in the past 12 months as business looks to cut its carbon footprint, UK-based Acre Resources said in a statement.

The environmental sector, or so-called 'green collar' jobs, including roles in renewable energy and corporate social responsibility, has seen some 20 percent growth in same period.

"Big companies ... have made very public pledges around their approach to green issues (and) despite pressures indicated by a looming recession, it is too late for most to renege on their environmental commitments," said Andrew Cartland, a managing director at Acre.

The average UK salary for a climate change professional in 2008 is 49,000 pounds ($96,910), up 14 percent from last year, while green collar wages climbed by around five percent to 34,000 pounds ($67,250), Acre said.

Top-end green jobs now earn as much as 120,000 pounds ($237,300) annually.

"While oil prices skyrocket, renewable energy solutions look to become more and more viable -- the focus on reducing energy and carbon emissions appears ever-more essential for business," Cartland added.

Oil prices hit a new record on Friday of over $139 a barrel.

"Many investors are supporting the green agenda as a 'safe' option," he said.

Despite being wounded by the credit crisis, banks are pressing ahead with investments in booming renewable energy sector.

Investment bank Morgan Stanley on Monday announced it has bought a minority stake $20 million in G24 Innovations, a UK-based solar energy company.

CLICK HERE for a list of "green collar" job vacancies

(Reporting by Michael Szabo; Editing by William Hardy)

((michael.szabo@reuters.com; +44 207 542 9242; Reuters Messaging: michael.szabo.reuters.com@reuters.net))

Abuses in Carbon Trading

From what I have heard on the WorldService new program, little bits of the larger BBC documentary, it will be quite a scathing reapproach on Carbon Trading. The Indian developers that are making millions from something that would have been done anyway.

 

My problem with that last statement is this: if someone else is going to get paid for the same project, why shouldn’t you get paid. Its like a tax loophole. Are we not supposed to také advantage of it?

 

The bigger issue , also not examined is this: If it were not brought to the market place – where, yes, some people make large pots of money, or it wouldn’t be so useful – then it would not have been addressed with the same vigor. Get real people! You cannot expect social conciousness and naive green sentiment to tackle the problem. The carrot (not the stick) is the only way forward. And what a great big carrot it is!

 

BBC documentary link

http://www.bbc.co.uk/programmes/b00bvtcx

Mark Gregory investigates the UN's scheme for reducing emissions of global warming gases. He discovers the scheme is fundamentally flawed, with billions of dollars being wasted.

 

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BBC Takes On Carbon Trading

I am interested to hear how they will portray carbon trading. Typically they will point out the abuses (okay, there are a few…) but they may trash the whole thing.

 

http://www.bbc.co.uk/programmes/b00bvtcx

Mark Gregory investigates the UN's scheme for reducing emissions of global warming gases. He discovers the scheme is fundamentally flawed, with billions of dollars being wasted.

 

The problem as I see it for the Beeb is that they do not want to come down on the side of Anti-Global Warming crowd. (ie., Bush). So they might end up saying, its the best solution but poorly executed.

 

 

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Dec 08 break up?

From a guy I know in the market....


click on the image for a better presentation..

Do you believe in chart machinations? Look at a daily ecx chart for dec 08.

First, contract trended up, then made a reverse head and shoulder which, then breaks up ...in a gap no less, and then the gap is filled in. Oh, and the 26 level was a high from 2007. But that is only if you believe in charts.

How to secure a good CDM deal at an early stage?

The CDM JI market these days is a sellers market. These Offsets (I hate the word Offset for some reason; probably because I have only thought of them as CDM/JI ) are valued anywhere from 2 to 16 Euros depending on at what stage of development they are.

An early stage project (before PIN, only at the pre-agreement level) could be captured at under 5 Euro.

But a Guaranteed CER ( the credit that is issued by a CDM project or ERU from the JI project) is above 16 and this is because the guarantor is someone that has arranged, for example, 10 million on something like delivery-versus-payment terms and can be fairly sure that he will get at least 50% of the ten million and can guarantee that half. (a crude example). Usually the bigger banking or financials that have entered the carbon space.

But to arrange a good project early, now that is the key. But how to do this? Everyone and their uncle is seeking early projects. I get calls because of my access to some of the less sophisticated markets in a variety of enterprises (emerging market, merchant wanker background). But all these aggregators are suggesting that they have something special that the other guy doesn't.

In truth, it really only takes a bit of knowledge on the type of projects that can reduce Greenhouse gases, the markets where it can be (or soon will be) applicable, and a good network in some economy in transition (well, mostly these) to be able to get a deal at an early stage. No it ain't simple, but some aspects are.

The main aspect is this: explain to the host (the company who has a location that can have GHGs reduced, captured) that they will make money and then get them to sign away their future at 2 Euros.

Alrighty, I am a huge cynic.

The interesting thing about these Offsets (I hate that word) is that the project developers are now being courted like the local pygmy chief, showing him shiny objects, marvelous gifts and even telling him he is so tall. In a few years, these guys will be on the other end of the stick I think, and it will be a buyers market.

Its a wierd market. The idea of selling a project to a buyer has so many variables. And usually they want it sold fairly quickly. Some sellers ask for surprisingly high prices. Some ask for up front payments. Buyers ask for bank guarantees (which is hard for smaller developers). Some ask for financing on the PDD work (which can be pricey).

The buyers want approved methodologies, they want bigger discounts since the projects won't deliver the amount of credits estimated. Delivery dates won't be on time, there might be some subsidies that will affect the local market, the issue of double counting has to be clarifies... on and on...

But what is good, is that .. for now at least... the buyers are all really quite nice people. It reminds me of another emerging market where all the fund managers were so nice and happy to speak to you, and then later, when the market was over serviced, they would be cruel and ask for special favours. I can see that happening.

Oh well, it really is a financial market now. Not to be confused with a green market, no way.

Nuclear Bombs Could Ruin Your Future

Here’s a pleasant news story for your sunny Tuesday morning. It was sent out by the Carbon reporter at Bloomberg.

A nuclear war involving 100.A nuclear war involving 100 Hiroshima-size bombs would open a massive hole in the earth's ozone layer, exposing life to dangerous levels of the sun's rays, a new study shows. Smoke caused by the atomic explosions would trap heat in the stratosphere and lead to the deterioration of more than 20 percent of ozone globally, according to a study published today in Proceedings of the National Academy of Sciences. The findings suggest a more severe ``nuclear winter'' resulting from a massive nuclear war than was predicted in the 1980s.

Link here: Earth's Ozone Would Be Largely Destroyed in Nuclear Conflict

But what I do not understand is

1) Wouldn’t the sudden shut-down of the world’s economies and industrial production assist in turning back the clock since only a fraction of the people would be alive? and um, “nuked back to the dark ages”

2) Who would care about getting killed by the weather when your teeth are falling out of your gums and you are fighting each other for that can of pork and beans.