carbon credits

How big do you think this market is?

With the assets MPO have in place around the world and are still gathering, how much do you think the future for MPO in trading in Carbon Credits is going to be?

Here are a few figures.. Out of them can the Math’s guy’s crunch some numbers for us please and give us an idea..

I know this is all theory at the moment.. but the movement is there.. the structures are in place.. this is going to happen.. that is a given..

Another Question is.. How much do the New BHP guys know about this already.. You can bet your bottom dollar they knew the answer to this..

It is kind of like getting paid twice for the same product don’t you think...


Unified Energy's carbon trading division, called the Energy Carbon Fund, has a waiting line of interested buyers. In the past year, company officials say they have been approached by foreign commodity traders, hedge funds, car makers and large banks including American financial heavyweights, like Morgan Stanley and Merrill Lynch. futures trading for contracts maturing next year in Europe,

prices are about 15 euros per carbon credit. One carbon credit offsets one ton of carbon emissions.

For now, trading in the United States is voluntary: 225 companies that have made promises to reduce greenhouse gases by 6 percent by 2010 are trading carbon credits on the Chicago Climate Exchange.

Prices for the credits started around 90 cents per ton of carbon when the exchange was established in 2002; they now trade around $4.


Once emissions rules are in place, he said, it may make more economic sense to earn carbon credits by planting a forest or capturing methane from agricultural holding ponds than to cut emissions by switching a carbon-spewing coal plant to natural gas. Conversely, carbon credits can add to the economic viability of converting coal to gas, efficient turbine components and other clean technologies with high upfront costs.
For utilities and manufacturers, the ability to trade credits could take some of the sting out of regulation. ''There is more certainty that we will be living in a carbon-constrained world through some sort of legislative activity, and that helps carbon take on a value,'' said Sara S. Kendall, vice president for environment, health and safety for Weyerhaeuser, the forest products company.

That value, in turn, makes it easier to persuade shareholders and directors that it makes sense to invest in research on ways to cut emissions even beyond a mandatory level.

''A market-based trading approach fosters innovation,'' said Edwin L. Mongan III, director of energy and environment at DuPont, one of the exchange's 14 founders. ''It gives an incentive to use your best technology to get well below the mandatory targets.''
But while utilities and manufacturers worry about abating the costs of new rules, financial firms are already figuring out the best ways to profit from them.
Natsource, a green-oriented investment firm, has begun hiring environmental economists and regulatory experts to help ''figure out what the regulatory regime will look like, and what sort of abatement projects will make sense from an investment standpoint,'' said Jack D. Cogen, its chief executive.

GE Energy Financial Services is already negotiating to invest in projects that keep methane from escaping from landfills and coal mines, and it will take ownership of many of the resulting carbon credits. There are only a few deals in the pipeline now, said Kevin Walsh, the unit's managing director, ''but we want to get in, learn and have a few deals under our belt when regulation comes to the U.S.''

Insurance companies and consulting firms see the potential for profit, too. Marsh, which is in both those businesses, is helping clients assess the risks and potential rewards of carbon abatement projects. Marsh, a unit of Marsh & McLennan, is also creating new insurance products that mitigate the risk of a project going awry -- say, a forest that burns down, or a carbon leak at a coal-burning plant.

''The U.S. market for carbon credits will be huge,'' said Gary S. Guzy, a senior vice president at Marsh, ''and we want to be leading the risk management and services side of it.''

For many companies, though, the motivation has less to do with the potential for profit. American Electric Power, one of the climate exchange's 14 founders, joined partly to influence national policy and partly to ''get carbon prices embedded in our own people's thought processes,'' said Bruce H. Braine, vice president of strategic policy analysis.

Once emissions rules are in place, he said, it may make more economic sense to earn carbon credits by planting a forest or capturing methane from agricultural holding ponds than to cut emissions by switching a carbon-spewing coal plant to natural gas. Conversely, carbon credits can add to the economic viability of converting coal to gas, efficient turbine components and other clean technologies with high upfront costs.