iisd kyoto mechanisms seminar winnipeg, mb march 14, 2003
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IISD Kyoto Mechanisms Seminar Winnipeg, MB March 14, 2003. Why Emissions Trading?. Emissions Trading (“ET”) is a market-based approach to addressing climate change. ET provides a price signal. ET allows for efficient allocation of resources. ET is more dynamic than a regulated approach. - PowerPoint PPT PresentationTRANSCRIPT
IISD Kyoto Mechanisms Seminar
Winnipeg, MB
March 14, 2003
Why Emissions Trading?
• Emissions Trading (“ET”) is a market-based approach to addressing climate change.
• ET provides a price signal.
• ET allows for efficient allocation of resources.
• ET is more dynamic than a regulated approach.
CCE Organizational Structure
The Canadian Climate Exchange• Builds on the expertise of Canada’s only commodity
exchange.
• WCE has extensive experience in:
• Creating, implementing, and facilitating trading in over twenty different cash and derivatives contracts.
• Clearing both futures and physical products.
• Operating as an SRO in a regulated environment.
• Annual WCE trading volume exceeds four million contract sides.
The Canadian Climate Exchange, cont’d…
• Staff of WCE have been working on emissions trading issues for over three years.
• CCE officially launched as a separate entity on February 5, 2003.
• Presently consulting with industry and government.
• Assessing the potential for a Canadian emissions marketplace.
Why trade on an exchange?
• Open, competitive, and fair marketplace.
• Low-cost trading and counterparty risk management (clearing).
• A proven model that facilitates trade for a wide variety of participants.
• Public price discovery.
Why CCE?• Proven track record based on WCE.
• Extensive experience working with industry to create products and markets.
• Skills and understanding on how to keep contracts relevant and functional, in the face of changing requirements and regulations.
• Expertise in operating an SRO model, and dealing with regulators on a provincial, federal, and international level.
Derivatives versus Cash Market
• CCE believes that the logical first step in emissions trading is a cash market, not a derivatives market.
• This is the method used by the majority of existing emissions trading schemes.
• Clearing of cash products can take significantly different forms than clearing of derivatives products.
CCE’s vision• Market-based, low-cost solution to the implementation
of Kyoto Protocol in Canada.
• Products and services that meet industry needs.
• Continual review to ensure ongoing suitability.
• SRO (self-regulating organization) model for the marketplace.
• Ability to expand into additional markets (eg - NOx and SO2)
• Standardization and fungibility with carbon markets in other jurisdictions.
Contact InformationCanadian Climate Exchange
www.canadianclimateexchange.com
Winnipeg Commodity Exchangewww.wce.ca
Bruce Love, Managing Director, CCE [email protected](204) 925-5003
Steve Teller, Analyst, CCE [email protected](204) 925-5019