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IISD Kyoto Mechanisms Seminar Winnipeg, MB March 14, 2003

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.

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IISD Kyoto Mechanisms Seminar Winnipeg, MB March 14, 2003

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  1. IISD Kyoto Mechanisms Seminar Winnipeg, MB March 14, 2003

  2. 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.

  3. CCE Organizational Structure

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. Contact Information • Canadian Climate Exchange www.canadianclimateexchange.com • Winnipeg Commodity Exchange www.wce.ca • Bruce Love, Managing Director, CCE Inc. blove@canadianclimateexchange.com (204) 925-5003 • Steve Teller, Analyst, CCE Inc. steller@canadianclimateexchange.com (204) 925-5019

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