ECX Associate Membership

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Building Environmental Markets Carbon Trading
vs. Offsetting Robert Rabinowitz,
PhDDirector, Climate Exchange (Europe) Ltd
International Conference on Design And Public
Policy Markets For Congestion And Carbon
Trading 11 12 JANUARY, 2007University of Essex
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Carbon Risk Management Strategy Options
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The Seven Stages of Capital Market Development
1. Structural change - demand for capital 2.
Uniform commodity/security standards 3. Legal
instrument providing evidence of ownership 4.
Informal spot and forward markets 5. Emergence
of exchanges 6. Organized futures and options
markets 7. Proliferation of OTC markets,
deconstruction
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Conditions for Emissions Trading

• Multiple sources, common problem
• Able to define and monitor reductions
• Differences in mitigation costs across sources
  allow cost savings
• through trading
• Those facing low cost to cut emissions make
  extra
• cuts and sell credits to those facing high
  cost
• Enforce while maintaining other protections

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CCX Membership

• Chemicals
• Bayer Corporation
• Dow Corning
• DuPont
• Rhodia Energy Brasil Ltd
• Education
• Hadlow College
• Tufts University
• University of Iowa
• University of Minnesota
• University of Oklahoma
• Electric Power Generation
• American Electric Power
• Central Vermont Public Service

Environmental Services Lancaster County Solid
Waste Management Authority Waste Management,
Inc. Wasatch Integrated Waste Management
District Forest Products Abititbi-Consolidated A
racruz Celulose S.A. Cenibra Nipo Brasiliera
S.A. International Paper Klabin S.A. MeadWestvaco
Corp. Stora Enso North America Temple-Inland,
Inc. Governments City of Aspen City of
Berkeley City of Boulder City of Chicago City of
Oakland City of Portland King County, Washington
State of Illinois State of New Mexico
Information Technology Freescale
Semiconductor IBM Motorola, Inc. Square
D/Schneider Electric N.A. STMicroelectronics Indu
strial Ford Motor Company Interface,
Inc. Roanoke Electric Steel Corp. Rolls-Royce Oth
er Aspen Skiing Company Baxter International,
Inc. Knoll, Inc. New Belgium Brewing
Company Ozinga Bros., Inc. Premium Standard
Farms Safeway, Inc.
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CCX Offsets

• Methane destruction
• Initiating and operating landfill methane
  collection and destruction in the United States,
  Canada, Mexico, Brazil and other countries as
  applicable
• Initiating methane collection and destruction
  systems at livestock operations 
• Agricultural practices
• Committing land to continuous no-till,
  strip-till, or ridge-till cropping in the central
  United States and other regions or countries as
  applicable
• Initiating grass cover planting in specified
  states, counties and parishes in the United
  States 
• Forestry practices
• Initiating forestation and forest enrichment
  projects
• Initiating combined forestation and forest
  conservation projects in Brazil and Mexico 
• Other GHG emission mitigation in Brazil
• Fuel switching
• Renewable energy generation from solar, wind,
  small hydroelectric and biomass systems 
• Renewable energy
• Displacement of CO2 emissions by eligible
  renewable energy facilities  
• Clean Development Mechanism Eligible Projects
• Acceptance of Certified Emissions Reductions
  (CERs) from the Clean Development Mechanism (CDM)

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The Clean Development Mechanism
CDM investment from 2005-2006 gt 5 billion (World
Bank/IETA)
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The Clean Development Mechanism
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The Challenge of Communicating Climate Change
Scale and Visibility Climate change global,
decades, not local or immediate Climate change
not tangible or visible like deforestation or oil
spills Complexity Climate change or global
warming, heat-waves or Day After Tomorrow CERs,
EUAs, VERs, ERUs, RMUs, AAUs The Ability to Have
a Positive Impact The best we can do is to
reduce, but not halt, climate change
Long-term Global Invisible Nebulous
Immediate Personal Tangible Practical
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www.puretrust.org.uk