Post 2012 Carbon Market Report Sample

Post 2012: Week of 6 August – 12 August 2011 (Prepared by Climate Connect Research Desk)

About Climate Connect: Based in London and New Delhi, Climate Connect is a news and information company specializing in new age environmental markets. Our areas of focus include Post 2012 carbon markets, renewable energy certificates, energy efficiency markets and forestry. To know how you can benefit by using our latest cutting edge news and analysis products, please contact us at: India: +91 11 4505 6713 UK: +44 207 193 8996 Web: http://www.climate-connect.com Email: [email protected]

In this report:

Page

I. Significant Developments 2

II. Prices of Post 2012 Instruments 4

III. Fact of the Week 4

IV. Market Structure 5

V Policy Focus This Week 5

VI. Expert View 5

VII. Market Intelligence 5

VIII. Upcoming Events 6

Post 2012 Global Snapshot

Disclaimer: Climate Connect Ltd has taken due care and caution in compilation and reporting of data as has been obtained from various sources including which it considers reliable and first hand. However, Climate Connect Ltd does not guarantee the accuracy, adequacy or completeness of any information and it not responsible for errors or omissions or for the results obtained from the use of such information and especially states that i t has no financial liability whatsoever to the users of this report. This research and information does not constitute recommendation or advice for trading or investment purposes and therefore Climate Connect Ltd will not be liable for any loss accrued as a result of a trading/investment activity that is undertaken on the basis of information contained in this report. Climate Connect Ltd does not consider itself to undertake Regulated Activities as defined in Section 22 of the Financial Services and Markets Act 2000 and it is not registered with the Financial Services Authority of the UK.

India: PAT Scheme to be notified by 30 September, 2011

South Africa: decision over its stance for COP 17, in October 2011

Climate Connect- Post 2012 Weekly Report

UK: Chamber of Shipping proposes global cap-and-trade scheme for shipping industry

China: emissions to be reduced by 48 million tons CO2 through energy efficient lighting

Australia: carbon pricing scheme have potential to double the emission cut

US: first fuel efficiency and GHG emission standards for heavy vehicles announced

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Post 2012: week of 6 August – 12 August 2011 2

© Climate Connect Limited [email protected] London | New Delhi

Consulting major Arup to calculate carbon

footprint of COP 17, Durban

Engineering and management consultancy Arup has been

contracted by the eThekwini municipality to assist in

calculating the carbon footprint of the COP 17. Next year, a

disclosure report will be released to determine the actual

carbon footprint of the event and accordingly green initiatives

and strategies will be suggested to reduce and offset the

potential footprint. An initial estimate that was calculated by

eThekwini Municipality’s Energy Office, indicates events likely

footprint of approximately 22,085 t CO2e.

US announces fuel efficiency and GHG emission

standards for heavy vehicles

USA announced the first fuel-efficiency and GHG standards for

long-haul rigs, work trucks and other heavy-duty vehicles,

which will save approximately $50 billion for the industry in

fuel costs over the life of the program. The regulations call for

reductions on fuel consumption and GHG emissions of 9% to

23% by 2018, depending on the type of vehicle. Under this,

the trucks and buses built in 2014 through 2018 will reduce oil

consumption by a projected 530 million barrels and GHG

pollution by approximately 270 million metric tons.

I. Significant Developments

South Africa to decide over its stance for COP 17, in

October

South Africa’s negotiating position for the COP 17 will be

submitted for cabinet approval in October. Being the host of

upcoming climate talks in Durban, South Africa will have a crucial

role to play for taking the negotiations in the right direction and

producing some norms to follow Kyoto protocol. To ensure that

the conference is a success, South Africa together with Mexico, is

arranging a Leaders Dialogue on climate change, to be held on

the margins of the 66th session of the UN General Assembly,

which will open at the UN headquarters, on 13 September 2011.

Australia's carbon pricing scheme have potential to double the emission cut

In a new analysis, the research group ClimateWorks has found

that Australian government's carbon price plans could deliver

more than double the cut in domestic GHG emissions that

Treasury has predicted. After the detailed analysis of the

government's carbon pricing package the report predicted it

could cut 133 million tons of carbon emissions by 2020

compared with the Treasury forecast of 58 million tons. Australia

has to reduce its emissions by 159 million tons by 2020 if it wants

to meet the 5% reduction targets on 2000 levels. 133 million ton

reduction equate to 83% of the total emissions reductions

required to achieve the target of 5% and thus only 17% of the

national effort would have to be achieved by buying emissions

reduction permits from overseas which is far less than what

Treasury suggested.



China to reduce emissions by 48 million tons CO2

through energy efficient lighting

It is estimated that the replacement of incandescent

lamps with energy-saving lamps would result in annual

saving of 48 billion KWh, equivalent to reducing carbon

dioxide emissions of 48 million tons. NDRC noted that

the replacement will help China in meeting its five year

plan target reducing the energy intensity of its GDP and

reduce emissions of green house gases.

IFC to buy 1.5 million Post-2012 CERs from Indian biomass power developer The International Finance Corporation has announced that it

will invest $15 million in an India-based biomass power

generation company Shalivahana Green Energy Limited, to

expand its generation capacity to 200 MW. Significantly, IFC

will also sign an agreement with the company to purchase 1.5

million CERs from the power projects developed by the

company during 2013 and 2020. IFC will purchase these CERs

through its Post-2012 Carbon Facility.

Indian PAT Scheme likely to be notified by 30

September, 2011

The notification for implementation of the Perform Achieve

and Trade (PAT) Scheme will come out latest by 30

September 2011. The draft notification is currently with the

Ministry of Law and Justice and has already been cleared by

the Ministry of Power. As of now PAT Scheme covers 477

Designated Consumers (DCs) and aims at saving 6.6 MTOE by

the end of first PAT cycle. He also stated that the floor price

for ESCerts, which would be valid for 2 PAT cycles, will be

near to 1/3 of market value of equivalent oil.

UK Chamber of Shipping proposes global cap-and-

trade scheme for shipping industry

The UK Chamber of Shipping has said that a global cap-and-trade

scheme covering the shipping industry's carbon emissions would

be more effective and beneficial compared to an inclusion of the

sector into the EU ETS. A recently released report by the

Chamber of Shipping suggests that "the market based approach

of cap-and-trade is attractive in allowing choice and flexibility

within a global, goal-based system. IMO had recently announced

the first-ever mandatory energy efficiency standards. According

to experts, this would save $5 billion per year and offset 22

million tons of carbon emissions annually by 2020.

Intercontinental Exchange to launch 27 US

emissions, RE certificate contracts

Intercontinental Exchange to launch 27 US

emissions, RE certificate contracts

The Intercontinental Exchange has announced that it will launch

27 US emission and renewable energy certificate contracts for

trading on 29 August 2011. These include contracts for

greenhouse gas emissions, renewable energy certificates, sulfur,

sulfur dioxide, NOx and ozone emissions. In addition, the

exchange will also launch options contracts for 20 emission

contracts out of these 27 on 19 September 2011.

Emirates to lose $1 billion under EU ETS Aviation,

takes up green initiatives

Emirates, one of the leading airline in the world has estimated

that it will lose up to $1 billion during the first eight to ten years

of the European Union Carbon Emission Scheme for aviation.

Around 24% of Emirate's global operations are in Europe.

Emirates have also taken up measures to improve fuel efficiency

and in order to minimize their carbon emission they initiated the

Indian Ocean Strategic Partnership to Reduce Emissions

(INSPIRE). Emirate's fuel efficiency was 4.12 litres per 100

passenger-kilometres (PK), 25% better than the IATA industry

average



II. Prices of Post 2012 Instruments

Carbon tax in Australia proposed to be A$23 per ton of CO2eq. *A draft legislation for the scheme is published which is open for public comment till 22 August, 2011. Government aims to win approval by the end of this year.

III. Fact of the Week

PAMs stands for Policies And Measures, referring to the steps

taken or to be taken by countries to reduce their greenhouse

gas emissions under the UNFCCC and the Kyoto Protocol. Some

examples of PAMs are as follows: Strategies for energy

industries to abate greenhouse gas emissions, Renewable

Energy Commercialization Program, Mandatory targets for the

uptake of renewable energy, Introduction of energy

performance codes and national standards for domestic

appliances and commercial and industrial equipment. Within EU

it concerns action primarily in the field of energy, transport,

industry and the environment.



IV. Market Structure

European Union Emission Trading Scheme

(EU ETS)

Launched in 2005, the EU ETS works on the "cap and trade"

principle and is the only confirmed scheme upto 2020. This

means there is a "cap", or limit, on the total amount of certain

greenhouse gases that can be emitted by the factories, power

plants and other installations in the system. Within this cap,

companies receive emission allowances which they can sell to

or buy from one another as needed.

At the end of each year each company must surrender enough

allowances to cover all its emissions, otherwise heavy fines are

imposed. If a company reduces its emissions, it can keep the

spare allowances to cover its future needs or else sell them to

another company that is short of allowances. The number of

allowances is reduced over time so that total emissions fall. In

2020 emissions will be 21% lower than in 2005.

In case the companies do not have allowances the emissions

need to be offset by instruments such as the Certified Emission

Reductions (CERs). The EU ETS has stated that from 2012

onwards CERs from only Least Developed Countries will be

allowed to be traded. The EU ETS has also banned acceptance

of CERs accrued from projects for industrial gases. These

allowances and CERs are traded on various trading platforms

such as the European Climate Exchange of Intercontinental

Exchange.

V. Policy Focus This Week China - Nationally Appropriate Mitigation Actions Plan South (NAMA)

China communicated that it will endeavour to lower its CO2

emissions per unit of GDP by 40–45% by 2020 compared with

the 2005 level. It also expressed the intention to increase the

share of non-fossil fuels in primary energy consumption from

8% to around 15% by 2020 and to increase forest coverage by

40 million hectare and forest stock volume by 1.3 billion m3 by

2020 compared with the 2005 levels. China stated that the

autonomous domestic mitigation actions are voluntary in

nature and therefore non-binding.

VI. Expert View

Climate Connect attended a workshop on

the 11th

of August regarding NAMAs in the

BASIC countries (Brazil, South Africa, Indi

and China). Experts from the four BASIC

countries were present at the workshop. At the workshop it

was discussed whether appropriateness can be different at

national and international level and if it will lead to duplicity of

works for national authorities.

The expert from Brazil, Mr. Morrow G. Campbell III stated that

the Ministry of Environment in Brazil was a late comer to

climate negotiations. He stated that “the climate dialogue for

Brazil at the international platform is handled by Ministry of

Environment, Department of Climate and also Ministry of

External Affairs.” The experts including Dr. Teng Fei (Tshingua

University, China), Ms. Anya Boyd (University of Cape Town,

South Afirca) and Ms. Neha Pahuja (TERI, India) agreed that the

NAMAs need to be agreed at the national level as each one of

them has their own peculiarities.

VII. Market Intelligence

US based Green Automotive Company Corporation, announced

that it has retained CantorCO2e L.P. to market the Zero

Emission Vehicle (“ZEV”) credits and carbon credits resulting

from the sale of Green Automotive vehicles in North America.

Spire Corporation, a global solar company that provides capital

equipment and turnkey manufacturing lines to produce

photovoltaic (PV) modules, announced that it has established a

wholly owned subsidiary, Spire Solar Technologies Private Ltd,

that will have an office in Bangalore, India.

Emissions offset developer ClimateCare said it has been taken

private in a management buyout from JPMorgan Chase & Co.

as it seeks to expand investment in the United Nations carbon

offset market.



VIII. Upcoming Events

Event Date Location

26th meeting of the JI Accreditation Panel 4 Aug- 5 Aug, 2011 Bonn, Germany

13th RGGI Auction 7 Sep, 2011 New York, US

Pre-UNFCCC COP 17 African Energy Ministers Conference

15 Sep- 16 Sep, 2011 Johannesburg, South Africa

63rd EB Meeting 19 Sep- 23 Sep, 2011 Bonn, Germany

UN Climate Change Conference (AWG-KP 16 and AWG-LCA 14)

1 Oct- 7 Oct, 2011 Panama City, Panama

52nd Meeting of the MP 3 Oct- 7 Oct, 2011 Bonn, Germany

UNEP's 2011 Intergovernmental Platform on Biodiversity and Ecosystem Services

3 Oct- 7 Oct, 2011 Nairobi, Kenya

Global Green Growth Forum 11 Oct- 12 Oct, 2011 Copenhagen, Denmark

Global Green Growth Forum (3GF) 11th - 12th October 2011, Copenhagen

3GF’s inaugural gathering will take place in Copenhagen, 11-12 October 2011. The annual two day event will bring together 200

carefully selected global leaders across business, finance and public institutions to engage in in-depth discussions around best

practice initiatives, supportive policies, and collaboration opportunities to accelerate green growth. The Forum will consist of three

interacting levels

Parallel strategy sessions - These will focus on accelerating scale and pace across energy and transport projects, while also

addressing additional key initiatives with a more general scope, such as public procurement, smart financing and water

resource

Parallel panels – These will focus on energy, transport, finance and international markets

Plenary sessions- These will address Building an Enabling Environment to Catalyze Green Growth, National Action on Green

Growth, International Action on Green Growth and Catalyzing Ambitious Green Growth: An Agenda for Collaborative

Action.

For more and latest updates on events visit: www.climate-connect.co.uk

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Post 2012 Carbon Market Report Sample