Tag Archives: credit
How to Profit from Real Estate in Dubai
Since the Crown Prince of Dubai made changes to his country’s constitution back in 2002 to allow for the foreign freehold ownership of real estate in Dubai, … Continue reading
China’s National Carbon Credit Exchange Likely Delayed To 2016-2020
More time is needed for the nation’s seven pilot exchanges to build up sufficient data-collection infrastructure and trading rules Friday, 14 June, 2013 David Tang of Tianjin Climate Exchange says China’s carbon bourses need verification of the data they receive. Photo: Dickson Lee The mainland will not be in a position to form a national exchange to trade carbon emission rights until after 2015, according to an official of one of seven pilot exchanges. It will take time for the nation’s seven pilot exchanges to build up sufficient data-collection infrastructure and trading rules, let alone operate smoothly and come up with a model that works nationwide, said David Tang Yue-tan, secretary of the board of Tianjin Climate Exchange. “China has committed to developing many different carbon markets over the next three years, and hopefully a national market sometime between 2016 and 2020,” he told a climate-change investor forum. “In the past, rumours had it that that a national market could be up and running by 2015. But, I can assure you, that is just not feasible.” Besides having good data, the exchanges would also need reliable and independent verification of the information submitted, he said, adding that a certain degree of liquidity was necessary for efficient price discovery, which meant that financial intermediaries would be enlisted. China has not signed binding international agreements on carbon emission reduction. It has said it would aim to reduce its energy intensity by 17 per cent between 2011 and 2015. Intensity is measured by emission per unit of gross domestic product. In late 2011, Beijing ordered carbon exchanges be set up in pilot form. There was to be one in each of Beijing, Tianjin, Shanghai, Shenzhen and Chongqing, as well as the provinces of Guangdong and Hubei, by the end of 2013. On Tuesday, the Shenzhen one will become the first to start operating. Tang said Tianjin was in the middle of the pack in terms of preparedness to launch. Each of the exchanges will identify industries to be subject to emission quotas. Polluters that emit less than their quota will receive credits that they can sell on one of the exchanges to those which exceed theirs. Such “cap and trade” market systems have been operating abroad for decades and are believed to be the most efficient way to allocate responsibility and reduce pollution. Since polluting heavy industry forms a bigger portion of Tianjin’s economy than “post-industrialised” cities like Beijing, Shanghai and Shenzhen, Tang said it held the advantage of being able to jostle for a key role in any national carbon exchange. “Our target is to become the backbone of the national exchange,” he told the Post on the sidelines of the conference. “Our industry structure is more suited to cap-and-trade, since it is more cost efficient to subject larger polluters to emission caps than small ones.” Tianjin has identified more than 100 firms in industries including power generation, oil, and steel as targets for the trade. Tang said China’s unique situation – including its state energy pricing that does not allow emission costs to be easily passed on to end users – meant it should adopt flexible emission caps. This would allow it to avoid what happened in Europe: carbon credit prices plunged when recession hit. Continue reading
Give Credit Where Carbon Credit’s Due
CRITERION From:The Australian June 06, 2013 AS the two listed providers of carbon sinks — growing trees to generate carbon credits — Carbon Conscious (CCF, 2.8c) and CO2 (COZ, 9.5c) have endured the pall of political uncertainty around the abatement issue. But they may be in a better than anticipated position when (barring a Ruddy miracle) Tony Abbott and his climate sceptics storm the frontbenches in September. It’s widely assumed that given the Coalition has pledged to abolish the carbon tax — Senate willing — there’s no incentive for companies to invest in carbon-soaking schemes. Indeed, Carbon Conscious client Origin Energy last year declined to extend a tree-planting deal. But there’s bipartisan agreement to reduce Australia’s emissions by 5 per cent by 2020, with the Coalition pledging to set aside $1.5 billion over three years to buy credits generated by polluters. This equates to a somewhat theoretical price of $15 a tonne, compared with the current temporary floor price of $23/t. Given the slowdown in sequestration investment, CO2’s Andrew Grant says the government may struggle to obtain local credits, in which case the market will push up the price. And, no, dirt-cheap European credits can’t be imported. CO2 yesterday announced the first issue of Australian Carbon Credit Units (ACCUs) from a reforestation project, on behalf of goldminer Newmont. In other words, Newmont can now offset any carbon tax liability from its two Australian mines and avoid paying the carbon tax. Carbon Conscious also announced its method for measuring the carbon-soaking abilities of its 18,000ha of forests had been approved by the clean energy regulator. Carbon Conscious chief executive Andrew McBain expects this acreage to generate 300,000 ACCUs over the next 10 to 15 years, with 10 per cent owned by the company and the rest by clients. “The revenue potential is substantial, especially for a smaller company like ourselves,” McBain says. CO2’s tapestry is more complex as it derives revenue from eco investments and advice and is building a low-cost tiger prawn hatchery in Western Australia. Grant is unfazed by the abysmal listed history of aquaculture plays.”Collingwood doesn’t benchmark itself against Melbourne,” he says. Like the hapless Demons, both stocks are chalking up nasty losses, but we give them credit for being years ahead of sequestration rivals. We’ll avoid Carbon Conscious (market cap $2.9m) in favour of the bigger CO2 ($43m). ISS Group (ISS) 32c MICROEQUITIES’ Carlos Gil has a sense of deja vu as he saddles up to ward off a US takeover attempt at a local mining-focused house. P2ES Holdings is offering 33c a share for ISS, which boasts a proprietary IT system for the oil and gas sector called BabelFish. Microequities owns 9 per cent of ISS and Gil reckons the offer price (a 50 per cent premium on Tuesday’s close) doesn’t reflect the value of the “great little software”. In 2011 Microequities fought in vain to prevent Triple Point from taking over QMastor, but not before the suitor improved its offer. This time around it’s trickier because the offer is board-endorsed, but Gil reckons he can still get the 25.1 per cent support to stymie the scheme of arrangement. We had ISS as a spec buy at 17c and now call the stock a hold. For the record, Gil would accept 40c a share. Given the Hitchhiker’s Guide to the Galaxy allusion to BabelFish, let’s make it 42. Macmahon Holdings (MAH) 16c THE mining contractor yesterday had no idea why Swiss giant Glencore had dumped it from a $110m project — and by sunset was still as bemused as a lost puppy. Investors won’t give mining-service plays the benefit of the doubt and Macmahon’s already trashed shares lost another 2c (11 per cent). The terminated assignment — extending the main shaft of the CSA copper mine near Cobar — was minor in the scheme of Macmahon’s $1.4bn revenues and $3.9bn job book. On a brokers’ trip to the Pilbara last month, Fortescue reps waxed lyrical about Macmahon’s prosecution of the $1.8bn Christmas Creek expansion. Macmahon has guided to a full-year loss of up to $20m. CSA won’t be the last shafted mining project, but we believe the Macmahon sell-off has been overdone and rate the stock a buy. borehamt@theaustralian.com.au The Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not own shares in any of the companies mentioned. Continue reading
