Tag Archives: markets
Market Mechanisms At The Heart Of Government Climate Actions
WEBWIRE – Tuesday, June 04, 2013 IETA and EDF joint report documents the rise of carbon markets globally Today, the International Emissions Trading Association (IETA) and The World’s Carbon Markets: A case study guide to emissions trading, a collaborative series of case studies examining carbon market development around the globe. Note: The case studies are available at www.edf.org/worldscarbonmarkets . The report compares key features of current and prospective policies in 18 jurisdictions around the world. It is a resource for policy makers, analysts, and anyone interested in learning more about emissions trading. The report focuses on both mature carbon markets, such as the European Union Emissions Trading System (EU ETS) and the northeastern U.S. Regional Greenhouse Gas Initiative (RGGI), and also emerging policy developments across the world, from Kazakhstan to Mexico to China. IETA CEO and President Dirk Forrister said, “This is an exciting time for climate action powered by markets. This landmark report showcases the wide range of countries taking serious decisions on climate change. Many have concluded that market mechanisms make the most sense in achieving emissions reductions while preserving economic growth.” “Emissions trading programs vary in their features, but they all share the key insight that well-designed markets can be a powerful tool in achieving environmental and economic progress,” EDF vice president for international climate Nathaniel Keohane said. “Market-based policies are a proven way to limit carbon pollution and channel capital and innovation into clean energy, helping to avert the catastrophic consequences of climate change. Policy makers considering market-based approaches can take inspiration from the growing number of jurisdictions already headed in that direction. These case studies are meant to help point the way.” By providing a comprehensive overview of the features of different trading systems, the report also can help to facilitate “linking” of carbon markets, where doing so can enhance the effectiveness and performance of existing programs. For example, California and Québec expect to host their first joint auction in January 2014. The European Union (EU) and Australia will commence a two-stage linking process from 2015. Mr Forrister commented, “As carbon markets diversify, IETA believes it is essential to communicate the different approaches in a clear way. This report can help policymakers see what their peers in other parts of the world are doing on carbon market design. The imperative to link is still there, to gain greater efficiency and reduce the costs of achieving policy targets.” Mr Forrister added, “Understanding and comparing program elements is key to building these necessary linkages, and ensuring that environmental integrity is maintained or even strengthened.” IETA and EDF have developed these case studies to give businesses, policymakers, and thought leaders a clear picture of global carbon market developments occurring around the globe. About the International Emissions Trading Association (IETA) IETA has been the leading voice of the business community on the subject of carbon markets since 2000. IETA’s 150 member companies include some of the world’s leading corporations, including global leaders in oil, electricity, cement, aluminum, chemical, paper, and other industrial sectors; as well as leading firms in the data verification and certification, brokering and trading, legal, finance, and consulting industries. Environmental Defense Fund Environmental Defense Fund, a leading national nonprofit organization, creates transformational solutions to the most serious environmental problems. EDF links science, economics, law and innovative private-sector partnerships. Continue reading
Global Carbon Markets Characterised By Ups And Downs
Vivian Nereim May 31, 2013 Save this article The unregulated voluntary market makes up a tiny percentage of carbon markets worldwide. Most trading happens on regulated markets, such as the European Union Emissions Trading Scheme, the largest carbon market in the world. The EU market launched in 2005 with the goal of combating climate change. Certain companies, such as power plants and airlines, are required to cap and trade their emissions. Each “EU allowance” traded represents the permission to emit one tonne of carbon dioxide or the equivalent amount of another greenhouse gas. While the voluntary market is characterised by one-off deals, markets such as the EU’s have a standardised product that is traded on an exchange, said Konrad Hanschmidt, head of carbon markets analysis for Bloomberg New Energy Finance. Market players can watch the price tick up or down by the second. The EU market has suffered recently, however. The average price for EU allowances fell from double digits in 2011 to just €3.75 (Dh17.96) recently, according to data from Thomson Reuters Point Carbon. Meanwhile, United Nations-backed carbon credits, called Certified Emissions Reductions, are trading for less than €0.50, having fallen 99 per cent since 2008. * Vivian Nereim Read more: http://www.thenation…s#ixzz2VLZ0aR9n Follow us: @TheNationalUAE on Twitter | thenational.ae on Facebook Continue reading
Column: Housing Rebound Boosts Timber Stocks
By John Wasik CHICAGO | Mon Jun 3, 2013 4:42pm EDT (Reuters) – If a tree falls in the forest, can you make a little money? As the U.S. housing rebound continues, you can watch the value of your real estate rise. In addition you can reap gains from resource companies that own and process timber. Since most U.S. homes are still framed with wood, timber becomes a more valuable commodity as new construction booms. Home prices gained the most in seven years in March, according to a recent S&P Case-Shiller housing index report. Housing starts in April rose 16 percent over the previous month with new building permits up 14 percent, according to the U.S. Census Bureau. North American sawmills are running at the fastest pace in six years, up nearly 7 percent over last year, according to CIBC World Markets , a Canada-based investment bank. Growth in China is also contributing to the rebound. More than 60 percent of log exports from the Pacific Northwest head to the People’s Republic. Timber is also becoming more scarce as forests shrink. As a commodity, it provides an inflation hedge, too; the S&P Global Timber & Forestry index has produced an annualized return of nearly 7 percent over the past three years through April 30. The current Consumer Price Index is running at an average 1 percent. Why invest in timber and related resource companies instead of the obvious play in homebuilder stocks ? Those companies have been rallying for more than a year and are pricey. The SPDR S&P Homebuilders ETF, for example, a fund that holds most of the major home-construction companies, is up more than 50 percent over the past year through Friday, almost double the price of a consumer cyclical index. That portfolio’s price- earnings ratio – what investors are willing to pay for a dollar of expected earnings – is 20, compared to 14.4, for the SP 500. The underlying S&P index for the timber sector has climbed more than 31 percent over the past year through May 31 compared to a nearly 50-percent gain for the S&P Homebuilders Index. The iShares Global Timber and Forestry Index ETF (WOOD), has p/e of 18; that’s not a bargain price either, but timber stocks are a better value now relative to homebuilding stocks and may have more upside. REGIONAL VIEW Most timber companies specialize in specific regions where they own or lease properties. But to obtain global diversification, it’s best to consider one of two exchange-traded funds on the market that hold timber, packaging and real estate investment trusts (REITs) that own lumber resources. The Guggenheim Timber ETF, holds major producers like Weyerhaeuser Co and International Paper Co. It tracks the Beacon Global Timber Index, which holds companies that own or lease forested land or produce wood-based products. More than 40 percent of the companies are based in greater Europe or Asia. It’s up 8 percent year to date through May 31 and gained 25 percent last year. As an alternative, the iShares timber ETF mentioned above has more than 60 percent of its holdings in the Americas, including Plum Creek Timber Company Inc and Potlatch Corp . The iShares fund is a better deal on expenses than the Guggenheim product, charging 0.48 percent annually for management, compared to 0.70 percent for the Guggenheim fund. It’s gained 4 percent year to date and 23 percent last year. Of the two ETFs, the iShares fund offers more total international exposure, including 13 percent stakes in Brazilian companies and 11 percent in Japan , says Eric Dutram, ETF analyst at Zacks Investment Research in Chicago. Either way, the two funds are reasonably priced, he said. Many timber companies give you a bonus if they’re vertically integrated. They could mean they are producing value-added products like rayon, packaging or paper, which also would benefit from a broad economic recovery. These companies may also own or lease land that may result in other mineral plays such as petroleum or natural gas . Keep in mind that timber trends can cut the other way. As funds specializing in a handful of commodities that rise and fall directly with economic demand, these ETFs are not for nervous investors. Guggenenheim Timber lost nearly half its value in 2008 and has a 32-percent five-year standard deviation, a volatility gauge. That compares to 20 percent for a world natural resources stock index. If the housing market goes south again, then these ETFs will suffer. Consider them only as small parts of a larger portfolio and not large holdings. (The author is a Reuters columnist and the opinions expressed are his own. For more from John Wasik see link.reuters.com/syk97s ) (Follow us @ReutersMoney or here Editing by Linda Stern and Andrew Hay) Continue reading
