Sorry no posts this week. With the financial crisis ive been witnessing first hand, and a pretty bad cold this weekend, i havent had the chance to put together a listing of articles. I did come across an article that is timely given the Wall St meltdown this past week and I copied it below.
But first, I just have one observation that I’ll mention given the amount of turmoil in the Unites States right now. Since Im in the US, Ive been waiting patiently for the next president to push a national carbon Cap and Trade scheme through. Both presidential nominees are for a national scheme, considerable work has been done in congress, and the country is more aware of global warming than it has ever been. So I have been pretty optimistic that the US would pass a carbon cap and trade scheme sometime in the near future.
That optimism has crashed over the past week however. Our economy is in terrible shape, our financial system has imploded, and taxpayers will now be burdened with a one trillion dollar bailout. I would like to think that the bailout will help, and it may temporarily, but I believe it is a band aid and not a panacea.
On top of our failing financial system, the US consumer is on life support. Consumers have taken on an incredible amount of debt over the past 10-15 years, are facing crashing home prices, a slowing economy, and rising unemployment.
I do not believe there is an easy way out and I fear we are now heading into a protracted recession, and quite possibly a depression.
My point is that it is hard to imagine our country being focused on anything other than trying to get back on track over the next two years. While many will care about the climate, they will care more about filling their tank up with affordable gas and keeping their utility bills as low as possible. Any regulation that could be argued as an extra cost to do business and something that could slow GDP growth will not stand a chance, whether the argument stands merit or not.
So with that said, here is the article I originally mentioned before my rambling:
The US financial crisis is expected to have an impact on the global carbon credit market, given that Lehman Brothers and Morgan Stanley are said to have huge carbon assets.
The carbon assets of Lehman Brothers, which filed for Chapter 11 protection on Monday, are likely to be liquidated sooner or later. While the total quantum of its carbon assets in the issed form and in the forward market is not available, industry experts said the same would have a direct impact on prices of carbon credits, when offloaded.
Said Ram Babu, managing director, CantorCO2e India, “there could be a temporary fall in CER prices as and when these assets are sold in the market.” Another carbon industry expert, however, said that the impact would not be significant as CER price would bounce back.
“If these are mostly carbon assets in the forward market, mainly from China, these would be a high risk associated. When these assets are liquidated, one presumes, the would be sold at cheap rates. Thus the impact on CER prices,” said the expert.
Certified emmission reductions (CERs) or carbon credits are global greenhouse gas emission offsets traded under the Kyoto Protocol’s Clean Development Mechanism (CDM) scheme of the United Nations. Lehman had shut down its carbon desk after it filed for bankruptcy.
The impact of Lehman’s collapse would also be felt on the CDM project side wherever it had invested or was planning to invest. The projects are located mostly in China and reportedly are expected to generate 10 million-12 million CERs by 2012.
CER prices on the European Climate Exchange (ECX) had declined by 5% on Wednesday, after crude prices went down by 18%. In the spot market, the prices are ruling around euro 20.
Source: IndiaTimes.com
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