GREEN EXCHANGE SETS UP TO MEET THE FUTURE

Better watch out. But go ahead and shout. Cap-and-trade is coming to town. (See SENATE STEPS UP TO CAP-AND-TRADE)

Nancy King, Managing Director/Head of U.S. Emissions, Morgan Stanley: "We believe the global emissions markets represent huge growth potential and are excited to be part of the development of this important exchange."

Imagine how well advertising would sell on the NewEnergyNews page if she said something like that about us.

The Green Exchange will be carbon neutral. It will offset its electricity use with Green-e certified renewable energy credits, and non-power emissions through voluntary carbon credits.

Get used to it.

Constellation Joins Green Exchange Carbon-Trading System
December 12, 2007 (AP via Yahoo Finance)
and
NYMEX, Banks, Brokers to Form The Green Exchange – The World’s Most Comprehensive Environmental Marketplace
Michael Szabo, December 12, 2007 (Reuters)

WHO
Constellation Energy Group Inc., Morgan Stanley Capital Group Inc., Credit Suisse Securities, JPMorgan Chase & Co., Merrill Lynch, Tudor Investment Corp., ICAP PLC, Evolution Markets, the Chicago Climate Exchange (CCX), the New York Mercantile Exchange (NYMEX)

The Green Exchange logo. (click to enlarge)

WHAT
The Green Exchange will join the Chicago Climate Exchange as a US exchange in the trading of carbon credits and carbon offsets. It begins with commitments from an assortment of major players and will operate under the auspices of NYMEX. It will trade environmental futures, options and other financial instruments tied to climate change, renewable energy and other environmental issues.

WHEN
- 2006: emissions trading valued at $91 million in US.
- 2006: CCX trading valued at $36.1 million.
- Green Exchange products will begin trading in the 1st quarter of 2008. The venture is expected will launch as a U.S. Commodity Futures Trading Commission (CFTC)-regulated exchange in the 1st quarter of 2009. (if regulators approve).

WHERE
- All contracts cleared through the NYMEX. NYMEX is the world's largest physical commodity futures and options exchange.
- Products will be listed on the CME Globex electronic trading platform and will be cleared on the NYMEX ClearPort platform.

WHY
- The exchange will at first offer trading in global carbon-based contracts, such as carbon allowances (EUAs) under the European Union Emissions Trading Scheme (EUETS), carbon credits (CERs) under the U.N. Clean Development Mechanism (UNCDM) and verified greenhouse gas emission reductions (VERs/VCUs) in voluntary markets, as well as contracts for U.S. SO2 and NOx emissions allowance trading programs and national Green-e certified voluntary renewable energy certificates (RECs).

CER data from Reuters. (click to enlarge)

- According to Ecosystem Marketplace, a nonprofit that tracks environment-associated markets, carbon emission credit trading tripled from 2005 to 2006.
- CCX members agree on voluntary caps and trade according to needs.
- NYMEX and its partners have worked out details with utilities, investment banks, environmental brokers, environmental groups, and institutional asset managers and consulted with environmental groups to set the best possible voluntary carbon and renewable energy offset standards for their products.
- Additional partners from banks, brokers, hedge funds, and energy and industrial corporations are expected to join.

QUOTES
- NYMEX Chairman Richard Schaeffer: "The broad slate of new environmental products will perfectly complement NYMEX's energy complex, enabling The Green Exchange customers to efficiently manage the cost of reducing their 'carbon footprint.' The Green Exchange expects to focus on both global and regional compliance trading while also building liquidity and demand for the highest quality voluntary standards in the market. Underlying all this will be the ability for all market participants to manage risk and take positions in environmental derivatives markets."
- Evolution Markets President/CEO Andrew Ertel: "Leveraging financial markets is an essential part of addressing environmental challenges such as global warming, and The Green Exchange is the right financial marketplace at the right time. We've identified a set of contracts that address climate change, encourage renewable energy development, and tackle air quality. The Green Exchange will be more than a financial marketplace. It will be an engine behind global efforts to improve the environment."