any comments on the below...folks? "We will see if spot trading becomes more important in the
carbon markets, assuming industrial buyers buy in the phase-
three auctions, or if the spot market will be squeezed between
the auction and the futures markets." The third phase of the EU
carbon market runs for the eight years through 2020.
+------------------------------------------------------------------------------+
HFC Credits 'Not Evil,' Helping China, BlueNext Investor Says
2010-10-08 11:22:30.201 GMT
By Mathew Carr
Oct. 8 (Bloomberg) -- Pierre Ducret, chairman and chief
executive officer of CDC Climat, speaks about emissions tied to
hydrofluorocarbons, green bonds and its 40 percent stake in the
BlueNext exchange.
CDC Climat, based south of Paris, is the climate-protection
unit set up in February by Caisse des Depots et Consignations,
the French state-owned bank. Ducret spoke in an interview at the
Carbon Show in London this week.
The United Nations body that runs the Clean Development
Mechanism, where polluters in developed countries can earn
credits for cutting emissions in poorer nations, is
investigating projects that stop HFC-23, a waste product from
making refrigeration gas. Such projects can reduce emissions at
a cost of about 1 euro ($1.31) a metric ton, Barclays Capital,
the London investment bank, estimated last month. The reductions
entitle developers to an offset valued at more than 10 euros.
On HFC-23 credits:
Spending 5 billion euros on HFC-reduction credits isn't a
lot of money if it helps put China and India on a lower-emitting
pathway, Ducret said. "It was an education. We don't think that
industrial-gas projects are evil. Some of them may have produced
windfall profits. It's not fair they are used to discredit the
whole mechanism.
"We have to come back to these fundamental questions of
compensation and offsets. We have to defend this system where
compensation is a good thing. It allows us to distribute the
price signal all over the world."
On possible UN and EU regulatory proposals that may change
offset rules retroactively for the five years through 2012:
"It will be terrible. It will be very, very difficult to
convince investors to come back."
On green bonds:
"We think it's a good idea. It's more and more difficult
to attract financing."
On a potential Sub-Saharan Africa fund:
"It's important to help them in the transition to a low-
carbon economy." The fund may invest in solar or cooking-oven
projects that can be combined under the CDM, Ducret said. "It
should be possible to aggregate on a large scale."
On BlueNext and spot trading:
CDC doesn't want to sell its stake, Ducret said. "It's in
a difficult moment of its young history. Yes, it's losing
share." The EU decision on auctioning permits for phase three
of its carbon-trading program, "will be the moment of truth."
"The spot market exchanges may be in a better position to
be the primary market. BlueNext is well positioned to bid on the
tender for phase-three auctions."
EU lawmakers will probably choose a platform "that's a
tool for building the market, not for building financial
intermediaries. We're confident BlueNext will gain a decent
share in the futures market."
"We will see if spot trading becomes more important in the
carbon markets, assuming industrial buyers buy in the phase-
three auctions, or if the spot market will be squeezed between
the auction and the futures markets." The third phase of the EU
carbon market runs for the eight years through 2020.
On value-added tax fraud in the carbon market:
"We were the first to ring the alarm bell."
On EU and UN-overseen regulation of the carbon markets:
"Market mechanisms are very sophisticated new tools. They
are very demanding for the regulators."
For Related News and Information:
Emissions-trading stories: NI ENVMARKET BN <GO>
Today's top energy news: ETOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Mike Anderson, Alex Devine.
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
