Fwd: U.S. Northeast Carbon Futures Jump Before Contract Expires

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U.S. Northeast Carbon Futures Jump Before Contract Expires
2010-12-10 23:20:57.341 GMT

By Simon Lomax
Dec. 10 (Bloomberg) -- Carbon dioxide futures in the U.S.
Northeast's cap-and-trade program rose the most in almost two
years in advance of the contract's Dec. 31 expiration.
December-delivered permits from the Regional Greenhouse Gas
Initiative increased 8 cents, or 4.3 percent, to $1.93 each on
the Chicago Climate Futures Exchange, rising from a record low.
It was the biggest one-day gain since Jan. 5, 2009, according to
data compiled by Bloomberg.
The price jump was probably the result of traders covering
short positions and feeling "pressure to roll off the old
contract" before it expires, said Greg Arnold, managing partner
at CE2 Capital Partners LLC, a Solana Beach, California-based
investment firm that specializes in environmental markets.
Futures in the Northeast's carbon market for power plants
have fallen 16 percent this year. The market is "over-
allocated" with carbon-dioxide permits, Arnold said in a
telephone interview.
Last week, the regional carbon-trading program offered 45.3
million carbon dioxide permits at auction. Only 57 percent of
the permits sold for $1.86 each, the minimum allowable bid. Each
permit represents one ton of carbon dioxide.

For Related News and Information:
Top environment stories: GREEN <GO>
Stories about U.S. and climate: TNI US CLIMATE <GO>
Global emissions data: EMIS <GO>
Northeast U.S. trading: RGGI <GO>

--Editors: Steve Geimann, Joe Winski

To contact the reporter on this story:
Simon Lomax in Washington at +1-202-654-4305 or

To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or