Carbon Trading Market Requires Improved Infrastructure to Curb Greenhouse Gas Emissions on a Global Scale, According to Bank of
December 10 2008 - 9:00AM
PR Newswire (US)
NEW YORK, Dec. 10 /PRNewswire-FirstCall/ -- The development of a
successful global carbon trading market that delivers real and
cost-efficient greenhouse gas emission reductions will require an
improved market infrastructure, according to a report issued today
by The Bank of New York Mellon entitled, "Towards a Common Carbon
Currency: Exploring the Prospects for Integrated Global Carbon
Markets." The report -- prepared in conjunction with Point Carbon,
a world-leading provider of market intelligence, forecasting and
advisory services for the energy and environmental markets -- finds
that for a global carbon trading market to allocate capital to the
lowest cost carbon reduction projects worldwide it must be based on
standardization, liquidity, transparency and predictability. Other
key findings of the report include: -- Reliable information on
market prices, volumes and transactional behavior will add greater
transparency, which will provide companies, investors and
regulators with critical benchmarks to assess carbon exposure. -- A
high level of risk surrounding the future value of carbon prices,
due to political uncertainty, would impede the functioning of the
market as a way of reducing emissions at the lowest cost. -- A
plethora of mandatory and voluntary programs has created a
fragmented approach to addressing the global environmental
challenge. Consolidation is needed for the market to be more
effective at reducing greenhouse gas emissions. -- Linking existing
and planned programs and creating a framework for efficient global
trading would allow the global carbon market to grow from $63
billion (year-end 2007) to $3 trillion by 2020. "While short-term
impediments exist, the development of a truly global, market-based
approach represents the most promising, standardized and
transparent way to curb greenhouse emissions," said Scott Posner,
chief executive officer of Global Corporate Trust at The Bank of
New York Mellon. "The financial industry must do its part by
providing a reliable infrastructure that improves the performance
of the market and builds the confidence of investors and
politicians alike." The paper recognizes the political and
practical challenges of reconciling differing worldviews of what
constitutes real, permanent and verifiable emissions reductions.
"Creating a more efficient global carbon market by linking global
cap and trade programs and continuing the use of international
offsets will reduce more greenhouse gas emissions at a faster rate
and at a lower cost than would be possible through national or
regional programs alone. This recognition originally embedded in
the Kyoto Protocol needs to remain at the core of a new
international framework on climate change," said Kjell Olav
Kristiansen, director of Advisory Services at Point Carbon. The
paper advocates the development of a linked "cap and trade" market
model, in which emitters are offered the widest set of options to
reach their emission reduction targets, including the use of
imported allowances or offsets. The paper is available at The Bank
of New York Mellon's website at
http://www.bnymellon.com/carboncurrency and Point Carbon's website
http://www.pointcarbon.com/advisory/newreports. Through its Global
Corporate Trust business, The Bank of New York Mellon offers a
global custody service to facilitate trading of voluntary carbon
units (VCU). Point Carbon is a world-leading provider of
independent news, analysis and consulting services for European and
global power, gas and carbon markets. Point Carbon's comprehensive
services provide professionals with market-moving information
through monitoring fundamental information, key market players and
business and policy developments. The Bank of New York Mellon
Corporation is a global financial services company focused on
helping clients manage and service their financial assets,
operating in 34 countries and serving more than 100 markets. The
company is a leading provider of financial services for
institutions, corporations and high-net-worth individuals,
providing superior asset management and wealth management, asset
servicing, issuer services, clearing services and treasury services
through a worldwide client-focused team. It has $22.4 trillion in
assets under custody and administration, approximately $1.1
trillion in assets under management and services approximately $12
trillion in outstanding debt. Additional information is available
at http://www.bnymellon.com/. DATASOURCE: The Bank of New York
Mellon Corporation CONTACT: The Bank of New York Mellon, Kevin
Heine, +1-212-635-1590, ; or Point Carbon, Jenna Agins,
+1-212-754-5613, Web Site: http://www.bnymellon.com/
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