NYMEX’ Green Exchange Completes First Week Of Trading
The Green Exchange
was off to a flying start last week. The exchange is part of the New York Mercantile Exchange (NYMEX) and was launched a few months back and so far, volumes have exceeded expectations.
A total of 1.59 million tonnes of carbon was traded on the Green Exchange in its first week. The news reports indicate that this volume is ‘the most successful launch of exchange-traded carbon contracts’.
Products in which the Green Exchange specializes include European Union carbon allowances futures (EUAs), Certified Emissions Reductions (CERs). Each EUA and CER contract represents 1,000 tonnes of CO2. Other contracts traded include SO2 (sulfur dioxide) allowances and NOx (nitrogen oxide) allowances.
This is not the first Green bourse in the US. The exchange competes with the Chicago Climate Exchange (CCE). Created in 2003, the CCE trades carbon on behalf of 300 companies, including American Electric Power, Ford Motor Co., International Paper, Manitoba Hydro Corp., Motorola Inc., STMicroelectronics.
The institutions involved in the Green Exchange’s launch are the most likely ones to have participated in the trading last week. They were Evolution Markets, Morgan Stanley, Credit Suisse, JPMorgan, Merrill Lynch, Tudor Investment, Constellation Energy, Vitol SA and RNK Capital.
Europeans are far ahead of Americans in terms of carbon trading. Last year, $62 billion (E40 billion) worth of carbon credits were traded in on the European Climate Exchange (launched in 2005 by CCX), which was a massive hike of 80% compared to the year before. The ECX operates in the European Union Emissions Trading Scheme.
Carbon trading mostly is on a voluntary basis. This 60 page study into the voluntary carbon trading market place by Ecosystemmarketplace.com provides good insights on the corporate sector’s involvement.