Thursday, January 7, 2010

Frustrated carbon traders try other commodities

Yeah, I got your "market-based" solutions.
From Reuters:
Some carbon emissions trading desks are expanding or diversifying into other commodities as continued low carbon prices and a weak U.N. climate deal have dulled the market.

Several large banks in the European Union's emissions trading scheme (EU ETS) already operate in other energy or commodities markets. Some smaller participants are seeking to diversify as well.

Paris-based COER2 Commodities will start trading crude oil futures, natural gas, gold and base metals from mid-January, adding to its existing carbon emissions trade. "This was part of our strategy since last September. We want to be more involved in the futures commodities markets which is our real core business," a company spokesman said.

Fortis Bank Netherlands started to diversify into other European energy markets toward the end of last year.

"I have put my best people on soft commodities and oil. At the moment I don't see there is a proper business to be had in carbon," Seb Walhain, the bank's head of environmental markets, told Reuters this week.

EU permit prices, considered the global benchmark, fell by 21 percent last year and are now down nearly 60 percent from 2008's highs....MORE