Hill Heat

Carbon Market Insights Americas 2008 Day 3

8:00am Registration Open

9:00am – 12:00pm Modeling & Forecasting Carbon Prices (Advanced)

This workshop will present various approaches used to forecast carbon prices, in Europe and North America.

• Advantages and disadvantages of macro- and micro-economic models
• The role of time in forecasting carbon prices
• Integrating sectors in multi-sector models
• Modeling the supply of offsets

9:00am – 12:00pm Valuation of CDM Projects & Portfolios (Intermediate)

The Price is Right: Assessing Risk and Value in the Clean Development Mechanism

• Understanding political and country risks
• Price and volume risk in CDM offset contracts
• Valuation of carbon assets – state of the art tools and methodologies

Description

Clean Development Mechanism (CDM) projects present many opportunities for investors and project developers who understand the risks and opportunities embedded in the project cycle. Point Carbon presents its unique expertise on CDM projects around the world and its award-winning Carbon Valuation Tool, a web-based tool for valuation and benchmarking of CDM and JI projects and portfolios.

9:00am – 12:00pm Carbon Finance 2.0 (Advanced)

Trading in options on European Union *Allowances: liquidity, prices and pitfalls

• Structured offset products: how to tailor offset products to customer’s risk appetite?
• Bidding strategies in carbon auctions

Description

Back by popular demand, Carbon Finance 2.0 will be presented by Point Carbon jointly with key carbon market experts. The workshop will provide cutting edge analysis on the latest financial structures developed to manage the risks in these markets.

9:00am – 12:00pm The New Offset Landscape: North American Demand, Agriculture & Forestry (Introductory)

Greenhouse gas reduction projects in North America

• Offsets from agriculture and forestry
• The role of offsets under a future cap-and-trade program

Description

This workshop will get into the details of greenhouse gas emissions reduction projects in North America. We will discuss emerging trends in offset types and protocols, especially in forestry and agriculture. Participants will learn what types of emission credits are generated, as well as how they are verified and marketed. We will hear from some of the key players in the North American offset market on preparing for the role of offsets under a future cap-and-trade system.

Marriott Wardman Park Hotel

Carbon Market Insights Americas 2008

7:00am Registration & Exhibit Hall Open

8:00am Optional Session – Carbon Markets 101

• Optional and free introduction to the carbon markets for all conference delegates.

10:00am Welcome

• Per-Otto Wold CEO, Point Carbon
• Eileen Claussen President, Pew Center on Global Climate Change

10:15am Keynote Address – The Path Forward

• Janos Pasztor, Director, Environment Management Group, United Nations
• President-elect’s Environmental Advisor

Topics:

• Statement of behalf of the Secretary-General
• The new administration’s climate plan
• The impact on ongoing negotiations for a new international agreement
• Timeline and targets for climate policy developments

Description: What will the new administration do about climate change? Will a cap-and-trade bill be passed in the first 100 days of the new presidency? Will the US agree to a new international climate treaty? We’ll hear the latest on this from a key advisor to the president-elect and from a top UN official, who will discuss how the US elections change the landscape of international negotiations on climate change and where the world will head after 2012, when the first compliance period of the Kyoto Protocol ends.

11:00am Plenary – US Climate Policy: What’s Ahead?

• Moderator: Eileen Claussen, President, Pew Center on Global Climate Change

Topics:

• Steps taken and lessons learned on climate change policy in the 110th Congress
• Expectations for a new Congress and Administration on enacting climate policy in 2009
• Major challenges, including cost-containment and allowance value distribution to enacting cap-and-trade in the US, especially in light of the current financial crisis

Speakers:

• Senator Jeff Bingaman (D-NM), Chairman of the Energy and Natural Resources Committee
• Larry J. Schweiger, President & CEO, National Wildlife Federation
• Brian Storms, CEO, APX

Description: With a new Administration and a new Congress, what can we expect to see with regard to US climate policy in 2009? What concrete steps, if any, have the Bush Administration and the 110th Congress taken to advance climate policy and what can we learn from this? If cap and trade is the preferred policy approach, what are the major roadblocks (e.g., target-setting, distribution of allowance value) on the path to successfully enacting the policy? Panelists will discuss these and other important questions policymakers will have to address if the US is to successfully address the issue of climate change.

12.00pm Lunch

1:30pm Managing Costs in a Carbon Market

• Moderator: Janet Peace, Vice President, Markets and Business Strategy, Pew Center on Global Climate Change

• Concerns about carbon markets leading to unmanageable costs for participants and the economy
• Discussion of proposed options for containing high costs: offsets, safety-valve, allowance allocation, oversight board, etc.
• How would these options affect the efficiency and performance of the market?

Panel Speakers:

• Mort Webster, Visiting Professor, MIT Joint Program on the Science and Policy of Global Change
• Jason Patrick, Vice President, Merrill Lynch
• Steve Corneli, Vice President, Market and Climate Policy, NRG Energy
• Ben Feldman, Executive Director, Environmental Markets Strategy, JP Morgan

1:30pm Evolving Regional & Global Markets

• Moderator: Denny Ellerman, Executive Director, Center for Energy and Environmental Policy Research, Sloan School of Management, MIT

• Panel of experts will discuss emissions trading systems around the world
• Comparing carbon market approaches
• Exploring possible linkages

Panel Speakers:

• Margret Kim, Senior Advisor, International Climate Change and China Program Director, California Air Resources Board
• Jill Duggan, Head of International Emissions Trading, United Kingdom
• Peter Zapfel, Directorate General for Environment, European Commission
• Tim Denne, Director, Covec Limited & New Zealand ICAP Representative

3:30pm Carbon Risk Management

• Moderator: Veronique Bugnion, Managing Director, Point Carbon

• The role played by financial institutions in managing carbon risks
• RGGI auctions: who participated and who stayed on the sidelines?
• Canadian carbon intensity based financial instruments: how does it work?

Panel Speakers:

• Annmarie Reynolds, Director, Carbon Exchange, AES
• Patrick Birley, CEO, ECX
• Olivia Hartridge, Vice President, Morgan Stanley Commodities
• Jean-Philippe Brisson, Vice President, Goldman Sachs

3:30pm The Changing Roles of States

• Moderator: Judi Greenwald, Vice President, Innovative Solutions, Pew Center on Global Climate Change

• What are the appropriate respective roles for state and federal government in climate policy?
• Are some complementary policies more effectively implemented at the state level?
• How can federal policy best support and complement these state efforts?

Panel Speakers:

• Michael Murray, Regional Vice President, Sempra Energy
• Janice Adair, Chair, Western Climate Initiative
• Michael Sole, Secretary, Florida Department of Environmental Protection
• Ray Hammarlund, Director, Energy Programs Division, Kansas Corporation Commission
• Peter Iwanowicz, Director, Climate Change Office, New York State DEC

Marriott Wardman Park Hotel, Washington D.C.

ExxonMobil, the world’s largest company by both revenue and market capitalization, has a place on the world stage comparable to a major nation-state (only 23 nations in 2006 had a GDP greater than Exxon’s revenues of $347 billion, which rose 7% in 2007). Only 31 nations exceeded its annual greenhouse gas emissions in 2004 [UN MDG indicators, ExxonMobil CDP response]. If end-use emissions of ExxonMobil’s products are included, its carbon footprint of 1 billion metric tons of CO2 equivalent is exceeded only by five nations.

David Sassoon at Solve Climate asked Mario Lopez-Alcala, a senior analyst with Innovest Strategic Value Advisors, to estimate how the Kyoto Protocol impacts the company. Lopez-Alcala made some counter-intuitive discoveries.

Turns out that under Kyoto, Exxon is responsible for abating only 9 million out of the 138 million tons of its carbon footprint—about 6.9% of its absolute exposure. Mario arrived at this figure by compiling a weighted average of the emissions targets affecting all Exxon operations around the world. His estimate for what it costs Exxon to abate those emissions, assuming it had to purchase carbon credits? About $1 billion a year. (He calculated net present value for the 2008-2012 Kyoto compliance period and applied a standard oil industry discount rate to arrive at the figure, based on an expected price of $28 per ton of carbon. He also had to add in to the calculation, abatement costs for reducing emissions to a baseline year.)

$1 billion annually is not a terribly large liability for a $400 billion company.

Furthermore:

There’s also another aspect to Exxon’s carbon footprint: the 129 million tons of emissions that it is not required to reduce. It is an enormous carbon asset in a world in which carbon has a price, and it presents a tangible opportunity for enhancing profitability – even beyond $40.6 billion. By reducing those emissions – most simply through reduced flaring, co-generation, heat recuperation, and carbon capture and sequestration – Exxon could reap profits from selling carbon credits it generates. Mario reports that BP is the leader in the sector in taking advantage of these opportunities, which are tangible and positive already.

Sassoon concludes that from an investor (as well as moral) standpoint, ExxonMobil’s storied resistance to the science of climate change is a poor corporate position.

18 – 20 September 2007, The University of Chicago Gleacher Center, Chicago

Carbon finance experts estimate that the global carbon market is now worth over $27 billion. Financial giants along with Fortune 500 companies, utility & energy companies, fund managers and regulatory bodies are cashing in on the lucrative concept of carbon finance. Carbon Finance World 2007 has been developed to examine the emerging opportunities in this new global market. This conference will provide attendees with countless business development and networking opportunities, real investment prospects and an action plan for profitable growth.