Article in Times of India on 24th December 2009

UNCERTAIN TIMES

Carbon credit prices to remain volatile: Experts

Namrata Singh | TNN

Mumbai: Even as prices of carbon offsets dropped in a knee-jerk reaction to the outcome of Copenhagen Climate Summit, players in the Indian industry are projecting carbon credit prices to remain volatile in 2010.

The recently concluded Copenhagen Climate Summit has seen a lot of negative reactions from nations, experts, environmentalists, business leaders and investors.

"Clearly, the summit fell short of its stated goals and global expectations. There is likely to be a downward trend on carbon credit prices and slower demand in the short term (at least, until Q4 2010),'' said Krish Krishnan, Managing Director, Green Ventures India.

Suresh Iyer, deputy general manager, JSW Steel, said there would be knee-jerk reactions in the near future due to some of the speculators/traders unwinding their positions (which they would have taken in the run up to the Copenhagen meet).

The prices would continue to be influenced mostly by the same factors viz, oil prices, weather patterns, intensity of economic revival, etc.. "There would be a persistent volatality in the prices of carbon in 2010,'' said Iyer.

The benchmark EU allowance contract shed more than a euro in early trading on Monday morning, falling as low as 12.40 ($17.81) after opening at 13.50. Consequently, United Nationsbacked CERs (certified emission reductions) were traded at 11.50/11.20 (High/Low) for the December 2010 contract at the time of this reporting.

"The short term implication on prices is dampening. Investors could turn weary of taking long position on CERs, thereby bringing the prices under severe pressure in January,'' said Birjendra Sangwaiya, principal consultant, Emergent Ventures India. CERs too are expected to be vulnerable in the short term.

According to Krishnan, while there is continuing uncertainty about Kyoto post-2012, the lack of binding caps will keep more uncommitted investors on the sidelines.

However, on the positive front, Krishnan said the US Senate is likely to now move forward and ratify the Kerry-Boxer Bill, which will officially herald the entrance of the US into this market as a largest new source of market demand for both carbon offsets and low carbon technologies and services.

This is expected to open up a market about three times the size of the European Union-Emissions Trading Scheme. "This also means shifting the carbon market epicentrE from London to New York,'' said Krishnan.

Adaption funds led by the US ($100 billion annual target by 2020), according to Krishnan, will serve as an active global green stimulus programme.Carbon credits or CERs are offsets of international emission trading schemes implemented to mitigate global warming.

Cabinet Meeting at Mt. Everest - Sponsored by Green Ventures

Nepal's top politicians strapped on oxygen tanks Friday and held a Cabinet meeting amid the thin air of Mount Everest to highlight the danger global warming poses to glaciers.

AP/Marianne Bom 04/12/2009 19:10

Scientists say the Himalayan glaciers are melting at an alarming rate, creating lakes with walls that could burst and flood villages below.

On Friday, to highlight the danger that global warming poses to glaciers, Nepal's government held a Cabinet meeting at Mt. Everest - a stunt the government billed as the world's highest Cabinet meeting. The ministers posed for pictures, signed a commitment to tighten environmental regulations and expand the nation's protected areas, and then quickly flew away.

"The Everest declaration was a message to the world to minimize the negative impact of climate change on Mount Everest and other Himalayan mountains," Prime Minister Madhav Kumar Nepal later said.

The Prime Minister, his two deputy prime ministers and the 20 Cabinet ministers were examined by doctors before boarding helicopters to Kalapathar, a flat area at an altitude of 17,192 feet (5,250 meters) next to Everest base camp, the jumping point for climbers seeking to scale the peak.

The Cabinet spent only 20 minutes next to the mountain to prevent any of the ministers, unused to the heights of the Himalayas, from getting altitude sickness.

Several of the ministers were overweight, some were in their 70s and many came from the low-lying plains in the south. Four ministers declined to attend either because of health concerns or because they were traveling abroad.

Nepal's negotiation team at the climate conference in Copenhagen next week will push for wealthy countries to commit 1.5 percent of their earnings to help poorer nations protect the environment. (Photo: Scanpix/AFP)