Carbon Trading, Risk & Strategy Training Course
Course Highlights and Agenda
This course will highlight different roles companies can play and what kind of strategies can be applied to the carbon trading market. This will apply to companies with carbon constraints as well as those companies that can generate project-based credits.
This exciting course will explore this new financial market, consisting of derivatives, futures, hedging, netting, swaps, etc. Moreover, you will see how this growing market is affected by the developments in oil and other commodity markets. Because it is a government-initiated market, carbon trading is largely under the influence of political developments and it is crucial that these are also understood.
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Agenda
Day 1
Background and Framework of Emissions Trading
- The climate issue and the climate problem
- Introduction on The Kyoto Protocol, Kyoto Market and the EU Emissions Trading System
- Future developments Second ETS Allocation Plan (2008–2012)
- International agreements (‘Post 2012’ discussions)
- Most important legal aspects of the Kyoto Protocol and the EU Emissions Trading System (ETS)
- Allocation of CO2 allowances
- Covered sectors, companies
- Internal market
- Cross border aspects
Background and Framework of Credits Trading
- Project based, tradable credits
- Generated through the Kyoto Mechanisms
- Joint implementation (Emissions Reduction Units, ERUs)
- Clean Development Mechanism (Certified Emission Reductions (CERs) in developing countries)
- The procedures, requirements,monitoring, verification
- The linkage with the ETS
Trading and Transfer
- Legal framework: object of trading and master or standard agreements (IETA, EFET, ISDA)
- Types of trade (OTC, exchange market)
- Products
- Spot
- Futures
- Other derivatives
- Clean Dark Spread
- Clean Spark Spread - Linkage between ET systems
- Emissions Registries and Transaction Logs
Carbon Market Specialties
- The role of Carbon Capture and Storage (CCS) on the carbon market (injecting CO2 in depleted gas or oil fields or coal bed)
- Forestry and avoided tropical deforestation as offset under Kyoto Protocol
Day 2
The Carbon Market in Practice
- Participants and roles:Overview of different roles and actors on the carbon market
- How did emissions trading work in 2007; outlook into the future? Prices,Volumes
- Potential Roles for Companies on the Carbon Market
- Emissions Trading Strategies (on-site, off-site, multisite; carbon risk strategies, spot sales and futures purchase; pooling)
Develop Carbon Strategy
- How to prepare your organisation
- Internal reductions
- Buy and sell allowances
- Make JI/CDM investments - Abatement curves
- Decide what reduction opportunities exist within your company
- What are abatement curves
- How to construct abatement curves
- Including lead times in abatement curves - Analysis
- Compare internal reduction costs to current allowance market price
- Generate scenarios to analyse impact of futures emission price development
- Incorporating energy price effects into future business scenarios
Investment,Trading and Risk Management Strategy
- Investing in internal reductions or external trading
- How to develop an investment strategy based on scenario analysis
- Tradable instruments and contract structures
- Type of risks
- Risk mitigation
- How to develop an emissions risk management strategy
What You Will Learn
The course offers a perfect balance between theory and practice, with ample opportunity for in-dept case studies and all your personal questions to be answered.
During this intensive two-day course you will learn:
- The carbon market fundamentals
- How they influence emissions trading options
- The optimal emissions trading strategy
- How carbon impacts a company's asset value and credit rating
- How an emissions strategy optimises the rating
- How project-based credits can be generated
