Seize the business opportunities in the budding US carbon market

Milo Sjardin, Head, North America, New Carbon Finance

 

What do you and your organization do in the Carbon Markets sector?

New Carbon Finance provides detailed and highly quantitative research and analysis of the world’s carbon markets, both those in existence and in the planning stage. Services range from data provision and analysis reports to price forecasting models and customized consultancy.

What do you consider to be the most interesting developments and biggest challenges in the North American carbon market at this time?

The continuation of momentum in establishing a federal cap-and-trade programme in the midst of an election year and other issues such as high commodity prices and economic slowdown.

If regulated emission reductions become mandatory in the US, who stands to be most affected by this, and what would you recommend to anyone worried about impending legislation?

In terms of companies these will be primarily power generators, utilities, and large industrials. Key things that those types of companies can already do is i) get familiar with the issues surrounding cap-and-trade, ii) understand the impact of a carbon price on their company, iii) assess possible risk strategies  such as internal abatement options or offset project development.

How do you see the North American Carbon Market looking in 5 years’ time?

In 5 years’ the market will be actively preparing for a federal cap-and-trade programme to start in 2013-2015:  developing a large variety of offset projects in any possible sector, putting in place internal abatement measures by covered entities, ramping up trading and investment departments in any company involved in the markets, trading futures of the impending market, etc.

What do you see as key to building a truly global carbon market?

Increased harmonisation between the design aspects of the different programs, ie coordination needs to happen now to ensure that the programs will be compatible with one another. Also, similar levels of carbon prices in the programs will be essential to prevent the one-way flux of credits. This will only be determined in time as experience is gained with the new trading programs.