Climate Bills and a Green Economy

Carbon Trade Mustn't Be Victim of Bank Reform: HSBC

January 29, 2010

Reuters - Emissions trading should not be in the firing line of new banking regulations, said Stephen Green, group chairman of HSBC on Friday.

U.S. President Barack Obama last week proposed reforms, including regulation of proprietary trading where banks trade their own money and private equity investing by retail banks off their balance sheet in unlisted companies.

"There's a whole range of trading activities that are perfectly normal, legitimate, regular activities of the markets in support of economic and social development, and emissions trading is one of them," said Green, on the sidelines of a business and policy summit in the Davos Swiss ski resort.

"I don't think that will be characterized as proprietary trading, emissions trading is ... trading with clients. There is a debate to be had about proprietary trading (in other areas)."

HSBC on Monday invested $125 million off its own balance sheet in a private equity deal to support Better Place, a company which aims to roll out charging infrastructure for electric cars.

"It's exactly the kind of investment you want to see happen (to drive carbon emissions cuts) ... if we're allowed to continue to do that kind of thing," said Green, referring to prospective banking reforms.

"That's an investment we have made. Let's suppose commercial banks ended up not making investments in private equity, well, (low carbon businesses will) find other people making investments in private equity," he said.

Green was speaking on the sidelines of an event where six financial institutions underscored opportunities from investing in clean technologies, under a framework of "climate principles" launched in December 2008 to encourage such investment.

Banks say they are investing in clean tech despite a U.N.-led Copenhagen climate summit last month which failed to agree to replace the present Kyoto Protocol with a new, binding deal.

"We can't sit back and wait for that all-embracing accord that may one day emerge from the international governmental deliberations, we have to get going," said Green.

Climate Exchange Plc Trading Update for 2009: Continued Growth In Futures Volume

January 15, 2010

mondovision - Climate Exchange plc, the leading international environmental exchange operator, is pleased to provide an update on trading for the period 1 July 2009 to 31 December 2009 (H2 2009) together with year end figures.

Highlights for the period under review (H2 2009 compared to H2 2008):

• ECX traded 2,436,072 contracts in H2 2009, an increase of 40% over H2 2008
• ECX average daily volumes for H2 2009 were 18,603 contracts vs.13,311 contracts in H2 of 2008
• ECX open interest in H2 2009 increased to 547,417 contracts, up 54% over H2 2008
• CCFE traded 753,555 contracts in H2 2009; an increase of 292% over H2 2008
• CCFE average daily volumes for H2 2009 were 5,898 contracts vs. 1,514 in H2 2008, an increase of 290%
• CCFE open interest in H2 2009 increased to 100,488 contracts up 64% over H2 2008

CCX trading volumes declined by 31% in H2 2009 compared to H2 2008. The drop in trading of the voluntary carbon contracts was offset by the 808% increase in trading in the carbon complex contracts on CCFE ...

Richard Sandor, Executive Chairman of Climate Exchange plc, said:

“In the U.S., although the timing remains uncertain, work continues on bipartisan climate legislation. Regional efforts such as RGGI and the Western Climate Initiative are growing and attracting interest from market participants, and the EPA is providing additional clarity on its authorities and evaluating next steps. Each of these outcomes should provide us with growing business opportunities, and Climate Exchange is well positioned to take advantage of their tremendous potential however the U.S. legislature determines to address the issue of climate change.”

Neil Eckert, CEO of Climate Exchange plc, said:

“In 2009 we endured a perfect storm made up of the coincidence of several events including: the global credit crunch, resulting in reduced volumes in many markets, the closure of many bank proprietary trading desks and significant redemptions for hedge funds and other speculative pools of capital; great political uncertainty leading up to Copenhagen where, as expected, there was no legally binding commitment to a global emissions reduction programme and, lastly, a pushing back of the timetable for a Senate vote on the proposed federal programme in the U.S. In spite of this, we continue to demonstrate outstanding growth in volumes and open interest in our mandatory market products and have maintained our dominant market shares of exchange traded volumes.”