“…a handy primer for assessing the evolution of market–based solutions for environmental financial liabilities.” ( Financial Analysts Journal , (63(4):79)
From the Inside Flap
Energy & Emissions Markets: Collision or Convergence? As the world′s energy markets continue to expand in the light of rising global demand, environmental standards such as the Kyoto Accord are creating uncertainty and greater price volatility in energy markets. This comprehensive book discusses traditional energy–trading markets, the impact of emissions–trading schemes and the advent of renewable–energy trading. Written by renowned energy–market expert and commentator, Professor Tom James and best–selling author Peter C. Fusaro, this book demonstrates that the forces of energy and environmental issues are linked ore than ever before. The beginning of European emissions trading in 2005 and the implementation of the Kyoto Protocol have accelerated efforts already underway in the U.S. and elsewhere to use market forces to remediate environmental issues. In response to its Kyoto obligations, Europe decided on a trade–and–cap emissions–trading scheme. This allows governments to regulate the aggregate amount of emissions produced by setting an overall cap but gives companies the flexibility to determine how and where the reductions are achieved. On 1 January 2005, the European Union Emissions Trading Scheme (EU ETS) came into force and introduced a new dimension to energy trading. From now on, the cost of emissions from the use of a fuel would have to be taken into account as part of the whole net cost calculation. This new dynamic in energy pricing converged and in some cases collided with with energy markets. Drawing extensively on the first year of the EU ETS, this book, Energy & Emissions: Collision or Convergence? explores the developments of emissions regulation, emissions–trading schemes, and how they are interacting with energy markets across the globe.
From the Back Cover
Energy & Emissions Markets: Collision or Convergence? "This book is an invaluable resource for all people wishing to enhance their understanding of the new world paradigm, where traditional energy markets and new environmental markets are intrinsically linked. I congratulate the authors for their well–informed, insightful and valuable contribution to the debate... In years to come, I would expect every student of economics and environmental issues to have a copy of this book. It demonstrates how market based mechanisms can protect our environment and ensure economic prosperity which, ultimately, will help to safeguard the future for our children and generations to come." – Robert Casamento, Head of Climate Change Services, Deloitte & Touche LLP, Members of the Advisory Board, GLOBE Legislators & Business Leaders G8 + 5 Climate Change Dialogue, Special Advisor G8 CEO Roundtable on Climate Change "As more and more industries are changing because of their carbon footprint or other climate, emission or energy related issues, it is important to understand the core themes, regulatory framework and opportunities that form this new business paradigm. Energy & Emissions Markets: Collision or Convergence? Is a complete reference book and includes descriptions of relevant and diverse aspects of risk, which reach well beyond the energy and emissions trading markets." – Matthias Knab, Director, Opalesque Ltd. "This exceptionally readable reference is deeply informative about the history of the nascent global green house gas markets. Peter Fusaro and Tom James lay out the evolution and history of the US SO 2 and NOx markets – Underappreciated as models of the cap and trade markets emerging under the Kyoto Protocol. The author who coined the term "Green Trading: articulates the history and evolution of the increasing global sensitivity to greenhouse gases, and how that will be manifested by most efficiently in trading mechanisms. This book is a convenient way to become aware of the Key issues gathering in our communal future as well as providing a detailed understanding of methods used to manage it." – Mark Cox , CIO, New Energy Fund "Increasing awareness of the environment is both corporate and financial Concern along with the current energy "boom" and emergence of regional markets for a variety of emissions such as CO 2 , SOx and Nox. The complex interplay between energy and environment has become a significant issue for governments, corporations and the individual citizen. The authors have written the definitive book to explore these issues and explain this complexity for all. With the prospect of global carbon and perhaps other environmental markets rapidly becoming achievable in the short–term, This book offers both an educational and insightful perspective into how this will all play out." – Dr. Gary Vasey, Chief Operating Officer, Energy & Environment Capital Management LLC
About the Author
Professor Tom James has been involve din energy markets since 1989, acting as a consultant to many energy firms during this period. In early 2006, he w2as appointed Chair Professor of Natural Gas markets at the University of Petroleum & Energy Studies ( www.upesindia.org ), which specializes in energy sector–related graduate and postgraduate degree courses. before embarking on a career as a consultant to the energy & Commodity Derivatives in 2004, he as a director for the Commodity Derivatives Group of the Investment banking arm of the Bank of Tokyo Mitsubishi, Japan, and Director of Traded Energy Markets at the French bank Credit Agricole Indosuez (now known as Calyon). He is a member of the Energy Institute, the global Association of Risk Professionals (GARP), the Society of Technical Analysts, Cambridge, U.K., the institute of Directors and of the Council of Energy Advisors. He is also a participant in the International Task Force on Commodity Risk Management at the World Bank. His publications include Energy Price Risk (Palgrave Macmillan, 2003), which has been published in English, Chinese and Russian, and Energy Hedging in Asia (Palgrave Macmillan, 2005). He was a contributor to Agribusiness & commodity Risk Strategies and Management (Risk Books, 2003). Peter C. Fusaro, a graduate of Carnegie–Mellon and Tufts Universities, is the best–selling author of What Went Wrong at Enron and 11 other books. He is an energy–industry thought leader noted for his keen insights on emerging energy and environmental trading issues. He is co–principal of the New York–based Energy Hedge Fund center LLC, an online research and consultancy focused on energy and environmental hedge funds ( www.energyhedgefunds.com ). Peer coined the term "Green Trading" and holds the wall Street Green Trading Summit in New York each spring. He has been actively engaged in market–based solutions to global warming, clean technology, renewable energy and emissions trading since 1990. His most recent research has focused on water hedge funds.