Revetec's Carbon Credit Trading

1. Trading Explanation

Industrialised countries are struggling to meet the set targets because the cost of reducing Carbon Dioxide (CO2) is in the order of $500 for every tonne of reduction of CO2, in contrast to $25 per tonne for developing countries.

The developing countries emission levels are substantially below the target fixed by the Protocol.
Consequently, the developing countries are permitted to sell their surplus credits to the industrialised countries.

Furthermore, companies in the industrialised countries who are unable to meet their targets can buy credits from companies that have surplus credits from developing countries.

Whilst the Kyoto Carbon Credit System will commence in 2008, emission-trading exchanges are already formed and have commenced trading.

Sindicatum Carbon Capital a leading developer of CDM and JI projects has stated (www.sindicatum.com) that “the generation, sale and trading of Carbon Credits is a new global commodities market with more than €145 billon today”.

2. Carbon Credit Trading Exchanges

Currently there are two major trading exchanges that trade carbon credits, the Chicago Climate Exchange (CCX) (www.chicagoclimateexchange.com) and the European Emissions Trading Scheme. Whilst Australia is not a signatory of the Kyoto Protocol, big business in Australia is increasingly participating in the trading schemes.

The New South Wales State Government in Australia has since 2003 established a voluntary trading scheme.

The carbon price is calculated at one (1) credit for one (1) metric ton of carbon dioxide emission reduced.

In recent years trading CCX Agricultural Methane Emission offsets have ranged from US$1 to US$3.25 per metric ton.