Transcript Slide 1

Aldo Settimio Boni de Nobili
Foreign legal counselor
LEHMAN, LEE & XU
[email protected]
THE STATE OF THE CARBON MARKET IN THE
WORLD AND THE ROLE OF LAW FIRMS
CHINA CARBON INSIGHTS 2008
Beijing, 2-3 December
LEHMAN, LEE & XU
www.lehmanlaw.com
10-2 Liangmaqiao Diplomatic Compound
No. 22 Dongfang East Road
Chaoyang District Beijing
Tel: (0086) (10) 8532 – 1919
Fax: (0086) (10) 8532 – 1999
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
Abstract
The carbon market
“CARBON MARKET” AND “CARBON MARKETS”
VOLUME OF THE MARKET
DEMAND AND SUPPLY
CDM market
CURRENT STATUS
MAIN BUYERS AND SELLERS
PROJECTS
CERs PRICING
The role of law firms
MAIN ACTIVITIES
LEHMAN, LEE & XU
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
“Carbon market” and “Carbon markets”
IS THERE A GLOBAL CARBON MARKET?
The global carbon market is an abstraction, resulting from the sum of the various carbon markets.
Allowance-based
markets
Project-based markets
EU/ETS, NEW ZEALAND ETS, JAPAN KEIDANREN VOLUNTARY
ACTION PLAN, SWITZERLAND ETS
CDM, JI
Kyoto compliance
Market
segments
US markets
Australia
Voluntary markets
REGIONAL GREENHOUSE GAS INITIATIVE, CALIFORNIA GLOBAL
WARMING SOLUCTION ACT (AB 32), LIEBERMAN-WARNER
BILL
NSW GREENHOUSE GAS ABATEMENT SCHEME
CCX, OVER-THE-COUNTER
Independents
Multiple regimes coexist with different degrees of interconnection. Efforts are put in place to improve
linkage but different political views and insufficient policies development slow down the process.
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
“Carbon market” and “Carbon markets”
FRAGMENTATION OF THE MARKET
The various carbon markets have generated a
proliferation of different carbon units with limited linking.
KYOTO
EU-ETS
KVAP
NZ-ETS
ISOLATION OF THE MARKETS
NSW
RGGI
CCX
VOLUNTARY
AAU
CDM represents the main interconnection
CER
ERU
RMU
Governments
with Kyoto
EUA
committments
European
companies
under EU-ETS
Japanese
companies
under KVAP
New Zealand
companies
under NZ-ETS
Buyers from
the voluntary
market
NZU
NGAC
CFI
VER
= no restriction
= with quantitative/qualitative restrictions
www.lehmanlaw.com
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
“Carbon market” and “Carbon markets”
IS A GLOBAL CARBON MARKET POSSIBLE?
Benefits
•Improved connectivity between demand and regional/sectoral mitigation potential
•Increased flexibility
•Possibility of achieving more drastic GHG emissions limit targets
Instruments
•Linking different national emissions management approaches: establishment of a single carbon
cost and creation of equitable access to the prevailing lowest cost abatement opportunities
•Unique set of rules: international registry
•Multilateral recognition of the various market systems and carbon units
•Revising and broadening the project-based mechanism
•Establishment of an oversight body
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
Volume of the market
2007 main allowances markets
Markets
Volume
Value
EU-ETS
2.061 MtCO2e
US$50,097 Million
25 MtCO2e
US$224 Million
NSW
CCX
TOTAL
YEAR 2007
23 MtCO2e
US$124 Million
2,109 MtCO2e
US$50,394 Million
Double than 2006 and six times compared to 2005
TOTAL VOLUME
2007 project-based markets
Volume
2,983 MtCO2e
Markets
TOTAL VALUE
US$64,035 Million
Value
Primary CDM
551 MtCO2e
Secondary CDM
240 MtCO2e
US$5,451 Million
+105%
JI
41 MtCO2e
US$499 Million
Voluntary market
TOTAL
42 MtCO2e
874 MtCO2e
US$265 Million
US$13,641 Million
+70%
www.lehmanlaw.com
US$7,426 Million
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
Volume of the market
Performance during the first 3Q of 2008
TOTAL VALUE
+81% = US$87 Billion
PRIMARY CDM
-7% value |
SECONDARY CDM
-26% volume
+150% value | +100% volume
Forecasts by the end of 2008
TOTAL VOLUME
+30% = 3,900 MtCO2e
TOTAL VALUE
+ 80% = US$116 Billion
Further forecasts (Total value)
By 2012
By 2020
Without US ETS US$550 Billion
US$2 Trillion
With US ETS
US$3 Trillion
US$680 Billion
www.lehmanlaw.com
Source:
Source:
New
New
Carbon
Carbon
Finance
Finance
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
Demand and supply
2007 TRANSACTED VOLUMES
Others
1,5%
CCX
0,8%
NSW
0,9%
2007 CDM/JI BUYERS
Others
2%
JI
1,4%
Secondary
CDM
First8%3Q
Italy
4%
Europe = 90%
2008:
sCER = 12%
pCER
Austria Spain
2%
4%
Other Europe
6%
Private companies = 79%
Primary
CDM
=18,5%
14,5%
Japan 11%
UK carbon hub of the world
London=
EU-ETS
69%
www.lehmanlaw.com
59%
Europe Baltic
Sea
12%%
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
Demand and supply
FORECASTS ON GLOBAL DEMAND BY 2012 (compliance)
PRIVATE SECTOR
GOVERNMENTS
EU-ETS
1,400 MtCO2e
EU-15
Governments
540 MtCO2e
27%
JAPAN
350 MtCO2e
JAPAN
660 MtCO2e
100 MtCO2e
NORWAY ETS
15 MtCO2e
NEW ZEALAND ETS
10 MtCO2e
CANADA
AUSTRALIA
REMAINING ANNEX B
•Australia:
domestic
TOTAL = 2,460
MtCO2e
25 MtCO2e
1,800 MtCO2e
N/A
20 MtCO2e
660 MtCO2e
•Liecthenstein and Monaco: less than 0.5MtCO2e over the whole
Kyoto
•Iceland: no shortfall
•New Zealand: unclear (national ETS; AAUs allowed)
Private sector
73%
www.lehmanlaw.com
1,800 MtCO2e
•Norway: around 10MtCO2e (but additional demand from
installations under ETS)
•Switzerland: 12-15 MtCO2e half domestic and half Kyoto
mechanisms
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The carbon market
Demand and supply
FORECASTS ON GLOBAL SUPPLIES BY 2012 (compliance)
JI
2,6%
RUSSIAN FED.240
(36%)
MtCO2e
CDM
CHINA (70%)
CDM
17,5%
1,120 MtCO2e
1,600 MtCO2e
INDIA (15%)
JI
86,5 MtCO2e
660 MtCO2e
+ JI
UKRAINE (33%)
CDM
20,1%
240 MtCO2e
79 MtCO2e
REST OF ASIA (5%)
80 MtCO2e
2 biggest players
TOTAL = 9,145 MtCO2e
AAUs
RUSSIAN FED. (46%)
3,330 MtCO2e
UKRAINE (30%)
2,170 MtCO2e
EU-10 (24%)
1,805 MtCO2e
REST OF THE WORLD (10%)
160 MtCO2e
7,305 MtCO2e
AAUs
79,9%
www.lehmanlaw.com
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
Abstract
The carbon market
“CARBON MARKET” AND “CARBON MARKETS”
VOLUME OF THE MARKET
DEMAND AND SUPPLY
CDM market
CURRENT STATUS
MAIN BUYERS AND SELLERS
PROJECTS
CERs PRICING
The role of law firms
MAIN ACTIVITIES
LEHMAN, LEE & XU
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Current status
IN THE WORLD
Number of
projects
Registered at
the EB
Requesting
registration
at the EB
Other (under
design,
validation,
etc.)
CERs issued
www.lehmanlaw.com
1,243
135
IN CHINA
CERs
233,479,091 Registered at
per annum the EB
19,174,849 Requesting
per annum registration
at the EB
Number of
projects
CERs
317
124,452,943
per annum
1,283
N/A
2,822
N/A Other under
design,
validation,
etc.)
1,707
N/A
N/A
195,000,000 CERs issued
78
90,645,108
Source: World Bank; www.cdmcchina.gov.cn
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Main buyers and sellers
SELLERS (countries)
Central Asia
1%
Africa
5%
BUYERS (countries)
Rest of Latin
America
5%
Others
2%
Austria Spain
2%
4%
Italy
4%
Brazil
6%
Other Europe
6%
Rest of Asia
4%
India
6%
China
73%
www.lehmanlaw.com
Japan 11%
UK
59%
Europe Baltic
Sea
12%%
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Main buyers and sellers
TOP 20 BUYERS (2007)
TOP 20 PDD CONSULTANTS (2007)
Eco Securities
Carbon Asset Management Sweden
AgCert
EDF Trading
IBRD
RWE
Cargill International
Mitsubishi
Trading Emissions
ENEL
Agrinergy
CAMCO
MGM
Marubeni
Vitol
Carbon Resource Management
Kommunalkredit
Essent Energy Trading
Climate Change Capital
Energy Systems International
Eco Securities
AgCert
Beijing Tianqing Power International
PricewaterhouseCoopers
Econinvest
Tsinghua University
Zenith Energy Services
CAMCO
Mitsubishi UF J Securities
WB-CF
Agrinergy
Senergy Global
Ecoenergy
MGM
CWEME
Easy Carbon
Hunan CDM Project Service Center
Millennium Capital Services
Asia Carbon
AGET
www.lehmanlaw.com
Source: UNEP Risø
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Projects
GLOBAL (volume supplied)
Afforestation/
reforestation
and others
2%
Hydro
7,5%
CHINA (volume supplied)
Wind
7%
Afforestation/
reforestation
and others
0,6%
Hydro
7,5%
Wind
7,2% Biomass
1,3%
HFC
8%
N2O
9%
Biomass
5%
Waste heat
4%
Fuel switching
40%
www.lehmanlaw.com
Methane
recovery
13%
Waste heat
6,9%
HFC
48
Methane
recovery
7,2%
N2O
15%
Fuel switching /
energy efficiency
6,3%
Source: World Bank
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Projects
GLOBAL (pipeline per sector)
N2O, HFC, PFC
2%
Others
0,2%
Fuel switch
3%
Afforestation /
reforestation
0,8%
Methane
recovery
16%
Energy efficiency
15%
CHINA (pipeline per sector)
Biogas
1,6%
Biomass
3,9%
Wind
18%
Renewables
63%
Hydro
49%
Methane
recovery
7%
Energy efficiency
16%
Fuel switch
2%
www.lehmanlaw.com
N2O
1,9%
HFC
0,6%
Source: UNEP Risø
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
Projects
Projects in Asia by country
Sri Lanka Thailand South Korea
Philippines
2%
2%
Indonesia
1%
2%
Vietnam
3%
1% Others
Malaysia
1%
35%
CERs in Asia by country until 2012
Vietnam
1%
Thailand
1%
Others
2%
South Korea
4% Indonesia
2% Philippines
1%
Malaysia
3%
India
19%
China
48%
India
35%
China
67%
www.lehmanlaw.com
Source: UNEP Risø
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The CDM market
CERs pricing
sCERs prices felt from the July record of €24 to the current €14,65
Source: Point Carbon
The spread between pCERs and sCERs is close to zero
China’s countermeasure:
lowered floor prices
wind = from €12,5 to €12
hydro = from €8,50 to €8
Is this
enough?
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
Abstract
The carbon market
“CARBON MARKET” AND “CARBON MARKETS”
VOLUME OF THE MARKET
DEMAND AND SUPPLY
CDM market
CURRENT STATUS
MAIN BUYERS AND SELLERS
PROJECTS
CERs PRICING
The role of law firms
MAIN ACTIVITIES
LEHMAN, LEE & XU
www.lehmanlaw.com
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The role of law firms
Main activities
•Establishment investment vehicle (project
entity JV/Wholly Chinese Owned Enterprise)
•Due diligence and research partners/projects
•Tax planning
Corporate and
tax
Outside
Inside the
the
project
project
Commercial
PIN, PDD
•Licenses and permits
•Environmental Impact Assessment
Environmental
compliance
•Secure and enforce patents, trademarks,
designs
•Licensing agreements
•Liaising with authorities
•Assistance on procedures for
validation and registration
www.lehmanlaw.com
•Agreements (ERPA, DOEs,
•Supply, Financing, Leasing,
etc.)
•Negotiations
Intellectual
property
Procedures
Advice to
policies and
regulations
Promotion
and
information
•Conferences and
seminars
•Publications
CHINA CARBON INSIGHTS 2008
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
The role of law firms
Lehman, Lee & Xu
THE STRUCTURE
Strong network of contacts from law firms and investors from Annex B countries
27 affiliated offices China-wide + branches in Hong Kong, Mongolia, Macau, Mauritius
650+ attorneys, patent and trademark attorneys, legal counselors, paralegals, administrative staff
ENGLAND
CANADA
FRANCE
GERMANY
HUNGARY
ITALY
NORWAY
SWEDEN
www.lehmanlaw.com
AUSTRALIA
THE STATE OF THE CARBON MARKET IN THE WORLD AND THE ROLE OF LAW FIRMS
Aldo
Settimio
Boni
Nobili
Aldo
Boni
dede
Nobili
• Settimio
Aldo
Settimio
Boni
Foreign
legal
counselor
Foreign
legal
counselor
• Foreign
legal
de
Nobili
LEHMAN,
LEE
&
XU LEE & XU
LEHMAN,
LEE
&
XU
• LEHMAN,
counselor
[email protected]
• abonidenobili@leh
manlaw.com
THANK YOU FOR YOUR ATTENTION!
CHINA CARBON INSIGHTS 2008
Beijing, 2-3 December
LEHMAN, LEE & XU
www.lehmanlaw.com
10-2 Liangmaqiao Diplomatic Compound
No. 22 Dongfang East Road
Chaoyang District Beijing
Tel: (0086) (10) 8532 – 1919
Fax:
Fax:(0086)
(0086) (10)
(10) 8532
8532 –- 1999