CA: Chicago Climate Exchange = FAIL, Now California opens “Pacific Carbon Exchange”

California hasn’t learned from the failure of the Chicago Climate Exchange this year, when a ton of Carbon traded for a mere 5 cents. Nobody wanted to buy it even at that ridiculously low price. But, like a zombie, carbon trading rises again in brain dead broken California.

Now the the AB32 madness begins, and PCarbX (which sounds like some over the counter antacid remedy) is the new trading scheme. I give it two years, max. Here’s the story from the San Francisco Chronicle.

Today could be seen as the biggest day yet for California’s climate change law, assuming, as expected, the state Air Resources Board signs off on the rules to implement it.

It will also be a big day for Aaron Singer, CEO of San Francisco startup Pacific Carbon Exchange, (at left) which is engaging in an enterprise thought dead in the water not so long ago: carbon trading.

“It’s the official starting gun for California and for Western regional carbon markets,” Singer said. “It means we get to make this business a growing reality.”

Central to the law, which goes into effect in 2012, is a “cap and trade” system designed to limit the amount of carbon from the state’s 500 largest emitters – mostly power plants, energy companies and heavy industry.

Companies emitting less than their state-mandated limit can trade their unused allowance – also known as carbon credits, or offsets – with companies that may be seeking to emit more than their mandated share.

“This is a significant milestone,” said Josh Margolis, CEO of Cantor CO2e, a San Francisco offshoot of New York’s Cantor Fitzgerald, referring to the board’s expected action. “In the trading world, it’s been a decadelong anticipation.”

With the Bay Area Council serving as the firm’s incubator, Singer has been working on its trading infrastructure for the past two years and is in the process of obtaining the certifications and accreditations from the U.S. Commodity and Futures Exchange Commission.

In the meantime, PCarbX, as it is known, plans to begin some futures and options trading next year, pending a full rollout when the bell officially rings in January 2012.

In September, it also signed a memorandum of understanding with the Shanghai Environment and Energy Exchange to explore the establishment of more carbon markets in the United States and China.

Other entrants: PCarbX is not alone. In addition to Cantor CO2e, others in the “environmental commodity” business who are reported to be coming to California include the global Intercontinental Exchange and the Green Exchange, both with U.S. headquarters in New York. “We expect healthy competition,” Singer said.

“As a San Francisco-based entity with ties to policymakers, they’re in a unique position,” said Adam Raphaely, director of environmental markets at Karbone, an environmental commodity brokerage and project finance company in New York. “We see a potential relationship there.”

Neither is California alone, even though Congress and the Obama administration gave up on a national cap-and-trade policy this year.

The Western Climate Initiative, a cap-and-trade program, which includes several Western states and Canadian provinces, is due to go into effect – also in 2012.

Still, for all the anticipation, carbon trading here is likely to start small, especially as the Air Resources Board is initially giving emission allowances away for free, rather than the $10 minimum per ton the agency had proposed in its rules. And companies don’t necessarily have to trade through exchanges.

“You won’t see a big bang, but, rather, a buildup in intensity,” said Margolis, who has estimated the market could be worth anywhere from $3 billion to $58 billion by 2020 – the target year for California’s emissions to be lowered.

“This is much more than simply a business opportunity,” Singer said. “We’re here to serve the aims of AB32 and help the next generation of clean tech investment for our state.”

CCX was designed and operated by graduates of Michael Milken’s Drexel Burnham Lambert (con central before it imploded due to fraud)

PcarbX appears to have broader participation

http://www.pcarbx.com/

The Pacific Carbon Exchange and Shanghai Environment and Energy Exchange Sign a Memorandum of Understanding to Develop U.S. China Carbon Market

Pacific Carbon Exchange (PCarbX) and Shanghai Environment and Energy Exchange(SEEE) engage in broad partnership to help develop carbon and greentech markets in China and the U.S.

SAN FRANCISCO, September 13, 2010 — Signaling the start of a new era of mandated reductions of green – house gas emissions, today Pacific Carbon Exchange (PCarbX) and Shanghai Environment and Energy Exchange (SEEE) announced the signing of a Memorandum of Understanding, demonstrating the commitment of both companies to further developing carbon markets and clean and green technology partnerships in the United States and China.

“ This exciting pan – Pacific partnership allows the goals of California ’ s landmark AB32 Global Warming Solutions Act and China – s carbon – intensity reductions and renewable energy generation plans to be more fully realized, ” said Aaron Singer, President and CEO of the Pacific Carbon Exchange. “ The US & China release a combined 15 billion tons of green-house gas emissions into earth&rsquos delicately balanced atmosphere every year. This is a staggering number and represents the single greatest challenge of the 21st Century. The Pacific Carbon Exchange and Shanghai Environment and Energy Exchange are working together to turn back the clock on global climate change in the US and China and to help foster growth of renewable energy and cleantech innovation in both our countries. ”

“ It is a great opportunity for the Pacific Carbon Exchange and Shanghai Environment and Energy Exchange corporate with each other in low carbon field and relevant information sharing. Under the circumstance of global climate change, I believe through sharing the sourcing of green-tech technology and IP assets and business relationships in both American and Chinese market, also together explore the new market mechanism in both markets, we will be able to create a lot of chances and discover potential opportunities for reciprocity and mutual beneficial. ” Said Dr.Lin Jian, CEO of Shanghai Environment and Energy Exchange.

Specifically, the two companies agreed that:

· PCarbX will share sourcing of green-tech technology and IP assets and business relationships in the US to create partnerships in China through SEEE.

· PCarbX and SEEE will lend one another expertise and intelligence to create carbon, renewable energy and energy efficiency markets in the US and in China.

The environmental commodities market is growing rapidly worldwide. This market development partnership between the Pacific Carbon Exchange and Shanghai Environment and Energy Exchange will look to grow carbon, renewable energy, and energy efficiency markets both in China, California and the United States. The partnership will also help foster green and clean technology partnerships between US and Chinese technology companies who are members of both exchanges.

The Pacific Carbon Exchange will create California and the western region – s first environmental commodities exchange to serve California and the Western Climate Initiative mandatory market for carbon emissions. The Pacific Carbon Exchange trading platform will allow businesses and other entities to trade several regulated environmental commodities on the exchange including: carbon offsets, carbon allowances, carbon futures, options, and other derivatives.

Shanghai Environment and Energy Exchange (SEEE) was inaugurated on 5th of August, 2008 and is the first international comprehensive environment and energy trading platform in China. Based in Shanghai, SEEE is a diverse and multi – functional equity – capital market that provides an entrance and exit route for many investors in the field of environment and energy. Through expanding the domestic and international cooperation, SEEE continues to create an energy – saving, environmental – friendly society for a greener China and a better world.

Aaron Singer is Co – Founder and CEO of the Pacific Carbon Exchange, a startup environmental commodities exchange headquartered in San Francisco, CA.

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