Mr. Peter Clarke

GLG News^SM Analyses by Peter Clarke(?)

Climate Change is a Global Problem that needs a Global Solution

March 30, 2007

Analysis of:Earth’s Climate Needs the Help of Incentives | www.nytimes.com

If the U.S. taxpayer knew the bill he or she would face if the politicians in Washington get their math wrong on climate change legislation the results of the New York Times poll might well have been different.

- If the U.S. had ratified Kyoto the cost would have been on or about $34 billion

- On the other side of the coin, properly crafted federal climate change policy would not only address the financial risks inherent in climate change but allow U.S. companies to better compete in what will be a global $1 trillion annual market for alternative energy by 2020

- The key to US policy success is to ensure not only well crafted domestic legislation but the participation of China and India as part of any new global, greenhouse gas emission reductions treaty. Anyone who has been to Beijing, Shanghai, Hong Kong or Bangalore, would know you can only see the sun on certain days of the week.

Volume and Liquidity Improving in the Carbon Markets

March 30, 2007

Analysis of:Carbon market to grow 50% in 2007 | www.wbcsd.org

The PointCarbon estimates provide data on the size of the emission markets. Some of these data are approximately correct, whilst others are overstated.

The European Union has become the global center for emissions trading with London as its capital.

- Four exchanges with clearing facilities now operate in the E.U. These are the ICE-ECX joint venture (London), Nordpool (Scandinavia), Powernext (France) and EEX (Germany)

- The emissions market in Europe is still majority over-the-counter, although the exchanges are fast increasing their market share

- New products such as call and put options on European Emission Credits are still relatively illiquid but open interest is on the uptick

- The volume of emission credits traded was 6 million on March 27, 2007 with February 2007 seeing the first month of 3 million credits traded on the largest exchange (EEX)

- Monthly volumes will increase through the end of 2007 to on or about 150 million credits, or some 2 billion EUAs annually; a figure somewhat less than the 2.4 billion estimated by PointCarbon.

- Canada, Japan and the United States are all studying the E.U. model with a view to offering competing products. None of these countries have a domestic cap and trade system or emissions trading regime in place.

- The CER market, based on actual deliveries versus projected CER deliveries, is much less than forecasted by PointCarbon and the value of these CER credits is questionable until such time as the EU, Japanese and Canadian regulations are finalized for 2008-12.

Carbon Trading - Show me the Gree$$n

March 20, 2007

Analysis of:Cantor Fitzgerald eyes U.S. carbon trading market | money.cnn.com

Winston Churchill once said "A lie is halfway around the world before the truth has a chance to get its boots on." While this quote is too harsh to apply to the international emission markets, the following needs to take place at a minimum before a meaningful, liquid market evolves in emission credits:

- The extension of the Kyoto Protocol in 2013 for at least 10 years to include emission caps for the United States, China and India

- Meaningful reductions in greenhouse gases converted into one, fungible instrument known as the 'right to pollute one tonne of CO2'

- A tightening of emission caps in Europe to restore market confidence

- A U.S. Congress and Administration which has federal climate change policy in its platform; this will not happen under the Bush Administration even with the Democrats in control of Congress

- An internationally recognized body to certify emission reductions with the appropriate audit trails.

The European experience is a good case study in the teething pain of nascent, environmental markets.