In the last few weeks there have been a few Carbon market 'firsts' announced.
The first UN Credits traded on NYMEX (RNK and Vitol), the first ECX UN Credit trade (TFS and Eneco), the first RGGI Auction 'announced' (New England states), and even the first CER deliveries to the Swiss Registry (by a bunch of arrogant Dutch fools).
What is more interesting about these events, aside from the PR value, is the filling in of the gaps in the curve.
Since the EUA has been issued, it has maintained it predominance in terms of liquidity and, dare-I-say-it, reputation. However, in my opinion we will soon we will see it being replaced as the benchmark as more CERs come to the market. The positon in the market of the other credits, as they become more liquid, will be similar to that of junk bonds.
Thats right, the CER will be the 30 year bond of the Carbon world and all others will gague their value against them.
o The ERUs, the retarded sister of the CER, will perhaps trade closer to CERS.
o The VERs and VCUs will be 'credits in waiting' like the "always the bridesmaid, never the bride".
o The RGGI credits will be the exclusive toy of the posh New England players and market churners of White Plains, NY (like that Sulfur thing).
o The California Credits will be owned by Stephen Speilberg and Tom Hanks.
About the only real value of an international and basis-risk play market is the amount of specialists employed due to the complicated nature of the various markets. With credits popping up all over the place, there will be plenty of jobs for those soon-to-be unemployed equity traders.
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