Per your request, I have compiled the following memo that provides information on the potential international greenhouse gas emissions trading market.  It also discusses factors that impact current prices for greenhouse gas emissions transactions and identifies future market influences.  

Given current regulatory uncertainty and the patchwork of greenhouse gas emissions initiatives, a liquid market with a clearly defined commodity is likely several years (or more) away.  However, given the growing interest in compliance hedging, opportunities to package and sell verifiable greenhouse gas emissions reductions could increase in the near future.  Further, with the launch of the U.K. emissions trading program and rule development for the EU trading program expected next year, it is likely that the definition of a verifiable greenhouse gas emission credit will become more clear.

Given the range and varying circumstances under which current greenhouse gas emissions transactions are occurring, Enron business groups should begin to capture (define ownership and package) internal greenhouse gas reductions, look for opportunities to integrate greenhouse gas emissions concerns into existing risk management products and, Enron assets that are significant greenhouse gas emissions sources, should assess and manage exposures.  

Environmental Strategies Group will convene a commercially oriented greenhouse gas strategy discussion on Tuesday morning, November 20 (EB 8C1) to explore these opportunities across business groups.  I hope you and others from your group will be able to participate.  There will be video conference and teleconference capabilities available.

 
Please contact me with questions, comments, or suggestions for further analysis.



Lisa Jacobson
Enron
Manager, Environmental Strategies
1775 Eye Street, NW
Suite 800
Washington, DC 20006

Phone: +(202) 466-9176
Fax: +(202) 331-4717