Carbon portfolio management

The aim of the European Union's Emissions Trading Scheme (EU ETS) is that by 2020, emissions from sectors covered by the EU ETS will be 21% lower than in 2005. In addition to large CO 2 emitting companies covered by the scheme, other participants have entered the market with a view of using emission allowances for the diversification of their investment portfolios. The performance of this asset as a stand alone investment and its portfolio diversification implications will be investigated in this paper. Our results indicate that the market views Phases 1, 2, and 3 European Union allowance futures as unattractive as stand alone investments. In a portfolio context, in Phase 1, once the short-selling option is added, there are considerable portfolio benefits. However, our results indicate that these benefits only existed briefly during the pilot stage of the EU ETS. There is no evidence to suggest portfolio diversification benefits exist for Phase 2 or the early stages of Phase 3

Beyond the public and private divide: Remapping transnational climate governance in de 21th century

This article provides a first step towards a better theoretical and empirical knowledge of the emerging arena of transnational climate governance. The need for such a re-conceptualization emerges from the increasing relevance of non-state and transnational approaches towards climate change mitigation at a time when the intergovernmental negotiation process has to overcome substantial stalemate and the international arena becomes increasingly fragmented. Based on a brief discussion of the increasing trend towards transnationalization and functional segmentation of the global climate governance arena, we argue that a remapping of climate governance is necessary and needs to take into account different spheres of authority beyond the public and international. Hence, we provide a brief analysis of how the public/private divide has been conceptualized in Political Science and International Relations. Subsequently, we analyse the emerging transnational climate governance arena. Analytically, we distinguish between different manifestations of transnational climate governance on a continuum ranging from delegated and shared public-private authority to fully non-state and private responses to the climate problem. We suggest that our remapping exercise presented in this article can be a useful starting point for future research on the role and relevance of transnational approaches to the global climate crisis

Cashing in on climate change : political theory and global emissions trading

Global climate change raises profound questions for social and political theorists. The human impacts of climate change are sufficiently broad, and generally adverse, to threaten the rights and freedoms of existing and future members of all countries. These impacts will also exacerbate inequalities between rich and poor countries despite the limited role of the latter in their origins. Responding to these impacts will require the implementation of environmental and social policies that are both environmentally effective and consistent with the equality and liberty of populations to which they are applied. This article considers whether global emissions trading, namely, the creation of a global market for tradable allowances conferring the right to emit a certain amount of greenhouse gas over a specified time period, is normatively defensible from a liberal egalitarian perspective. After a brief review of the theory and practice of emissions trading, a number of normative objections to the international trade in emissions allowances are analysed. These objections appeal to one, or a combination, of two claims. First, emissions trading schemes are likely to produce undesirable outcomes, such as environmental neglect, in the further future. I call these ‘instrumental objections’. Second, emissions trading schemes violate non‐consequential norms of justice and fairness. I call these ‘intrinsic objections’. It is argued that, when combined, instrumental and intrinsic objections indicate that instituting a global network of emissions trading schemes, as envisioned by a number of parties to the Kyoto Protocol and Copenhagen Accord, would be illegitimate in absence of significant procedural and consequential safeguards

European Climate Policy: Toward Centralized Governance?

The EU emissions trading system (ETS) is the first large-scale international emissions trading system and a "cornerstone" in EU climate policy. A key element in the ETS implementation process is deciding upon the ceiling ("cap") for the emissions included in the ETS. Over time, a significant change and centralization of this model has taken place. In order to understand this development, we need to acknowledge the increasing acceptance of stronger centralized governance among the member states due to ETS pilot phase problems; take into consideration frustration in the European Commission over complex and differing National Allocation Plans; and add the fact that the Kyoto Protocol target was getting nearer and a good performance of the "flagship" ETS was becoming increasingly important. Hence, although the case supports the importance of acknowledging the multilevel character of the EU, it still emphasizes the key role of changes in member states' interests and positions for understanding outcomes. Copyright 2009 by The Policy Studies Organization.

Governing clean development: a framework for analysis

This article constructs a framework for understanding and explaining the governance of clean development (CD) in order to generate insights about who is governing it, by what means, for whom and how effectively. Such a framework usefully highlights governance gaps and blind spots, issues of policy coherence and co-ordination, and the distributional consequences of existing patterns of CD governance. It points to the need to construct forms of governance which are mutually reinforcing, which avoid duplication and which provide incentives to address the energy needs of the very poorest, whose interests may otherwise be overlooked