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A Publication of the Emissions Marketing Association
Serving the International Emissions Trading Community

VOLUME 4, ISSUE 1, JANUARY 2000

Buying and Selling Greenhouse Gas Emission Reductions: A Figment of Contract

By Mark Perlis

EMA members know what they are trading when buying or selling SO2 or NOx emission allowances. The allowances are created under federal or state law, entitling holders to enforceable rights to emit specified amounts of the relevant pollutant. Allowance holdings are registered at EPA, permitting legal title to identifiable allowances to be transferred by traders.

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Four Factors Suggest a Big Change in the SO2 Allowance Market

By David Wojick, PhD

Emissions trading may be in for a big jolt in the next few years. At least four significant factors are converging on the market for SO2 allowances, maybe more. Together they have the potential to transform the market into something very different from what we have today.

Today's SO2 market is successful, but modest. According to EPA data, in the last five years around 30 million tons have changed hands, with over 6,000 trades and about 65% of the action involving brokers. Prices have shown interesting volatility, enough to interest traders. So the market is real and credible, if not a screamer. But big changes are on the horizon.

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Also in this issue:

ASSESSING THE EMISSIONS
TRADING MARKETS
PROGRAM HIGHLIGHTS

Prospects for SO2Trading in Phase II

What to Expect as We Prepare for COP-6

Recent Activity in the Greenhouse Gas Emissions Trading Markets

Prospects for the NOx Market in the Year 2000 and Beyond

How Well are the Alternative and Local Markets Functioning?

How Mature is the SO2 Derivatives Market?

Traditional Brokerage vs. Electrical Exchange --
What does the Future Look Like?